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Olly. You are dead right, VDTK do need to sort their sales team out and generate some decent sales.
In my view they also need to revamp their BOD, improve their website, IR, PR and marketing materials. In a perfect world they would hire a global sales force to shift their product, set up an SPV leasing company to facilitate sales to small cash strapped companies who can't afford the initial upfront deposit payment, embark on an ambitious marketing campaign, start shipping POC panels to potential customers on a sale and return basis. So why don't they? In a word, lack of capital. Post the cash raise and repayment of Gavin Mayhew's loans they probably need to be careful with their cash. So if the 3rd party sales team don't hit their straps pretty soon, then I wouldn't be surprised if VDTK beef up their in house sales team and revamp the BOD. Whether they have the resources to hire a full time global sales team of 18 is another matter entirely. The website/Twitter a/c upgrades should be a fairly easy fix!
Olly. You raise a very good point! If the product is so fantastic ( as claimed) why isn't it flying off the shelves?
Firstly I think Rob has been way too optimistic in his forecasts of when orders would get over the line. This could have something to do with Cov19 which has restricted movement in areas like Australia and led to procurement decisions being deferred for weeks if not months. As I understand it, VDTK haven't lost any deals to competitors and haven't lost out on price. They appear to be cost competitive with the likes of DAS and BIPV. So why haven't the deals materialised? I think financing for some of these projects may play a part. I suspect that some companies won't commit to a large (1-2MW) project until they are 100% convinced that the technology works. SAF ****stan didn't place the 1.5MW order until they had trialled a 75KW Powermat. It seems that Intergroup Mining have adopted a similar strategy (75KW initial order with the prospect of 1-2MW follow up orders) Maybe some of Rob's optimism reflected the optimism of the sales force who subsequently failed to get the deals over the line. There could be a number of projects still under negotiation or awaiting up front payment. It's always possible that a couple could be sealed in the space of a couple of weeks and investor sentiment could shift.
Imo what would be really helpful would be for the following to happen. When (hopefully!) the next order is announced, Rob sets up a meeting with an outfit like Proactive or Investor Meets Company and gives an outline of the corporate strategy, the opportunities being pursued and the challenges facing the company. Love them or loathe them, private investors hold a significant shareholding in VDTK!
Sophie - I still think offshore oil&gas and mining are great strategic mkts for VDTK to pursue. I hope the AF Global partnership enables them to get a foot in the door with some industry heavyweights. Australia remains a key strategic mkt and there will hopefully be some follow up orders from InterGroup Mining which could trigger other small miners to take the plunge and order Power Mat solutions.
As far as the roofing market is concerned, the BIPV mkt is a huge market and I wouldn't be surprised if VDTK make some strategic hires to target this sector. I suspect we will see strong growth in low carbon footprint modular housing in the coming years with SPVs integrated into the roofing structure. This could emerge as a huge market for VDTK. As you say, 40% of roofs can't currently support the weight of traditional SPVs so there is a huge unaddressed mkt for VDTK to pursue. Its unclear why their tie up with Metrotile came to nought.
As far as the 3rd party sales force is concerned, I guess cash constraints meant that RR had limited options when he took over as CEO last May. So far they have failed to deliver the goods so VDTK may decide to recruit experienced flex panel sales people from competitors.
All it will take is a couple of big deals to come through to reignite interest in VDTK. Call me a blind optimist, but I'm still hopeful we will see a deal or two coming through in the next few months. Until then it's just a question of grinning and bearing the daily SP fluctuations and remaining patient!
Sadly, the longer there is no news, the lower the SP will fall. There has been no positive news since the small InterGroup Mining deal (75KW) was announced back in late September almost 4 months ago. You do scratch your head and ask what the global sales team of 18 are up to! Doubtless numerous discussions are taking place behind the scenes, but VDTK really do need to seal some deals in the next month or two.
Interesting that European Transportation company H Essers are trialling IM Efficiency's Solar on Top panels on 2 of their truck. Results could come out in the Spring.
If successful they (according to their CEO) plan to deploy across their fleet according to the CEO. H Essers are a pretty large (and financially solvent!) player in the European transportation sector: 2019 t/o E746m, fleet of 1,475 lorries and 3,340 trucks.
VDTK's paid trials with IM Efficiency were delayed by Cov19 and the onset of winter. As far as I am aware VDTK are still in the mix for contracts from IME as and when the paid trials are completed. If successful, VDTK would be in pole position to leverage this success into other global transportation operators in Europe and N.America.
