The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
CMA offer at 480, yet SP hovered above 500 - a good indicator market expected a higher offer, now arrived
GXO offer at 605, yet SP hovers at 615 - that's enough for me to continue to hold in hope of a higher bid yet.
Who knows, can go either way. If you sold out already and made a decent profit - good for you.
Think the mcap is nearer £5m and when company was doing well a few years back, the SP was in the 70s and mcap was nearer £10m so it's always been a relatively small company.
Dividend was circa 4p in those days. If they go back to a 2:1 split, hopefully the final dividend will be around 2p (3p for the year). So, this may just be the start of the recovery with quite an uplift still to come. Let's see. Think they need a few reporting periods of positive progress to fully get back there.
What I can't understand in all this is why they are spending money on studies etc using borrowed money costing up to 20% in interest, when they could sit tight for a while, rebuild cash and then progress the next opportunities. Are the geothermal projects going to produce such a good return that it's worth paying the lon interest to bring forwrd / accelerate the start date of these projects. Wish someone would ask the question and get the answer to that most basic of questions.
Much as the likes of Singhie insist on embarrassing themselves by posting nonsense on a daily basis with SP predictions six months ahead to four decimal points, the SP is falling because gas prices are falling.
Aside from the good achievement of getting all three wells and two compressors online and the excitement of cash now being generated (both of which were well flagged and priced in the SP), no-one seems to notice that the capacity of the plant is circa 12-14mmscfd depending on what you understand the capacity of each compressor to be and they are ‘only’ producing 9.5mmscfd. If the long term sustainability of the wells allowed, they could produce a further 50% more gas so I'm not sure that 9.5mmscfd is a good figure or not.
If they get their production up or gas prices recover, the SP will recover.
If anyone goes back to the GL interviews at the end of last year, it was clear that these historical oil assets in the South were very low down the company's priority list. Focus is Saltfleetby to produce enough cash to fund exploration of new possibilities such as geothermal. Whatever oil comes, comes. The plan was quite clearly set out.
I'm expecting a token 0.25p dividend tops. Of the 28M cash, over 15M+ was raised 2 years ago, 12M+ are pre-payments, so although they appear to be generating some cash finally, it's probably less than people think. The net profit for 2022 will be what.. 4-5M? I'm expecting a small final dividend to make a headline and then hopefully at time of results to put in place a progressive dividend policy. Surely if the order book is so strong, they will need to retain some cash to develop facilities. All good either way.
I actually agree with PB. This looks like the first 6 monthly period in the past couple of years where they have actually delivered what they said they would. Increased revenue, hitting the target, revenue sufficient to generate cash and a profit. Finally. After the last couple of years, the lower profile, steadier hands of MK look like what a CRO like HVO needs. Surely the corner has now been turned. GLA.
Don't see dividends being cut.
Pre covid there were special dividends.
This year instead of paying the special they used excess cash on share buybacks (£150M) which more or less equated to the share issued to raise money raised during covid to buy land.
Y23 revenue may fall but the dividend is well covered. if you're concerned, just don't expect a special or a buy back.
I listened in last night. Presentation was good and the project figures are excellent but I sold out first thing this morning on the back of the recent spike in SP.
Main points I took from yesterday was the Feasibility Study is next, hopefully complete by the end of next year. First revenue is by end of 2025 at the earliest, possibly early 2026 and the capital expenditure will be funded by 70% loans / 30% equity, this being very indicative (and in my view likely to involve a higher level of equity).
I get that the PEA unlocks the door to discussion with lenders and is a big step forward but will today's shareholders be rewarded long term or due to fund raising and dilution, will it be tomorrow's shareholders who will be benefit? I don't know. So I sold on expectation it will drift down on news, waiting for more studies with no revenue and then I'll look again in a couple of months to see where they are at.
In last night's presentation, GL hoped to be debt free by June /July next year, not by Q1.... this based on successful sidetrack, compressor installation, getting up to 12M scufs per day and an average unhedged selling price of 200p per therm.
As Profitbagger pointed out last week:
"H1: Accounts receivable 13.3M vs accounts payable (ie incl prepayments on contracts) 23.7M vs cash of 15.9M"
So now cash is 20M... but that's was due further prepayments following end of the reporting period.... so are there really funds sloshing about to do share buybacks?
Also, they raised 15M two years ago so are statements made by other posters that they are continuing to grow cash monthly true? or a simply a repeat of CFs comments in the couple of years which were shown to be otherwise. The reason given for the raise was to have a strong balance sheet to impress pharma as part of winning contracts. Does it make sense to hand it all back to shareholders after sitting on it for 2 years?
OO just needs to get it's revenue up and do what they promise. The rest will follow.
... there.. their..
Don't think anyone doubts OO can be profitable but on a fixed cost base, they need to get there revenue up.
Guidance of 50M for Y22 but only achieved 18.9M in H1 so they have a lot of catching up to do to reach their own guidance, - a 65% increase in H2 revenue compared to H1 - which if they achieve it, makes you wonder why they haven't been closer to doing 30M+ per half year period already considering their order book has been reportedly full for the past year and and a half.
These doubts in management's credibility will only dissipate when they start to consistently achieve what they promise to achieve.
I wasn't going to getting any more but did a second, small trade of 55k at 10.27 which did go through and I was very happy with. Not confident it will move soon, at least until some decent results are released, but tucked away in the bottom drawer for the long term. GLA.
Flova, a decent post. I added a few more today for the same reasons. Like others today, paid under mid price so felt like a decent price. Added on hope that the predicted Y22 revenue of 50M vs Y21 revenue of 40M, on a largely fixed cost base will feed through to profitability and some cash generation and the hope this will reflect in the H1 results, which will lead to an uptick in interest. Not with great confidence or faith as that was frittered away by OO in the past two years but with hope nevertheless for the future.