Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
I must say I’m feeling more optimistic on CPI now.
I had thought that the Y/E results in March would just be a rehash of the December statement & we would have to wait for August half year results but having been reassured by CPI that the pension shortfalls are well in hand & are in fact ahead of target, further disposals to come & now generating free cash flow I’m hoping for a reasonable uptick prior to & after the Y/E results.
It would be nice to see a few contract wins & some more disposals prior to year end to help give the SP a bit of an uplift.
I emailed Stephanie Little (public relations manager) with a couple of questions & got a very prompt reply.
1) I asked if they were expecting further calls by the pension fund from the upcoming March triennial review. At present, depending on future market conditions, they are not expecting further calls & have in fact being prepaying future years calls.
2) I asked if they could give an indication of expected sale proceeds from disposals over the next 6 months. The reply was 0.75 - 1.0 X revenue but I’m not sure what revenue they are referring to.
If this makes more sense to someone else please post.
To start with negatives I think the Y/E results due in march won’t show any free cash flow as substantial contributions to pension fund + disposal costs of sales (as indicated by SM) will take up all free cash flow. I also think that because of high inflation there is going to be another big cash demand on the triennial review by the pension fund & I think this is why SM indicated dividends wouldn’t start until 2024.
Hopefully that’s all the bad news.
Positives
Debt pre IFRS down to NIL & post IFRS also reduced
More cash in from additional disposals.
Cost savings really beginning to show in the bottom line
Hope for some good contract wins.
The goal posts on this seem to keep moving further away & unless the IIs decide that this now represents an opportunity or we get dividends/share buybacks I can see this drifting along in the 23 - 28p price range. I’m still positive long term but I’m getting somewhat impatient.
My idea of buying an extra 100k shares for 23p and selling after results for a quick £5k profit at 28p hasn’t exactly gone to plan. The first bit went fine (buying) & I think I may have a long wait for the next bit.
This really is a frustrating share, good news doesn’t seem to achieve anything apart from a very temporary uplift.
I have a feeling that SMs statement that dividends won’t start until 2024 is because we won’t see sustainable free cash flow in the 2023 Y/E accounts & will have to wait for 2024.
I wish I was entering CPI now. As a long term holder I’ve got 600K shares at 33p after quite a lot of averaging down. Still probably cheaper than Schroeder’s entry. I’m still very positive on these but I suspect I may have another year to wait but for a share which I would expect to at least triple to 70p or so & maybe a good deal more I’m prepared to hang on.
Bring on Dividends or a substantial Institutional Investor
CPI pretty much deliver what they say. It does seem unbelievable that having virtually eliminated pre IFRS debt and made the beginnings of slimming the company down and trimming costs share price halves in a year. Contract wins, debt reduction etc don’t seem to do anything for the SP apart from a temporary lift & then a slide back again. I think the only thing that will kickstart this is a resumption of dividends.
@GoCPI & if there isn’t sustainable cash flow somethings wrong. All one offs (apart from pension contributions?) out of the way so should be generating £100m + so even a token dividend would be a big step to encouraging more investors & a rise in the SP
@Terry
I’ve also been in CPI a long time & retrospectively I shouldn’t have invested then.
However it’s a mistake to reflect too much on the past but what is important with CPI is where we are now & where we are going.
To me a company that will within 6 months have virtually no net debt, has an income of £3b + with a considerable amount coming from renewals, is in an area largely unaffected by recession, has built in inflation increases for the majority of its contracts, an income that is growing whilst costs are reducing & should (& the sooner the better) restart dividends is an attractive proposition especially at the current price.
Voli I seem to remember in the last update (or the one before that) JL said management is too top heavy for the reduced size of company & they will slim down & also that once disposal costs are stripped out profit is there so that infers that profit is minimal or negative if you include one off costs
Much better presentation than previous updates.
Nothing earth shattering but with net debt near to nil by H/Y & increased revenue this is moving from a recovery share to a growth share & as such should attract additional investors
If CPI is making (as they state) somewhere between 5% & 10% profit margin (presumably this is meant to reflect all costs involved) on a T/O of £3b+ ( even allowing for some old contracts that don’t meet this criteria) this would indicate (once all one offs re disposals/restructuring are out of the way) profits should be £150m +.
At this level the company should be worth at least 8X profit i.e. £1.2b
That’s what I’m hanging on for but tomorrow should give us an indication if this is realistic or not.