We spoke to gas explorer and developer Sound Energy. Here are the latest updates from Executive Chairman Graham Lyon. Watch the full video here.
I am very surprised by the reaction to the annual report and the exec team remuneration. A few comments:
1. The total salary is a culmination of previous years' arrears that have now been paid out with the receipt of the EU grant. There was c£100k thereabouts which is for 2018, 2019 and 2020. So that's about 30k for each year. That's hardly unreasonable.
2. The bonus is for a period of 2 and a half years including the whole of 2021. What's wrong with that? The team have pulled the company out of annihilation into a revenue generating entity.
3. It's a pity that memory is so short-lived. Till Nov 2019, revenues were ZERO for God knows how long. Now we are averaging 1.50MM every month with a phenomenal opportunity to break into tens of millions with just a couple of contracts coming through. If anyone thinks these contracts drop like quail and manna from heaven, then that's a very sad reflection of one's perception of reality. This has been hard earned involving thousands of manhours (and woman hours) of effort, grit and perseverance, all with the knowledge that if things don't go right, the exec team will be on the hook. There is risk on both sides. Let's recognise that.
4. I am amused by this constant need for information. It's like we need to be constantly fed information to have interest. Do we really think that multi million pound contracts and licences come to fruition in days? Even if the team are pushing hard, we are dealing with multinationals and governments who take their own sweet time and, frankly, don't give a damn about shareholder sentiment.
5. Do we need JW to be on social media or put his head down and push on with the business? There was a two and a half hour marathon session in November. The last time I checked, that was two and a half months ago. Since then, we have had a fund raise, the annual report and 2 meetings. I honestly think we should cut some slack and let him get on with his job. History has shown that when JW goes a bit silent, something on the back burner is coming to fruition.
Patience from us and perseverance from the team. I think that is a good combination.
I do not think metrics such as a percentage of market cap or that of the annual loss are correct in this context. We are a growth company. The biggest risk taken is by the executive team, reputationally and career-wise. I fully agree that we as shareholders have money at risk but the executive team have both money and their careers at risk. When you look at the bonuses, it is effectively a bonus for two and a half years with a lock-in caveat. To my mind, the BoD have played their cards very well.
We are paying for experience, vision, drive and a passion to succeed. This is a rare combination. Yes, time will tell if this was the right move, but all indications point to it being the correct decision. The world is in a bizarre place at the moment, but I strongly believe that we are in very good hands. My support for JW and his team is stronger, more than ever.
I have now gone through the annual report with a fine-toothed comb. That was my morning research along with breakfast. It is a very good report with a clearly defined strategy. The fact that JW and team laid out this strategy early on and have pursued it successfully thus far gives me a lot of confidence. The company is fully aligned with the future, i.e., ship building, renewables, cruise etc. and I can only see more growth and a bigger PnL in due course.
Of course, we would all like to see a much bigger PnL and a profitable one. But I do believe that the past two years have been spent laying down the foundations for a solid business. Had it not been for Covid-19, I do believe that we would have seen bigger numbers. I am aware of so many clients across different industries who are waiting and watching. This holding pattern is common across the board and Infa is in the same situation. The holding pattern will break, and when it does, this company will flourish.
Directors' remuneration is always a sore point. We need to change our mindset. Good people command a price in the market because they know how to add value. To take the company from zero, build a £1.50 million revenue line in the middle of Covid-19, and then to run with that kind of monthly average is highly commendable. I disagree with comments from fellow shareholders about the "Appalling remuneration". The Board has effectively locked in the management team for two and a half years and the expectation is for them to deliver the turnaround strategy this year. And I believe that they will.
The reality is that no one is here for charity. We want a healthy return on our investment and the management team can deliver it for us. They need to be compensated and recognised for the hard work that they are putting in and the sheer skill in navigating through these difficult times. They have stuck with the strategy, built a portfolio of contracts and getting on with the job of delivering to shareholders.
Great quality is not easy to find. AIM is littered with lifestyle companies. Infa is not a lifestyle company. This is a serious business with a serious BoD who are driven and keen to succeed. And that mindset matters.
I have no problems with the remuneration structure and I believe that is was a very smart move by the BoD to lock in the executive directors. Well played.
The reinforced base is a massive concrete reinforcement that provides load out capacity, fabrication capability and storage of extremely heavy equipment.
If you were dealing with an 800 tonne - 1,000 tonne wind farm structure, the storage area would collapse under its weight without concrete reinforcement.
Why do you say that Tango?
The ML is only a small part of the project that has frankly been blow way out of proportion. There is the EPC element, grid tie-in, reversal, tariffs across the Interconnector (both forward flow and reverse), entry into and exit from the gas network and a plethora of other commercial agreements to be negotiated and executed.
If JW and team are focussed on acquiring the ML, I am sure the new project manager is not sitting on his hocks. Given his background he would have been around the block a few times so knows exactly what next steps need to be undertaken.
I don't think any of these activities are worthy of an RNS - but work still goes on.
