Member Info for DRB83

Johnny seems to be stuck on pause from 2021. Sort it out

Yes for sure Angs will use what they can in terms of the tax incentives but pre tax profits are huge currently in the O&G sector and Angs won't be able to reduce tax to zero. If they end with an effective tax rate of 20% in 2023 I will be very impressed. 65% is a hefty amount. Your previous calc was assuming total costs Inc operating, admin and tax were less than £2.5m. Admin costs alone will exceed £2.5m in 2022.

Tony,

Start with Price/ Earnings
Earnings are what is attributable to shareholders. Basically the bottom line. After tax. Price is the mcap.

I have provided many calculations on here over the last week to support a 4-6p valuation based on what we know currently.

You appear to think I'm negative but all I am being is realistic. It's not me posting numbers trying to justify 26p based purely on revenue using a industry pe ratio. It's just wrong. Especially when tax is 65%.

Using Tonys logic. Kist should be worth £7.5bn. current EV £350m. I'm just advising that his pe calc is wrong. Just trying to help.

Again, 2-3 bags is not negative Hamster.

I currently have negative views on Ncyt.

I don't think saying 2-3 bags from here can be misconstrued as negative but I guess if your comparing my expectations to your own 12 bags expectations then yes I'm Uber negative in your world. I prefer to call it realistic.

You don't genuinely believe that Angs will only generate £2.5m costs pa, actually it sounds like you believe it will be easily less than that. Using a pe ratio is fair enough but your calcs and industry benchmarks are massively flawed. Isn't the point of these boards to pull people up when they are spouting nonsense.

Just noticed the Tony post captured 6 recommends. Wow. No wonder PI's are so easily manipulated. Come on guys.

Jeez Tony. You say at the bottom

(*Excludes ongoing costs and revenue from Oil)

Well you've actually excluded all costs, every single one. Pe is profit not revenue.

I'd also like some examples of 10-20 pes in the industry if you can please.

Keep up Johnny

Is it a case of looking at the fine detail Mira.

Did RT say he would leave for good or did he say he would just leave. Technically a big difference similar to a loop hole in a binding contract. We all leave the board every day but then return the day after. Depending on what RT said then he has already kept his promise and now he's back. I don't know, I wasn't here at the time.

Profit is one thing but we all know that cash is king and that is paramount for any small upcoming business. Cash looks stable.

We started the year with £1.8m and took £4m from the mezzanine loan. So £5.8m to play with.

I believe the business will be self funding in the FY22 accounts.

Assuming the £19m revenue generates £11m gross deduct about £9m for admin expenses (exc D&A as non cash) and £0.6m in finance charges then we have £1.4m net cash generated within the year.

So that's £7.2m cash but we paid for Glanaco £0.5m. We'll also have to pay back £1.5m of the £4m this year so we end the year on £5.2m. We will need to pay back the other £2.5m of the loan by March 23 so that leaves us with £2.7m and hopefully we'll be self funding on a monthly basis by H1 2023.

This is obviously all dependant on how we can manage the working capital. Trade receivables increased massively in FY21 from £1m to £4.7m. You'd expect that as revenue grows but it's important the credit control team don't let that number become too big as a % of revenue. FY20 was 22% to FY21 52%. So with the right working capital management Dvrg may not need to dip into the mezzanine again and therefore save about £600k in finance charges.

It's looking good. Let's see what H2 has to offer.

Oooohh kaaayy. Moving swiftly on.

Jaffy, I think my point was quite clear.
Howey, lol

£7bn mcap = £2.66
£70bn mcap = £26.60

I can go on. What point are we trying to make?

Lol. I know quite a lot about cash flow forecasts so what your saying is that you've forgot more than quite a lot. I guess that explains it then. Lol. Oh dear. Have a good one. Stateside spit & go? Lol. It's easy playing personal insult tennis with someone who thinks your someone else. I'm having little digs at you (because you're a troll and insult people all of the time) whilst your insulting someone else thinking it's me. I can't lose. It's great.

Me too.

I don't want you working on anymore conundrums Tramp until you've figured out the cashflow forecast one. It's a really important tool for an investor especially with small caps and should be your priority. Keep me posted

Lokiloo, it depends on many moving parts but based on 2 wells, 2 compressors and 2 side tracks and a gas price between £2.50-3 I'd say 4-6p. 6p based on sentiment and 4p based on fair value.

If GL comes in and puts the cash to good use then I would review at that time. If gas prices rocket to £7 then obviously I'd review, if Truss decides I'm going to sting O&G companies again then I'd review but based on what we know now 4-6p over the next 12 months seems fair.

A few counter points.

You can't have your cake and eat it. You either extract cash from the business via dividends or you reinvest it to take advantage of the huge tax incentives. With the current tax of 65%, dividends are the least efficient use for FCF therefore I would not be expecting any significant dividends anytime soon.

Also, prior tax losses can not be used to offset the 25% windfall tax.

NPV surely has to be the best way to truly value an asset. You could have £100bn of gas underground but if it takes one company 100 years to extract Vs another company who could extract it in 10 years then clearly the latter would be worth much more. It's going to take at least 5 years for Angs to deplete those 300m reserves so when considering extractions costs, admin charges for 5 years, high tax costs and a high discount factor due to high inflation then the 300m therms you have underground today will probably net you less than £250m cash (at today's value).

Talks of 10p+ need to be flagged as ultimately it will lead to a very volatile share here when people realise it isn't going to get near it anytime soon.

Realistically 4-6p imo but that's still 2-3 bags from here. I don't understand all the wild 10 bags speculation based on fresh air. 2-3 bags is a great return, just be happy with it.

Jaydees, based on those numbers I'm remortgaging back to 95% LTV and putting it all in Angs. Seriously though, you need to re check your calcs