Member Info for DamayHill

The herd have arrived Hepran, but that's pretty rich given you don't appear to know the single product this company produces!

The share price reaction is welcome but (especially for newcomers or sideliners), the joy and jubilation is being overcooked here unless I am missing something.

I read it as £6.3m revenue in H1 on a like for like basis (taking into account the change in their recognition of revenue) so £3m in Q1 and £3.3m in Q2 and therefore well shy of their own £4m revised forecast, shared at a time when the cashflow impediments to production were already absolutely known and so should have been factored in. I guess what people are latching on to is the significant ramp up in the past four weeks and the implication that at current levels they can easily catch up. However, there is still a 75% yield so further scrappage and cash burn, which is our biggest danger.

The positive reaction therefore seems to be as much about the fact that there is SOME good news contained here but from the comments and reaction you'd think it that it's NOTHING BUT good news and that's far from the case, believe me. Imagine if they had only been in a position to report doubling of production over the past week or two weeks, rather than four weeks, it would put a somewhat different complexion on it because there would be no demonstration of ability to sustain.

As a LTH, I'm not doom-mongering at all here and I desperately want SCE to deliver. I just think a bit more qualification is required, but I may have missed something! It remains the case that the SP massively undervalues the company, but it also remains the case that there are very significant risks that are slightly abated by this announcement.

But I see the cavalry have arrived with their Booms and their Rockets and their predictions of a 5-fold increase in share price before teatime on Monday, so who wants to listen to a boring realist who's actually understands what this says!

Looks a near certainty now that the Q2 trading update will be delivered same day as the AGM (could be Monday I suppose). In an exercise in hope over expectation, I wonder whether Q2 has been in line with the forecast offered. Surely they are not going to sit in the AGM having just shared that they've fallen short again when £4m was their own revised 'coming clean' forecast a matter of weeks ago, when all existing headwinds were already known. Surely.

Darientaylor, not sure what you're underwhelmed by, these are exactly the results that were previously trailed - no surprises at all. As for the Davidson acquisition, blimey, give them five minutes. This was completed last September and the reporting period is to end of March. If you wanted to sell and you sold on the initial spike this morning, hats off to you for your timing though. Chance to buy back in at a good few percentage points lower, should you be inclined. Good luck to you either way.

Thanks Al180. By definition, the supply chain issues due to cash shortages were already well known to them at the time they shared the £4m forecast for Q2 in the presentation around the open offer. So absolutely no excuses there.

This may be perverse logic but I kind of think the closer we get to the AGM, the likelier it is that they'll just update on Q2 trading then. If that's the case, I think it's likelier that the trading update is decent, because I'm not sure they are brave enough or even stupid enough to deliver more bad news to a roomful of baying shareholders. We'll see.

Ideally, next week we would receive the Q2 trading update and this really ought to confirm minimum £4m revenues in Q2, in line with the revised presentation at the time of the open offer.

However, I fear that two lines in the subsequent RNS on 28 June may already put that figure in jeopardy and may be a prelude to a further disappointing announcement - I very much hope I'm wrong. Namely 'The Board's expectation of 2024 and 2025 financial performance are unchanged from those described in the recent fund raising, albeit now at the lower end of that described range' and 'However, April and May were impacted by operational supply chains caused by our working capital constraints in Q2 (now, since early June, fully resolved by the fund raising)'.

There ought to be absolutely no excuses for not achieving their own revised revenue forecasts and any factors that were already known at the point of that presentation, such as supply chain issues caused by working capital constraints, will not cut it at all as these ought already to have been factored in.

I'd suggest the market will be unforgiving of anything less than £4m.

These are incredibly low calibre contributions to discussion. Simply saying 'buy buy buy' or 'Scrap will be sorted. Up, up and up' is nothing more than a hope and sentiment. They are hopes and sentiments that you're entitled to have but they add zero to an objective and balanced dialogue about the challenges and opportunities faced by SCE. Zero.

LatentValue, agree that the quarterly updates are the essential staging posts here. Q2 revenue must be £4m, absolute minimum, in line with the presentation around the open offer. As you say, with March revenue of £1.5m, you'd hope for more than £4m but of course rates of scrappage are also important here as they are what led to the rapid cash burn in late '23 and early '24. Best of luck with your new investment.

Sorry, that last bit should have read: I sincerely hope this isn't a prelude to lower than £4M Q2 revenue being reported. The insinuation is that it won't be, but my faith is thin right now.

I'm afraid the RNS this morning raises more questions than it answers. Most obviously:

'The Company's impairment assessment of its tangible assets has identified that a particular furnace was not performing to contracted specification. Furthermore, despite considerable engineering review with the supplier, the Board does not now believe a cost-effective solution to improve the performance of this one particular furnace, can be made'. OK, and so the resolution with the supplier is what? And the impact of that resolution is likely to be what over what period? Sounds as though the furnace needs replacing by the supplier but that could be months.

