Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
There's actually a fairly good short term trade becoming available here.
Given trading updates only tend to mention revenue, the next one should be really good. Even better than results which will contain all the extra costs of the extra staff employed.
This update will have the 10m magna payment, plus 3.5m of orders they were unable to ship in 2022, due to supply issues.
That's almost as good as last year on it's own.
I can see the update saying revenue over 100% increase.
That should move the price, even if only in the short term.
S2020,
When I say flattered, I'm coming from the perspective of how it affects the various results, given it's a one off payment.
I'm not saying it isn't a great piece of business.
As a result these results will get a boast that future and previous ones will be missing. So will look especially good ie flattered.
I agree with your view on how Cenkos think it's being paid, but think they have got it wrong, along with a number of other things in their forecasts.
The RNS is quite clear. It states -
Magna will make an upfront payment of 10million, with an additional payment of 7.5 million payable over the following 2years.
Have another read.
Just to give some context to results and the Magna payment.
Last H1 was about 15m revenue.
This year if it is 20m + the Magna 10m it's 30m, eg 100% increase.
Won't be hard to sell that.
Its the next set of results that will be harder, which will need auto to be doing some heavy lifting by then.
Terry,
You said "As GM said yesterday about the Lyric, more delivered in Jan than all off 2022. Shows it only just getting going now for many."
I'm afraid that quote is about one of the most misleading sales quotes I've ever heard.
I agree it came from GM, but when one understands that in 2022, they only produced 113 Lyrics, it means that they only needed to produce 114 in Jan for it to be true.
That isn't going to solve our revenue needs any time soon at $11 a pop.
Gives a very false impression of auto volume, when I'm actually trying to fully understand exactly what the likely upcoming KPI might be.
They have done it to achieve a guaranteed domestic lithium supply chain.
I doubt there will be anything like a 20% discount.
GM will do very well financially from the deal, as well as guarantee supply. They don't need a discount.
There will be a few car companies wishing they had this deal.
Nathan,
Yes well that will be general sentiment, due to the fact they needed to raise. In seye's case that already happened at announcement time.
The next change will be once the new shares are added to the register.
Taking the existing shares at current price plus new shares at rights price, following the raise they should trade at around 37p.
Assuming no change from here.
Based on the daily mileage figures, the highest mileage conversion to installs comes out at 44,745 total installs on the 15/12/22.
Mileage can be a little higher pre-christmas, thus flattering the numbers, but if we balance that with there still being 2 weeks for further installs until end of year, I suspect that is a fair balance.
So looks like they have averaged 1110 a month over the last 3 months, (3330 for the quarter).
Monthly figures bare out this average, which surprised me a little, as I thought that October and November would be lower due to supply constraints, and a big jump in December.
However that wasn't the case, and October/November were slightly better than December
Unfortunately because of Christmas. December figures are very unreliable, and we probably won't know now if new supply is making a difference until late Jan.
Given we know how slow customers have been in fitting previously, the new supply may take at least 3 months before it really starts to come through into installs and mileage.
I have recurring revenue from Fleet at AUS $22.5m from today. Which given we are half way through the Financial Year,
should be roughly what is declared in final results if 2nd half has similar growth, ie 4900 units in 1st half.
However should be better than that as 1st quarter was poor, and Cenkos forecast much more (24k FY from memory).
Given we are currently at 1110 per month and supply issues easing, I'm leaning more towards the conservative end and expecting another 8K in 2nd half .
Hopefully the company will surprise on the upside.
Happy New year All
6.20 and 6.9.
Don't see much changing in first half of year.
The market needs to see significant out performance and more certainty of moving into profit going forward.
Auto numbers will still be too low at this stage, although possible November numbers could surprise and give a major boost.
Expecting share price to be fairly static until 2024.
Hopefully the rise will come then.
I accept you can avoid a lot of dilution by subscribing fully in the rights.
However it's costing 20m for the issue to guaranteed, and they have taken a bridging loan of 60m, to get them through to February, which will also be costing.
So by the time of the rights issue, they will likely have burnt through about 85m of the 325m raise.
If it's not fully supported, the guarantors will sell in the market and take the price lower.
