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The tip is on the basis that there is a valuation disconnect. What poor advice from investors chronical, your supposed to buy winners. They are basically advocating bottom picking. There is no reason for the valuation to improve here. They have it on a forward PE of 7 which sounds high (expensive) as well. If I was advising I would say go for BP, you'll sleep better.
Correction, this is after the placing:
As part of the Placing, First Equity Limited ("First Equity"), an existing Shareholder, has agreed to subscribe for 11,000,000 Placing Shares pursuant to the Placing at the Placing Price. Following Admission, First Equity will have an interest in 29,000,000 Ordinary Shares,
Https://www.londonstockexchange.com/news-article/CMH/holding-s-in-company/16284009
Armstrong Investments Limited - up to 16.726727%
Note this is before the placing shares are admitted.
Great news.
I looked at the broker note, it was a like a compilation of 3 similar companies shall we say. There is only a page on each. My understanding is that these type of notes are really a mouth piece for the CFO of the company, so no analyses from broker. We already know the aspiration, now we have to wait and see if it can be achieved. It would be nice to hear some more detail on the contracts mentioned recently, perhaps an interview or RNS reach might cheer us all up.
The trouble is this type of investment needs an exit, and there isnt one. No II interest to soak up shares, so the price drops after each event. Many events have been disappointing, and to be honest you are spoilt for choice on AIM with speculative companies like this. The execution which is 'ok' at best is not a compelling factor, the hit and miss geology is becoming less attractive, and all in an environment where real quality is for sale on the same market at knock down prices and valuations. Any spike is going to be sold heavy here.
Wow:
Over the course of the year, as the Group foresaw a reduction in productive workload, it made the decision to reduce the operational working week and to enable the retention of key skilled operatives, ran its own in-house furlough scheme, paying up to 70% of normal basic pay for non-worked time for those operatives that were affected. However, as the year ran on it became apparent that a permanent reduction in direct labour numbers was required. In September 2023, the Group entered into a redundancy process and made 14 employees redundant prior to the year end, with ten of those leaving under voluntary acceptance. The cost of this exercise to the business was over £0.1m and is classified as exceptional due to it being an infrequent occurrence.
Trevor Brown holds 35,421,915 Ordinary Shares representing 25.70 per cent. of the Company's issued share capital. Trevor Brown has agreed to subscribe for 3,550,000 Subscription Shares pursuant to the Subscription at the Placing Price. Following Admission, Trevor Brown will have an interest in 45,571,915 Ordinary Shares representing 25.41 per cent. of the Enlarged Share Capital.
So this has cost him £71k to retain the (almost) same stake in the company. I think unless you increase your stake in a placing you have not averaged down. I plan to try to calculate the cost of his holding. I would hazard a guess that it is at least 5p/share. He has also seen the value of his 25% crash today just like the rest of us. He must be about 50% under water at least. I know how it feels Trev! I was also here at 5p.
Yeah, I did the maths. For the mcap to remain the same, the placing should have been 2.3p.
However, that isnt usually how placings work. In the good times, this would have been a much smaller discount. The argument being that the EV has increased due to the cash achieved from the raise.
I still think Trevor will exit this with a profit or a MBO. So for me, having been here over 2 years the only option is to follow him. I have managed to increase my stake (he remained the same). I bought a few times today, and one of my buys was the 1.994. Im pretty fed up with this saga though I have to say. I think the price was low, and it is concerning that 830k might not be enough cash again - although the previous placing was for only £330k and it lasted nearly a year . A higher price could of achieved a little more cash. I am surprised that TB did not increase his stake, in that case he has not really averaged down. Should we be wary or excited about this? I always thought if we had a placing here it would be for TB to reduce his average and go to 29%, but in actual fact the cost of his 25% has now increased again by £71k.
I will be interested to see who bought the shares, or rather who is likely to keep them. Recall Miton sold around 2.5p, was this insightful trading from Gervaise? Does he get them back at a 20% discount.
