Member Info for DevonLad7

The recent results RNS actually states how it will be funded (out of increased Dutch revenues), so any speculation about using the entire cash pile is likely very largely incorrect:

As a result of the excellent cash flow received from the Netherlands this year, we decided to move forward with legacy decommissioning activities that are required to be carried out in the UKCS. Completing this work will position Parkmead well ahead of its next phase of growth, with no major abandonment liabilities going forward. Decommissioning provisions for the period were £19.2m (2021: £0.4m). The Group is also capitalising on lower costs, agreed before the significant inflation in the offshore market.

You cannot simply say that last years cash balance is offset by future decommissioning work, as it’s 21/22 cash and 22/23 spend (apples and oranges)……
22/23 and future year revenues will probably largely fund the decommissioning work (with maybe some cash at bank). So cash asset should be largely intact and decommissioning should also have limited PnL impact as largely provisioned over last few years.

Hi MRC,
If the business is generating €9m in revenues from Netherlands every 4 months then why can’t this be used to fund the decommissioning ?
There is no cash flow forecast to say the £19m will be spent in one year.
It’s my belief that costs will be brought forward from 1-12 years to 1-3 years because finally the company is generating decent revenues and these can be used so the cash at bank will remain relatively untouched.
TC is commercial and relatively savvy, so he isn’t going to go from a position of financial prudence with £23m in cash to almost zero in one year.
Time will tell - next interims.
That’s my view anyway
Best

Hi All,
I can’t say I really like this company at all - but I have built a decent position as I do believe it is probably undervalued at the current share price.
I’m now invested in more than I should be and a sizeable % hoping that we see better days ahead.
The management should be ashamed of themselves at the very least and possibly corrupt in the worst scenario.
- Badly managed
- Always pushing better EBITDA guidance
- Conflicted with their LTIP
- Not profitable
- Greedy and only appear to be working for their own benefit

I am hoping for a turnaround story here, starting with
- New management
- Clear path to net profit
- LTIP aligned with shareholders

It’s not a bad business, it just looks like badly managed and clear conflicts of interest which have been unearthed during the audit. The last fund raising should probably be investigated by the FCA.

Saying that I am just hopeful that the worst is priced in and some better days ahead. It’s trading at NAV so it’s up to the company to prove it is worth more than the intangible goodwill it is based on. Profits and net cash required for a rebuild of confidence here.

If there isn’t a RNS soon to conclude the audit then MJH should be ashamed even more.

Not compelling but I’m invested in the hope they do what is right and start to run this like a proper company and not a family business.

Hi All,

I’ve built a sizeable position here over the past few weeks and happy to sit and watch now. I’m a bit short of my target but don’t want to buy over 2/2.20 levels.
I like the management, turnaround, growing cash balances, sensible decision making and the level of management shareholding.
Pretty sure this share will rerate in time with improving financials, if corporate activity doesn’t come along first.
Bit annoyed that private investors were not included in the fund raising at 1.35p, they should have been given the opportunity, but I don’t believe that will happen again, as cash is good, RCF in place and I doubt Green brothers want further dilution.
Happy to be heavily invested here and excited to see where the company goes.

In answer to your question - why was this miles off ?

I think you have just misread the dates in the analysis. I believe the article is based on huge increases to revenue and profit in the 22/23 financial year - not the recently reported 21/22 year.

That’s my understanding
All the best

Hi all,
I’ve built up a decent position here over the past few days. I was a Dana investor so am hoping for something similar here in time.
I’ve also sent PMG IR a question regarding the decommissioning provisions (no answer yet). A £19m provision in the current period I believe is badly worded, hopefully they mean they have built up a £19m provision over several years and intend to start using it soon. While this will not affect the profit and loss account, due to the provision on the balance sheet, it will impact the bank balance and TC has been very cautious to keep that intact so I assume they will use the exceptional Dutch revenues (€9m in first 4 months), to fund this expense and hopefully keep the cash at bank relatively static.
I see value here at this level, several potential catalysts for the shares, just a question of timing hopefully.

Good luck all