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Should investors comment negatively on stocks they don't hold?
Answer was yes - 55% - to share information

All from a survey by the Toople promoter Justin Waite

https://twitter.com/sharepickers/status/1084175350442196993?s=21

Do you remember the CEO in an interview back in September saying retail clients provide 30% gross profit? Funny how the annual report says something different where in writing this time it says 21.7% as a clip shown below

Annual report said :-
Group revenue grew by 17.5% to £1,505,000
Gross profit increased in GBP terms by 28% to £203,624 (FY17: £159,305)
Overall gross margin improved by 1.1 percentage points to 13.5%
Retail margin up from 16.5% to 21.7%

So the £250k sales achieved in October is for 2 years so £125k for the first 12 months which will create additional gross profit of £30k (assuming they again increase their margin this year to 24% from 21.7%)

So bearing in mind the loss for the year was £1.4m, the record sales per month are small increases in GP of just £30k per month. Ignoring wholesale customers as the margin is way too small, I am looking at retail customers. Assuming Toop continue to perform well on the sales each month, I suspect the GP increase will be around £200k for this financial year (around £33k per month GP for the first 12 months is approx £400k but only half the GP will be achieved in this financial year).

But this will be eaten up by additional employee costs to gain these contracts and the digital advertising costs. These costs will be much higher than outsourcing but at least they are gaining additional revenue. Outsourcing was a waste of time but the cost savings from action I suspect are negligible. So still see a loss up to Sept 2019 close to a £1.5m loss.

What is your view on paying back the £572k loan to DB in March. I am sure DB will request it to be paid on the third anniversary after selling his nearly 40% holding. Clearly Toop have the funds so I can only see it being paid.

I feel this will be paid but not in H1 as this will not look good in the interims. Shame we have to wait until May/June for the next precise figures.

On page 52 is the loan
https://www.toople.com/wp-content/uploads/2018/12/Signed_FS_2018.pdf

These large trades are worked by the MMs for hours, a day or so and the time identified is when the last shares completed the transaction.

With all the buys over the last several trading days, my view is the large trades are both sells but all in the price anyway so it doesn’t matter really.

Just have to wait to see if a farm out is agreed or not. So looking too much into these large trades makes no difference and when the news is announced, the SP will either jump up or down instantly where you cannot buy or sell.

So hoping for all, an agreement is reached this week without any further delay.

Bradley - the sales may be slightly up due to the additional advertising costs but the cost of sales are also up and the administrative expenses are up even more with the costs of digital advertising and additional costs of those employed to support the sales team.

Funny how for example , an extra 5 personnel to support the inhouse sales team will cost £100k minimum. Yes they be more efficient than outsourcing but will need an additional £400k revenue to support this additional cost before Toop benefit from it. Looked at the gross profit recently and this may put this in a more perspective view?

But I’ll leave it to Miss G to explain your misunderstandings with TOOP but having tried so many times, I’m looking forward to the summer to prove your view is so completely wrong.

But also looking forward to my figures being considerably more accurate than the posting you believe. At least mine are based in figures produced by the company and not a figure of my imagination.

But you need me to quote more figures? All quoted, all more accurate than yours and yes, sales will be up obviously as they are spending a fortune on digital advertising. But so will the cost of sales and administrative costs be up but unfortunately, the cash outflow will mean the cash balance will be reducing to zero over the next 6 months.

Still losing £1m per year in the summer, no cash in the bank and the administrative expenses being £1.6m or more and they need more funds to continue. As a fantastic investor and supporting the company, I am sure you have a pot of gold to increase your exposure here to support the company and invest more at 0,0667p to provide funds to ensure they are a company as a going concern?

Looking forward to your financial demise if that is your view but hopefully before then, you will wake up and smell the coffee.

If you click on my name and read my comments from September to October. These views are very similar to ERV1, Miss G, Todster and kitkateat and a few others.

The funds will run out in the summer as the gross profit of a a few hundred grand will not cover the administrative costs of £1.6m per year. All the funds are being spent on digital advertising to increase the revenue where in theory, margins if you believe the CEO is 30%. But the benefit of this revenue will not be beneficial until after 6 months of receiving the order.