My last point is that I would like to see the board really commit to RDC. To do this they should sell Petrel, and use the cash to erase all debts and deficits, and invest in capacity etc. One day when this is taken out, its going to get broken up anyway. It might even achieve a better multiple as a single focus company in the mean time.
It cut my message off.
Less than 3% (dont write that with a less than symbol).
Dowgate wealth are also buyers here. I really enjoyed this video where he talks about EKF (and many other interesting stocks). His comments re a buy out here too. I linked to the EKF chapter but worth a listen to it all. He also mentioned PMI which is yielding around 9% per anum, so you are paid to wait for a recovery there, where as we have had the booty here.
https://youtu.be/DXfrakc20cs?t=2641
Might add to EKF in SIPP if it falls below 30. Im sure it will re rate soon, but on news. I think EKF is probably fair price currently.
SB, the securities lending is for them. Their voting rights are 518374 extra due to them borrowing stock.
Usually in this situation they are going to sell (some of their 12%) and hedge the drop by a CFD or similar.
It is probably lion trust selling I would say. They are 'doing a Dartron' (LOL) and taking needed gains to deploy elsewhere.
Just like Dartron they still have exposure here. Mine is in my SIPP. I sold my income holding to buy PMI as you probably know from Twitter, that goes ex dividend next week.
I think the rise could be another buyer, who has not had to report (
I am not sure I can see a buy out at these levels, if Dbay themselves paid £1.50 per share for their stake, and their previous offer of £1.50 for a take over was declined. Any take over would need the consent of both Dbay and the founders agreeing. I cant see either agreeing to lower, and I cant see DBay paying that sort of valuation now. I bought in today and am happy to hold in my pension until this gets concluded, but im not sure it will be soon. Any one have any thoughts on this?
I agree with you Christo. Anybody who thinks this stock has done well, is deluded. Those trapped in here for 2024 will have to take a positive view, the rest of us can try to make our fortunes elsewhere. 12 months ago they raised money at 54.4p to bring Cascadura online, so in 12 months have created no value in the share price, only a few trading opportunities. There is very low institutional ownership (~10%), so please everyone stop the talk of take overs. Most professional investors can see this for what it is. Paul Baay has zero credibility, and the company seems unsuccessful in most of its endeavours.
In terms of opportunity for 2024 among AIM stocks, this has to rank in the lowest 25%.
Dec 2023 PB quote:
"The Fundraise allows us to accelerate certain aspects of our exploration and development strategy while we focus resources on bringing Cascadura onto production."
Why would you want to take such a gamble. The company owes over £20M at 8.3%. How long will it take to repay the debt? 5 years? Meanwhile there is unlikely to be any acquisitive growth, or much organic growth. What exactly would you be investing in? Only hope here is a take over, but given this type of business has little assets, it may be easier to just poach the people. Singer is predicting 4M Ebitda for 23, and 6M for 24, but you have to factor in the debt which is makes the enterprise valuation here 35M, so EV/Ebit is rather high = 8.75. I wouldnt touch this, but valuation wise it probably needs to half again to be appealing?
You also have a lot of Institutions who will probably dump this for above reasons, so expect valuation to be further depressed. Rosenblatt must curse the day he met Nichola.
Reading through, it sounds bad.
- decision has been taken to write off £1.8m of debtors and work in progress...restatement of the 2022 accounts.
- Costs relating to employment cases under the previous leadership team have been incurred (principally in the second half) totalling £1.9m.
- In addition, a further c. £0.2m was incurred during H2 in the run-down of another ABA.
So that is £4M down the drain before we start to look at the poor results, and lack current business.
Memery Crystal, has been impacted by the lack of activity in both Commercial Real Estate and Equity Capital Markets with transactions that were forecast in Q4 2023 either being delayed
Who would have thought that property and capital markets would be slowing down!
They had Net debt of £21.0m in June, so I would expect the recent facility to be close to maxed out - I am surprised they even managed to obtain it. I honestly think this is done for. One less legal on AIM wont be missed.