I wouldn't go anywhere near it personally.
Most funds are selling shares to cover redemptions, not buying currently, so every chance it's not fully subscribed.
S2020,
You are correct that Fleet has to date done the heavy lifting, but I believe you are wrong about what matters in the short term.
You are correct that Fleet generated A$40m revenue last year and auto sales was about A$5m.
However that total figure needs to reach A$90m to reach profitability.
In the next 2 years if Fleet continues with typical growth rates, I suspect that Fleet may increase from 40 to 45m, 50m at best.
Which means auto needs to go from 5m to 45m, which I had penciled in, although am now less optimistic, than I was.
So Auto really has to perform to hit these figures.
The above are my figures, however looking at Cenkos figures, they forecast after 2 years that Fleet increases 20%,
and auto 300%.
So not radically different from mine. They have auto slightly less than me and Fleet slightly higher .
Hence the reason I say its all about auto in the short term, is that, getting to profitability in the next 2 years, is only possible if Auto delivers.
Fleet is fairly predictable (given the level of recurring revenue) so I'm not concerned about it delivering what I expect.
But even if it seriously outperforms, while still aftermarket it can't solve the profit issues in short term
Lostinfrance,
You need to look at the KPIs again, as you are making the mistake of reading the KPIs the way the company wants, and ignoring the key elements, ie those which can be worked out from the figures presented, but not highlighted.
Currently they tell us how many cars are on the road and percentage growth, quarter on quarter.
This is a meaningless stat, which only looks good in the early days of ramp up. They will eventually do away measuring the growth element of this stat as it becomes meaningless with time.
Whilst I expect they will continue to advise total cars since inception, they will drop the growth indicator for the following reason.
Q4 was 447K - Q1 was 560k which they present as 25% growth.
In 2 years time when we have 15m on the road and they increase this by 250k that's about 2% increase.
Not great is it??? and yet 250k is much better than the 112k increase last quarter that was shown as 25%.
Its supposed to be a growth stat, yet by its nature it can only decrease over time no matter how well they perform.
Expect the company to remove this stat at some point soon, and replace it with a figure which shows growth from quarter to quarter sales.
Q3 to Q4 was 105K sold
Q4 to Q1 was 112k sold
Which works out at 6% growth quarter on quarter. That is the key figure, and not the one they currently present.
I fully expect this to replace the existing growth stat, once the figures start to look better, and the other figures look worse as they can only do.
6% per quarter is about 30% yearly growth and no where near enough to reach profitability quickly enough.
Glandore,
Assuming Fleet continues at current roll out pace and little happens with Aviation, then auto needs to do the hard graft.
I calculate the following.
1. Get to profitability - 2.5m auto units a year
2. Profit levels that support a much higher market cap - anything above 8m auto units a year would see the shares re-rate if that hadn't already happened.
Last quarter was 112K auto units, so currently averaging about 450K a year based on end September figures.
How quickly we move from 450K to 2.5m is anyone's guess.
But I expect it to happen during July 2023 to June 2024.Financial Year, based on previous company indications.
It's understanding how quickly things move from it being an optional installation to standard. Clearly we are still in the optional phase.
KPI's going forward will be key to showing whether the significant jump in numbers is occurring. At least one of the next 4 Quarters needs to show a very big jump. Which is why I was disappointed with the latest KPI figures.
We need to see auto increases far greater than the 6%, they delivered last quarter.
50% is the minimum we need to start to see.
For me unless they pull a rabbit out of the hat, the short term is all about auto.
Auto should be what makes the market wake up to this company, and guarantee it's success initially.
I'm not discounting the other arms, but they will take longer to become trans formative
GLA
Seize,
Boom is right, it's not massive, and never will be. As usual you ignore better informed posters, and continue to ramp and post anything and everything about see. Most of the time it's not even us.
Give it a rest for God's sake.
Leave it to those who at least understand the company.
In the main this board is a good source of information, let's keep it that way.
It's AUD
From memory I'm sure he said 60 direct, and 40 indirect.
From the last set of figures I've got it averaging about 42, but that should increase with more direct.
As of today I've got 22m recurring revenue from Fleet.