Member Info for DRB83

MH, I did include positives in my previous posts. £1.7bn sales is a positive. Covenants extension is a positive. £119m cash generation is a huge positive. It's just overall, things aren't looking great when you look at the wider picture.

JDW made £100m gross profit off £1.7bn sales. That's less than 6%. If everything stays the same then for JDW to generate an additional £30m gross profit and breakeven next year they would need an additional £500m sales. So to breakeven they need £2.2bn of sales which is £400m more than there previous all time best. They need this in a market where cost of sales are going up and customers disposable income is going down. It's hard to be positive. I'm interested to hear the other side of the coin from the long term bulls.

BJ, well the SP has been in decline for many months so it will take more than a few days recovery to confirm whether the market has turned. The SP is now back to where it was just a few weeks ago. Has anything fundamentally changed in the business to warrant a change of direction in the SP over the long term. I can't see it myself but time will tell.

Steve, far from it. First called it around the £10 mark. A poster called Woody (aka Survivor) brought JDW to my attention. I reviewed the balance sheet back then and said this was on a very slippery slope with the debt and cash balance. The biggest concern now is it's going to take a record breaking revenue year to even have chance of turning a profit. 3 loss making years on the spin. Liquidity covenants tightened from £75m to £100m. CBILS £100m due back in less than 12 months. Nothing against Spoons but everything seems against them at the moment.

MH, agree but it usually helps when the business has strong underlying fundamentals. Sales figure was great so appetite is still there but it's becoming much more expensive for JDW to keep the lights on. Liquidity is going to be tested in the next 12 months, which means the covenants will be tested too. That's not a great feeling to have as a lth here. The performance over the last 3 years is not sustainable and there's numerous headwinds to come over the next 3 years. Can JDW really start to generate a positive cash flow without dipping into the credit facility?

A strong dollar is good for any UK company with significant dollar revenues. $80m dollar revenue when translated @ 1.3 is £61.5m. when translated at 1.1 it's £72.7m. For doing nothing we've just generated £11.2m extra pound which if we were a dividend company could go into our banks so we could spend it at the shops.

Investor basics.

I can't see any significant news coming out now until the end of November. 7 weeks. We'll probably range 10-20% until then imo

Kaeren, yep.

Government winning is good for Ncyt PI100. It means the contract between ncyt and DHSC is likely to be solid, so no risk of it being revoked. This changes nothing regards DHSC claim against Novacyt or our claim against them. It also means nothing in terms of timescales. It just means nothing as far as I'm concerned.

Our case is nothing to do with the GLP claim though. It just says that no corners were cut and the contract was offered correctly. This is not the issue for Ncyt. Our case is more about the finer details of the contract. The particulars. I'm not reading too much into the ABDX RNS at all.

Nuri, a £20m positive FCF is positive to be fair considering the last 2.5 years.

GL won't rule a placing out so naturally given GL is closer to the numbers than anyone here, yes a placing would be a concern but the placing price could be north of where the SP is today. Who knows.

I'm actually pleasantly surprised with the 2nd highest revenue total in JDW history. £119m in cash from operations helping to fund c£70m in growth of new assets. Loan covenant waiver extended by another 12 months. Liquidity still around £190m Vs covenant requirement of £100m. A nice £11m one off VAT refund also helps with cash. That's unfortunately where the good news stops imo.

Second best year on record in terms of revenue yet still required a £50m loan to support the business whilst making a £30m loss for the year.

Liquidity is reducing and with £100m due back to the government in Aug23 I can see some real pressure on that particular covenant. They may need to take another loan to pay the gov back but this I suspect will drop the overall credit facility back to £983m with debt potentially forecast to be in excess of £1bn. Clearly those 2 numbers don't fit so TM is likely going to need to do some grovelling very soon.

TM references the pent up demand after lockdown not materialising well it did hence the £1.7bn sales. That includes the pent up demand. Going into FY23 with the current economics JDW will do exceedingly well to even match £1.7bn. I suspect their forecasting tells them the same hence the selling down of pubs to help fund the working capital and covenants in FY23. Whilst JDW has more than enough scope to increase prices and margins, are the people going to want to pay those higher prices given energy bills, mortgage payments, rent payments, pretty much everything is going up by at least 10%. Except if course, benefits and wages which will no doubt lag behind reducing people's disposable income.

Overall, great to see JDW get back to almost pre pandemic levels in terms of revenue but I feel the effects on the balance sheet will weigh on JDW for several years to come. One to watch for me is the liquidity and what happens to it when the government come knocking. GLA

Noel, can you just start posting the good days please. We don't need to know about the bad ones. It will make the likes of not so BV, Asher and co much happier.

You do bring the average perceived age of this board down by several years 'not so balanced viewer' with your abusive insulting posts. It did start off a reasonable adult conversation but time to move on.

WG, I guess it's somewhat a moot point until we get actual figures in Feb23. Let's face it, 12 would be super but 10 would be great and 7 would be enough to make us money and provide the SP solid support at 3.5-4p.

If we do get to 12 then yes maybe the plant won't be able to sustain that flow but even a few months of 12 would generate a significant increase in revenue. The pressure will eventually fade on the 2 wells and sidetrack so it may be out of Angs hands anyway. Although a booster compressor will help keep the pressures higher for longer.

There's talks of a 2nd sidetrack which could potentially put the capacities of the wells at around 18mscf so GL clearly believes the compressor capacity can be made higher than 10 otherwise what's the point.

I think this might go up tomorrow. Threat of placing now known. 2.85 is a great price and where we closed today. Fully funded going forward. Shares in sticky hands so little forward selling. 2.85 may be the new floor.

WG, one compressor can clearly run around 5.7 and potentially be pushed to 6. The 2nd compressor is a clone so naturally the capacity doubles to 12. Maybe the 10 was conservative but now we know 6 is in sight based on actually production rates.

Surely you can see it is just a matter of time. We plan to be digging Han**** in 6 months. That either happens or it doesn't. If it does, you'll earn. If it doesn't, you'll have to wait for the next bus which in our case would be either EH, MM, or Brockman. Plenty of buses due at this bus stop.

SL, the key point was that funding would be required which doesn't rule out a placing and yes loans are certainly an option as I've previously mentioned.

Ivan's comment suggested there wouldn't be a placing in the near term. I am simply suggesting that is not necessarily the case.

2 things Ivan,

The reference to paying off debt may simply be in connection to the £1.5m obligation they had to pay in September. This was an obligation and not a choice.

2nd, GL himself said if the sidetrack overruns then a placing will be required. We'll find out in 8 weeks. That's pretty near future.