SolarOnTop pilot with two vehicles running at H.Essers
Sustainability is one of the biggest goals within H.Essers. In their ongoing search for ways to make things more sustainable, H.Essers recently joined forces with the Dutch company IM Efficiency. Since September, a pilot project has been running in which two of their trailers are fully equipped with solar panels, so that they can investigate the extent to which solar energy can provide a vehicle with green power. "We are the first logistics player in Belgium to try this out," says Dirk Franssens. "It all started with a simple question: can we make a vehicle more energy efficient by using solar panels? In collaboration with IM Efficiency, which is an expert in installing solar panels on heavy vehicles, we converted this question into a working proof-of-concept".
Special technology
Martijn Ildiz, CEO of IM Efficiency, is closely following the project: "Equipping trucks with solar panels can significantly reduce the vehicle's CO2 emissions. At IM Efficiency we have developed a technology to realize this, called SolarOnTop. The pilot project we are carrying out with H.Essers provides crucial insights to make the SolarOnTop robust, reliable and effective. This two-vehicle trial is a great first step".
On to spring
The two trailers are currently being actively used within the fleet. And the expectations are high. Dirk: "That's why we want to collect as much data as possible about the precise operation of the solar panels in combination with the truck. We are counting on a CO2 reduction of 5 tons per installation". It remains to be seen exactly what the results of the project will be. "Because we started in September and soon found ourselves in the dark months, we don't expect to see more results until spring," explains Dirk Franssens. "It may sound futuristic now, but if IM Efficiency's SolarOnTop installation proves successful for our trucks, we will probably equip a large part of the fleet with solar panels."
https://imefficiency.com/feed/solarontop-pilot-essers-december-2020
In my view, teaming up with experienced global distributors like AF Global that are targetting key market segments is a sensible diversification strategy (although unlikely to immediately result in a cascade of deals).
The jury is still out on the success of the 18 x 3rd party global sales people that have been recruited to work on commission. Its fair to say that so far results have been somewhat underwhelming. Difficult to say how much Cov19 is playing its part in slowing deal flow down or whether VDTK ultimately need dedicated full time experienced sales people who can evangelize about their products or whether other factors are at play (generic reluctance to adopt new technology in the mining/oil & gas sectors/time taken to develop comprehensive packaged solutions for end markets like transportation/EV charging etc?)
It remains possible that signing one large Power Mat deal will lead to a snowball effect and other customers will follow suit. The delay in the SAF ****stan order clearly hasn't done VDTK any favours and sentiment on the shares is currently pretty depressed. Need a large order or a substantive Paragraf JDP update to turn things around.
As far as communication with investors is concerned, VDTK could do themselves some favours by revamping their website, posting presentation materials with a clear strategic vision, consistently tweeting updates on non financially sensitive company developments (distribution partnerships etc) as and when they occur rather than allowing them to percolate out into the market from random customer posts on LinkedIn, increasing the company exposure with interactive websites like Proactive/Investor meet company etc)
Months of radio silence do the share price few favours even if ultimately it is only new confirmed contracts with money in the bank that will drive a sustained SP rerate. What is clear is that paid trials with the likes of IM Efficiency remain ongoing but that its taking longer than originally expected to result in firm orders. As WB says "It's waiting that helps you as an investor, and a lot of people just can't stand to wait"
The partnership with AF Global looks a savvy move and a feather in VDTK's cap.
Targetting the oil & gas sector where VDTK has a competitive advantage (ATEX certified) and can leverage CEO Rob Richard's expertise in the oil & gas sector.
End customers include industry heavyweights with deep pockets who may be keen to build their "green" credibility.
Possibly marks a continued shift from high risk developing markets such as sub Saharan Africa (Nigeria) which have proved less than successful in the past!
SnipVW. 3 questions:
1. Are you currently invested in VDTK?
2. If so, why? (As you clearly have zero confidence in the investment case)
3. If not, why are you on this BB? Apart from VDTK, there are over 1,000 other AIM listed cos whom would be grateful for your cash.
My advice - if you are invested in VDTK and have zero confidence in their product, management and strategy, fair enough. Sell out & move on elsewhere. If you aren't invested in VDTK and don't subscribe to the investment thesis, invest your money elsewhere.
BBs ) are typically echo chambers for investors who believe in a company. If you don't believe in the investment case, move on and invest elsewhere. Simple. It's your money and your call.
Nobody is forcing you to invest or believe in VDTK, Paragraf, their management, product or anything else related to the company!
At the end of the day you make your bed and make the decision whether you choose to sleep in it.