The large wholesale contract estimated to create revenue of £3.5m over 3 years is pretty useless really. This will just generate gross profit of £350k over 3 years. As it takes time to generate additional revenue this way, I suspect the gross profit in year 1 will be £50k, year 2 £100k and year 3 £200k.

Just read the accounts and you will see there is too small a revenue being generated at a small margin as you will see the costs of sales. To breakeven and cover the costs of sales and overheads will need revenue of £10m per year. Look at the current revenue and to me, cash will run out in the summer and still losing £1m plus and hence a huge discounted placing around the nominal value of 0.0667p or administrators will be called in if unavailable to raise the funds which will be required.

Clearly you have a different view and you may think my view is rubbish. Well many have been bearish on Toop since the IPO at 8p nearly 3 years ago. The business has not changed and if you read the last 3 years Prospectus’, they are pretty much the same reports.

The next Prospectus in the summer will be pretty much identical if they get to that point

Yes Justin would put his house on CEB Resources which is now Andalas Energy.

So he’s good at picking out the rubbish as well so his kids are no longer going to Eton anymore - lost over 99% there and he may be repeating it again here.

Pleased it’s just a punt though as clearly will never be an investment as this is another POS

Change of auditor

Well blacksheep

You were one of many that laughed at me when my target buy in was 17.3p. Due to the failures of the BOD I reduced it to 14p and without any progress further on I reduced it to 10-12p as my view is funding is required.

I then reduced it to 5-7p due to the lack of progress on other projects again and in my view, the requirement for further funds as the revenue from ED is not enough to cover the administrative costs and working progress to further these projects to generate additional revenue that is clearly required. Today, my view is the BOD are taking a risky strategy if they do need further funds.

May be if you took more notice of other views, you may not be over £50k down 9n this stock alone.

The RNS from 20th November said
“Highlands continues to generate revenues from its operations at the East Denver Colorado shale project and the Board expects the revenues to increase significantly with the commencement of production from the 6 new wells in December 2018. Importantly, the Company anticipates delivering sufficient cashflow to cover its overheads for 2019.”

Well with the figures from blacksheep15 which are similar to mine with revenue from ED being £2.3m for the first year. Well below are the administrative expenses since HNR was listed.

Administrative Expenses

Year to March 2018 £6,878,055
Year to March 2017 £3,369,749
Year to March 2016 £1,818,049 for the first year during which time the shares were suspended for 7 months

Last 6 months to Sept 18 was £3,028,735 with 5 months where True controlled EX but if people think the revenue from ED will cover administrative costs, then God help you.

But the point is BlackHopper, the BOD just quoted ED covering the overheads and not other projects needing to contribute to covering these costs.

And people wonder why the SP is where it is - quite clear to me

“The Agreement includes performance targets whereby the Contract Miner from 1 February 2019 will be required to have 2 fully operational plants with a minimum throughput of 200 tonnes per hour on a consistent 24 hours per day basis.”

This is ambiguous in my view. It says 2 plants to have a minimum throughput of 200t/hr - combined or separate?
So unclear whether each plant will run at 200t/hr or 100t/hr so needs clarifying in my view.

However, with the history of these contractors and previous agreements, I can only assume they have to produce 400t/hr 24 hours a day. But this allows for no maintenance time either.

XTR have never penalised the contractors that do not achieve the agreed levels anyway anD suspect they will continue to let them off when the fail.

Took some time though to get this agreement - what is it 6-12 months?

OSG

You clearly think that the company will receive revenue 25% higher than expected as the tax has to be paid first. Secondly, the revenue per month will decrease by 16% like it did with Wildhorse & Powell.

But the main issue many seem to forget is that this news of 8 wells drilling and in full production was advertised back last April. So no new news and fully expected and built into the SP.

We just have to hope the IP is in line with Wildhorse & Powell but True have performed well and only a month later than expected. You can see from the expected figures I quoted yesterday are based on your figures but once the tax has been paid and the monthly reduction of 16% output has been taken into account.

The main reason in my view is the SP will not change due to news from ED as revenue fully expected for 9 months but HNR need additional revenue as these funds alone will not pay the administrative expenses. The uncertainty will prevent new investors as it is clear that the cash balance at the end of Seotember was just under £2m with quite high monthly costs even after funds no longer being utilised for ED for 5 months of the report. With no real revenue for the last 3 months since the report, the cash balance is probably only £650k. Yes the admin costs will come down, but to where? My view hasn’t changed and I still see £400k per month administrative expenses. Even if you lower this to £300k per month, additional revenue is still required with 4-6 months which clearly the market seems aware of.