'This change will not impact cash, and whilst not yet agreed is expected to transfer approximately £2.0m in total from FY23 and prior periods into future years'. OK, so if this practice of recognising development revenues in line with work performed is not good practice and relates top 2023 and prior periods, why was it not picked up in prior audits?

'The poor performance of this furnace is not impacting current output due to better than planned output from a complementary furnace together with some outsourcing'. OK, so the very clear correlation between installed capacity and revenue growth is not as clear as we were led to believe? Because if one isn't working we've got another one and we can outsource some?! I'm being slightly flippant on this one but you take the point.

I sincerely hope this isn't a prelude to lower than £4

Thanks for sharing - I'm glad you did.

Out of interest fevertree, if you feel comfortable sharing, did you participate in the open offer?

Thanks fevertree, in terms of naivety I meant lack of judgement rather than lack of experience. Either they showed a lack of judgement (naivety) in sticking to unrealistic revenue forecasts or they showed a lack of judgement (naivety) in terms of how much that would come back to bite them. I'm absolutely willing to give Maddocks the benefit of the doubt because she seems to be a decent communicator, but I am disappointed that she didn't immediately upon arrival put a marker down and refuse to put her untainted name to the numbers. She had an opportunity and either she chose not to take it or was suppressed. I always found Michael Cunningham to be unimpressive, but perhaps I was unfair and perhaps his discomfort around the numbers meant that he decided to or was invited to leave.

As you know, I have a lot of respect for what Bundred/Johnson have built, from almost nothing, but in the past couple of years they have undone some of that. I'm pleased Bundred is leaving and it's right that he does so. I'm more forgiving of Johnson than you are and still believe he's the right person to lead SCE but he can't afford any more mis-steps.

For anybody who does their proper homework and decides this is worth a punt, nobody should try to talk you out of it because it's your money and your decision. But I would beseech anybody thinking about making an investment not to do so just because some stranger on a forum has made some positive remarks (and has therefore probably not done much homework here).

takeachance1, as for Block 6, are you aware that everything you say has been true for several years, during which time there have been numerous false dawns and zero progress?

Thanks chasbrown, I appreciate you taking the time to respond. Any concerns about the pension deficit and have there been many communications about how and over what period they are seeking to address this, as clearly this would be a big factor for any potential suitor?

Schrodinger, I have every sympathy with what you're saying but the issue for me is this: Having had a CEO/BOD who were waxing lyrical about their strategy, how they provided a great alternative to the challenging capital markets, diversification of the portfolio, etc, we now have a CEO/BOD who are warning us about the perils of going it alone, with all the permitting and the operational risk factors and the challenging capital markets and the meh and the meh and the meh (all self-serving rhetoric of course). But which BOD do you want to believe? Now they've essentially shown their hand and said "yeah, this might not be such a great idea guys, let's take the deal", why would you want to leave your hard-earned with such fickle, mealy-mouthed individuals?

I haven't sold my holding yet because I'm just trying to assess whether there might possibly be a better offer coming but I see there are a bunch of additional 8.3 disclosures today which I've not had a look at yet but which is no doubt more IIs throwing their weight behind the deal.

This is 80% about execution of a complex manufacturing process at scale and 20% about much better forecasting and expectation management. They can be forgiven for the former - this stuff is hard. The latter is much harder to forgive - they have been naive in the extreme, disingenuous and lacked humility at key moments (Bundred in particular).

The lower end of their guidance HAS to hold weight. That revised guidance was their 'coming clean' communication and the market will have little to no tolerance for anything less.

The next Trading Update is due early July (which will be mid-year). They've said £4M revenue for Q2 and said it as recently as when we were already well into Q2 so it absolutely must be £4M. If it's not, I'd suggest things could get pretty ugly as it would be an immediate let-down on a final chance.

To answer your original question moneymule, SCE was valued at around £70M-£80M market cap two or three years ago and that was prior to quite a high proportion of the £390M contracts being announced. Self evidently, there is a very high level of empirical risk built into the SP and MC based on management's inability to manufacture at required scale to date and therefore the cash burn and multiple raises that have decimated the holdings of LTH's such as myself. If - and it remains a big if - they can deliver to the sorts of metrics in the latest presentation then market cap should easily get back up to those sorts of levels but it might take 24 months of solid, issue-free delivery for confidence to be restored to that degree, I would suggest.

£70M market cap would be c.5.5p SP. In reality, without the problems of the last two years and bearing in mind some of the larger contracts have been announced during that time, plus the prospect of more contracts to come, this already ought to be £100M market cap. But as I say, there remain high levels of risk built in. I personally decided to increase my % shareholding via the recent open offer but I had also previously participated at 40p, 10p and also prices a little above 40p so I've been hurt by this. Others, as you can see from Fevertree's ongoing anger, wouldn't part with another penny and I respect that.

Looking to potentially add this to my portfolio. Have read a number of RNS's, particularly more recent ones, but would be grateful for a balanced synopsis from somebody who has been keeping eyes on this for longer. What are the key pros and cons? What are the key upcoming events to be aware of? Has recent strong growth in share price eroded the attraction of entry at this time? Grateful for the narrative as you see it. Thanks.