One final thought - Unicorn AM ( in their VCT fund( took a 5.5% stake in VDTK at the November CR. Of course IIs aren't infallible but Unicorn have a solid reputation in the small cap investment world as savvy investors. I would be amazed if Unicorn invested in VDTK without having done extensive due diligence and been provided with details of VDTK's potential order pipeline over the next 12 months. It also seems a reasonable assumption that they had some confidence in the investment potential provided by VDTK's partnership with Paragraf.
In many of their target mkts ( offshore o&g, mining, transport, EV car ports) VDTK aren't trying to dislodge incumbents. I believe they are trying to seed and commercialise new markets. However, cost will likely play a big role in whether VDTK are able to penetrate the residential roofing mkt and dislodge incumbents ( Tesla etc!). I suspect that VDTK may eventually try and penetrate this segment when they have the economies of scale to drive costs down and when their BIPVs (if they develop them) can be designed into new build modular construction projects. I don't believe this will be a significant market for VDTK in the next 12 months unless they make strategic hires from competitors to accelerate penetration of this segment. Post the CR they have some 'cash to splash', so who knows.
Confidence was based on the CEO's statements in RNS released in the summer that he was confident that the SAF Pakistan and BTMNs orders in July/Aug would lead to VDTK reaching cash BE by YE2020 as more orders rolled in on the back of an expansion of the global sales team to 18. If I was to hazard a guess as to why sales have been slower than expected in 2H2020 I suspect it is a combination of Cov-19 (delayed trials at IME etc) , the time needed to prove to potential customers that their panels deliver the claimed cost savings, the time required to achieve certification ( ie ATEX) to penetrate specific verticals ( off grid oil & gas) and the resource constraints resulting from RR having to focus efforts on fund raising/recruiting a new FD and restructuring the company. My confidence was also based on the extrapolation that VDTK wouldn't be expanding capacity in Lainate to 100 MW pa unless they were pretty confident that they would be able to generate sales to fill the capacity. That remains my view.
Sophie - agree. Based on the RNS flow in July/Aug I had expected 4Q2020 to deliver more in the way of contracts. No point trying to gild the lily - the last 3 months have been disappointing. Would have to agree with SnipVW on that one. It is now time for VDTK to stand and deliver.
Why is Paragraf a global leader in graphene? It is the first to commercialise Hall-effect sensors, has a strategic alliance with RR and TT Electronics to embed HE sensors into aircraft, has a strategic alliance with CERN and was (with VDTK) the first company in the world to produce a POC graphene integrated solar panel. Oxford PV currently claim higher efficiency levels than GISPVs but concerns remain about PE degradation rates hence the strategic decision by the likes of Swift Solar to focus on market segments with short life cycles (ie drones). Industry sources suggest that Paragraf has been the subject of take over interest from industry heavy weights like IBM and Samsung who have invested billions into graphene development with negligible success. The limitations of Moores Law and the possibility that Paragraf could be within 3 years of commercialising graphene wafers (thereby disrupting the entire IC industry) gives an inkling as to why Paragraf might be such an enticing take over candidate for the likes of IBM and Samsung and why Paragraf has received financial backing from Hermann Hauser backed Amadeus Capital.
In terms of RR's contact network I suspect that a lot are located in the Middle East based on his experience with Siemens Power. Relocation to the UK would bring him closer to VDTK's production facilities in Italy and investor base (primarily UK based inc Unicorn VCT). In terms of Australia , VDTK have a sales presence in Sydney (Andrew Cutler) and (judging from the June Vimeo interview), major shareholder Paul Harrison also plays an important (if unquantified) role in their Australian marketing efforts. As far as the UK/Europe is concerned, I suspect that major shareholder George Katzaros (who is UK based, set up VDTK and helped establish the relationship with Paragraf) has extensive industry contacts based on his CV detailed on VDTK's website.
The 3rd party sales team of 18 were recruited over the summer. So far results have been mixed as commercial sales have been limited. The jury is out - they may hit their straps and start delivering sales in 1H2021. So what has changed? VDTK have raised £3.5m in Nov 2020. Even allowing for the Nomad fees relating to the CR and repayment of director loans (Gavin Mayhew) they now have money in the bank (>£2.5m) and more options available in terms of bolstering their sales force. They also have the flexibility to ship product to potential customers on a trial sale and return basis - prior to the CR working capital constraints meant that this wasn't an option.
In terms of what RR has achieved since his appointment in May 2020, I suspect that a lot of time has been consumed with revamping the company's personnel, structure, distribution network, strategic focus, putting the company's finances on an even keel and dealing with 'exogenous variables'.