As has been seen here from the multiple posters, it is all very unclear with little communications from the BODs of what the future and revenue prospects are from the company.

So whether it is 2 wells or 8 wells, the revenue from ED has been fully expected for 9 months and known pretty much depending of wti & gas prices and built into most peoples forecasts so nothing new. So a little unsure why you are surprised at the current SP.

Take the 20% tax off before it is distributed so with your figures OSG is a revenue of $454k which is £355k for month one and reducing by 16% per month as per what Powell and Wildhorse achieved in the first six months.

Unsure whether the SP is $1.8 below wti price like it was before so that may have an affect.

So
£355 month 1
£298k month 2
£250k month 3
£200k month 4 assuming current wti.

So need a large additional income over the next 4-6 months from elsewhere - Kansas clearly is the main project for this.

Looking forward to seeing the IP flowrates

At $3.052 - moves quickly

Also risky as True might put production on hold with the low prices.

BOD also assuming they achieve similar production rates as the first 2 wells - any difference when the monthly figures are produced and lower than anticipated could have a drastic affect on revenue and requirements for further funding.

Do they flare the gas or not?

Everyone seems to look at the optimistic view and completely ignore the potential hiccups that may come across. Just hope Highlands have looked at ALL the possibilities. Seems to be potentially more downsides than upsides. Time will tell.

With such a small cash balance with the revenue from ED reducing week in week out recently, the cash will all be gone by April without any further large revenue stream really.

I would have raised in 2018 with the information that is publicly available but hoping RP has something up his sleeve and a large revenue stream from Kansas will be generated over the next few months. But will Highlands need to invest in this project further to create this income?

Hopefully these figures will be of use to some. Clearly seen a few nervous investors getting out over the last few months. Were they right? Hard to tell but it is easy to buy and very difficult to sell any volume which has continued for weeks and months.

It is possible that single figures could be back soon and attacking 8.62p, an all time low since the IPO. I started investing in the first week of the IPO and tripled my investment between 9.6p to 9.7p. It never went below 9.5p until recently.

The major concern is if Highlands do need funds, the market will know about it and putting pressure on the SP. Clearly looking at trading over December where you struggle to sell any volume at all, I feel the market knows. Leaving any raise to 2019 just means my 5-7p raise is even more likely.

The company in the short term are risking everything on a good deal for Kansas and just have to hope, the figures work out. But at least Highlands have an excuse and just blame the oil and gas prices and not their risky strategy.

Also said on 23rd November“If wti hits $42 which I feel is very possible, the revenue will be reduced to $384k (£300k) and reducing by 15% per month and not a monthly figure several posters have said a few times.”

Well it hit it on December 24th at $42.43 after hitting a high of $76.81 on 5th October. I remember that most thought I was mad when I thought the low $50s was possible when wti was at $65. Well when it got to the low 50s on 23rd November, I felt $42 was possible. What a plonker I really am then!!

It can easily break $42 and when it did the last time, it stayed below $42 for 5 months and hitting $28 which will reduce the revenue from ED at the highest production rate which is not good timing for Highlands. Hence this is why I think the strategy is too risky by not raising funds in 2018.

But all I heard from many posters was gas prices were rising. The gas production is a small part of the overall production as RP was expecting over $600k for the first month where the revenue from gas would be just $40-$50k.

Well look at it now? Hit a high of $4.935 on 14th November which is now 33% off it’s high and sitting just below $3.3 which ruined a few investors bullish ideas. If this breaks $3 it could drop to $2.7. Not that it matters too much in the short term but in 2020, this could hopefully be a larger part of the revenue as the oil production depreciates.

I can easily see an average oil and gas prices over the next 6 months being on average 15% below the current figures. This will reduce the revenue from ED to £1.16m from my current forecast of £1.36m. This doesn’t sound much but with little cash in the bank and no further revenue announced yet, feel the Directors have everything crossed hoping for price reversal on definitely wti and less importantly the gas price.