2020 was a year of transition.Hopefully 2021 will be the year when VDTK's commercialisation efforts finally bear fruit.
Clearly it makes little sense to have the CEO of an AIM listed company with production facilities in Italy and a strategic partner (Paragraf) located in Cambridge,UK who is living and working in Bangkok. I suspect this is a temporary fix, and in the fullness of time when circumstances (ie Cov19) permit RR will relocate to the UK/Europe, hopefully in 2021.
VDTK appear to have structural issues (BOD composition, major shareholders' influence, efficacy of global sales force etc ), however their product and strategic alliances suggest huge potential IF they are able to translate potential into sales.
I suspect we will see BOD changes in 1H2021, a shift in focus from commission based part time to dedicated full time sales staff, further distributors and strategic alliances being announced with solutions based SPV providers and a shift in strategic focus to verticals and geographies where customers are not as cash constrained as they are in developing markets.
Post the November cash raise, VDTK are in a much stronger position than they were 12 months ago and they have won business in key strategic markets such as Australia which can hopefully be leveraged in 2021. Paragraf is arguably the global leader in commercialising graphene - VDTK's strategic partnership with Paragraf remains something of an unknown, but the potential commercial impact could be a "game changer". An investment in VDTK remains high risk, high reward, as reflected in the extreme volatility of the SP as investment optimism ebbs and wanes.
I suspect that there are a lot of deals under discussion but how many of these get over the line is anybody's guess. My gut feeling is that the BOD (what is the role of Gavin Mayhew now his loans have been repaid?) and sales team need to be revamped and VDTK need to recruit full time experienced sales people to target key customers in developed markets.
For me the critical markets are Australia, the Middle East and Europe inc the UK. I think the most likely markets where VDTK will sign deals in 1H2021 are mining, oil & gas, transport and EV car ports. Getting new customers to trial and then adopt their SPVs is key. Once they get a couple of deals over the line, then they can market this to other customers. The good news is that VDTK are cashed up so that have a lot more cards up their sleeve than 12 months ago when they were essentially running on empty. The Paragraf JDP remains a 'dark horse'. Even if the JDP update doesn't specify a commercialisation time frame, hopefully VDTK will be in a position to commercialise GISPVs in the next 12 months. If they do, the impact on the SP could be significant.
Transportation could be a large market for VDTK. We know they are still in trials with IM Efficiency for their "Solar on Top" range. When the solar panel contracts are awarded by IME I suspect that they will be split between several suppliers of whom VDTK could be one. Some idea of the global market: Global truck fleet = 75m. Potential solar panels per truck 8 x 350W (2.8KW). Let's say 10% (7.5m) of the fleet shifts to SPVs that is a 21MW mkt.
When I first invested in VDTK I asked 3 questions: 1) Does the CEO have a vision for what this company can achieve? 2) Does the company have the product to enable the CEO to deliver that vision? 3) Does the company have the resources to enable the CEO to fulfil that vision?
Despite today's disappointing news, I believe the answers to those first 3 questions are still in the affirmative, hence why I remain invested.
Physiomics up 75% today! Out of the blue. Patience is key. Hold for gold.
I believe that the SAF Pakistan news has hit VDTK from left field. Disappointing but not terminal imo. They have fessed up, the order is postponed not cancelled, SAF Pakistan are happy with the performance of the panels that were delivered in July so there are no issues with panel quality or performance. It's a judgement call on my part, but I believe that the investment case is still intact and that there are a large number of business deals currently being discussed, of which the likelihood of at least one being successful in the next 12 weeks is high. Hopefully there will be more than 1!
I think 2020 has been about moving from technology development to "seeding the market" ahead of full scale commercialisation in 2021.
VDTK have had a few small scale orders (Black Tulip Minerals, Endeco SPA, IM Group) in the mining and oil & gas sector. Once the solar panels have been delivered and demonstrate the cost savings, it is reasonable to expect that there will be follow on orders (as was the case with SAF Pakistan). Once the follow on orders accumulate, VDTK can then market their panels to some of the bigger players (Aggreko etc) and orders will hopefully snow ball. Commercialising a new technology (flex SPVs) to a new market (mining/oil & gas) can prove challenging, particularly if you are a small AIM listed company with a £29m mkt cap! Relationship building with potential new customers takes time - it was perhaps over optimistic that the flurry of deals announced in the summer would be repeated in 2H2020.
However, I believe that the steps VDTK have taken to establish a global distribution network focussed on key markets, build out a global sales force, refine their product offering, expand capacity, drive down costs and (hopefully) commercialise GIPVs will all bear fruit in 2021.