September cash balance just under £2m with administrative expenses at 450k per month leaves the cash balance at the end of December of around £650k

January - Revenue £321k, Costs £400k, Cash balance £570k
February - Revenue £274k, Costs £400k, Cash balance £444k
March - Revenue £231k, Costs £400k, Cash balance £275k
April - Revenue £206k, Costs £400k, Cash balance £-144k
May - Revenue £175k, Costs £400k, Cash balance £-369k
June - Revenue £156k, Costs £400k, Cash balance £-613k

So the cash balance will be negative around April and hence a risky strategy not to raise money in 2018. Harder to do being on the main market and expect the BOD wished they had performed the IPO on the aim market.

Wildhorse & Powell actual production
Month 1 - 41,366 barrels
Month 2 - 34,439 (should be 35,161 at 15%)
Month 3 - 27,588 (should be 29,887 at 15%)
Month 4 - 24,281 (should be 25,404 at 15%)
Month 5 - 19,655 (should be 21,593 at 15%)
Month 6 - 16,971 (should be 18,354 at 15%)
Month 7 - 14,255 (estimate at 16% loss per month)
Month 8 - 11,974
Month 9 - 10,058
Month 10 - 8,449
Month 11 - 7,097
Month 12 - 5,961

With 45,000 MCF per calendar month for the pair of wells if no gas is flared, then the gas production from all 8 wells will be 45000 x 4 = 270,000 MCF with $3.3 for each MCF meaning revenue will be 270,000 x 3.3 x 0.8 x 0.075 = $53k = £42k.

Oil revenue from all 8 wells with wti at $44.8 so $43 used with $1.28/£. At least the currency exchange rate has helped with the accounts in £s.

Month 1 - 41,366 barrels x 3 + 14,255 = 138,353 bbls = £279k revenue
Month 2 - 34,439 x 3 + 11974 = 115,291 bbls - revenue of £232k
Month 3 - 27,588 x 3 + 10,958 = 93,722 bbls - revenue of £189k
Month 4 - 24,281 x 3 + 8,449 = 81,292 bbls - revenue of £164k
Month 5 - 19,655 x 3 + 7,097 = 66,062 bbls - revenue of £133k
Month 6 - 16,971 x 3 + 5,961 = 56,874 bbls - revenue of £114k

Total revenue from ED assuming no flaring of gas
Month 1 - £279k + £42k = £321k
Month 2 - £274k
Month 3 - £231k
Month 4 - £206k
Month 5 - £175k
Month 6 - £156k

The total revenue for both oil and gas from all 8 wells for the first 6 months if the oil price and gas price stays the same will generate £1.363m so no where near covering the administrative costs. The next 6 months revenue will be approximately £670k so the first 12 months revenue will be around £2m. So these costs will not cover the overheads. Even if you look at pre ED and before the well pad production started, the administrative expenses were still over £3m.

With administrative expenses I feel will be around £4.5-£4.8m, additional revenue is needed. I also feel to generate revenue from Kansas, there will be a reasonable cost to Highlands even if a JV is found.

Administrative Expenses

Administrative expenses £6,878,000 for 12 months to 31st March 2018 with £2,289,090 for the 6 months to 30th Sept 2017. This leaves the 6 months admin costs to 31st March 2018 is £4,589,000 which is £765k per month. With £3,028,735 costs to 30th September 2018 and using £765k for April 2018, means an average cost for the remaining 5 months of £452k per month.

I feel the admin costs will reduce back to around £400k in due course throughout 2019 with a 6 monthly expense of £2.4m and so will use this figure for January 2019 onwards with £450k for the last 3 months in 2018.

As I said on 23rd November

“Fully expect the administrative expenses to be around £2.8m for the half year with a cash in the bank being around £2.5m at the end of September with payables and receivables balancing themselves out. Just hope these figures HNR achieve as anything worse, the pressure will be put on a further good revenue source pretty imminently and not just a potential revenue sometime in 2019.”

As my views are bearish the figures were again worse for the interims as they were also in July for the finals. And the majority accuse my views as being too bearish. On both figures, they were not bearish enough with admin expenses being over £200k more than my figures and the bank balance being over £500k less than I expected being below £2m.

Well it tickles me when I have seen posters quote the free float is so small entry - what a little of rubbish. You have it right, there are too many shares in public hands.

The share was well oversold and reacted accordingly but the news on the 13this the main news. Needs to resurrect the bullish views with Kansas being the main project in my view.