I fully agree with the comments.
My simple mind works as follows: On the assumption that H&W were to get a sub-contract of as low as 10% of the value, that's £120 million. That's for the fabrication work. Top that with the physical capability to assemble the ships which only Belfast has plus sea trials and final delivery.
I dare not presume anything or put any numbers against these incremental items but the potential is staggering. Right time, right place, right team and right strategy. Indeed, all to play for.
I was reading with a lot of interest the analysis of the FSS programme as provided below:
This is effectively now a two horse race between Team UK and Team Resolute. When I look at the build and the parties involved in more detail, it occurs to me that even if Team UK were to win the tender, they just do not have a capacity to build these vessels with both Bab**** and BAE tied up to their eyeballs with the T31 and T26 programmes respectively.
My sense is that regardless of who wins the tender, there will be a substantial amount of work that will be sub-contracted to H&W, both in Belfast and Appledore. These are the only two yards that have the physical size and fabrication capability to deliver these vessels on time and on budget.
The award might come in only next year but I do firmly believe that H&W are now firmly embedded in this contract.
Being a shareholder and having followed the fortunes of this stock for a long time, I am sometimes dismayed by the credit that is given to Danawinner for allegedly turning the fortunes around of this company. Some key facts:
1. He engineered a board coup of a company of which he hadn't the faintest idea of what to do with
2. He installed himself and his coterie in June 2017 and departed in October 2018
3. His net contribution to Infa was zero, except for humiliating the previous board
What did he achieve for nearly a year and a half at the helm?
Completion of FEED - NO
Financing - NO
Marine Licence - NO
Offtake agreement - NO
Strengthening of the balance sheet with hard assets - NO
Lots of bluster and BS - YES
he effectively left Infa in a state of complete mess and disarray only for JW and the team to pick up the pieces, put them together and make some sense of this company. If Infa were under his watch today, it would have probably been non-existent.
Let us give credit where credit is due: JW for pulling the company back from the brink, JT for her sheer perseverance with DAERA and NI bureaucracy and the overall team for having the courage to come together, back JW and create something meaningful.
In the meantime, Danawinner re-assembles his coterie, who are equally unqualified, trying to poach another company, again, about which he has not the faintest clue what to do with.
We, as shareholders, probably got lucky and got away with the misadventures of Danawinner. I do feel for the shareholders of Primorus. They can pretty much kiss goodbye to any hope of a turnaround or change of fortunes with Danawinner in their camp.
I think you answered your own question Tango1.
There are ways and means and JW is doing exactly that. The fact that Stena have put out a press release doesn't mean that Harland need to respond to everything. It all depends on the nature of the contract and the decision of the Nomad on its materiality for announcement purposes.
My sense is that Harland will be bidding for smaller contracts to start with to de-risk the operations and ramp up gradually.
Reading all of your posts, may I offer the following comments:
1. Remember the time JW set milestones and people ridiculed him for making RNS announcements against those milestones? It seems to be the case that damned if he does, and damned if he doesn't.
2. Civil servants are slow in the best of times and with COVID-19, we are arguably in the worst possible phase to move things along. I have no doubt JW and JT will be deploying every trick in the book but some things are beyond their control. That's life.
3. The fact that JW is trying to reach out to all of us is being taken negatively. Even is he wants to issue an RNS by way of an update, the NOMAD could very well block it if he/she deems it to be non-material
4. Regarding contracts etc. at Harland, why would JW want to publicise his contracts, the negotiations and the clientele to the whole world? We are not the only ones watching, there are competitors watching his every move so why should he give out commercially sensitive information?
5. JW already gave a lot of information in the Placing circular. The financial year has come to an end and the team must be getting the audit and annual report organised. A lot of information will be disclosed in the annual report.
What is the tearing need an urgency to get information when literally 2 weeks ago we had a Placing circular?
Let JW get on with the business, focus on value creation and we will all be fine. Patience and calm are dirty words these days but that is exactly what is required.
We don't live in interesting times. We live in bizarre times. Despite all the doom and gloom surrounding us, Infa is still here and standing. Let's give some credit where it is due.
It is very interesting that these issues are being raked up especially on matters that occurred 13 years ago. As Spud correctly pointed out, this has been fully disclosed at the time of JW's appointment.
I do believe these posters are acting disingenuously. Quite frankly, their posts should not even be dignified with a response.
Quite right BlairPeach,
The bulk of the placing is at the GM.
Dawski: We won't have the opportunity to attend the Gam in person. It will be done through proxy voting and electronic voting prior to the GM.
One of the downsides of the current social restrictions I suppose.
I spent the day reading the RNS and the circular and was reflecting on this Placing. Any dilution hurts all existing shareholders and JW and team are also shareholders so they too have been affected. So we are all in the same boat.
The fact that the Board has raised £9MM in this environment and at a sensible discount tells me that the IIs like the business and can see the vision of the management team. The fact that Harland has been open for business through the worst of the pandemic is admirable and clearly demonstrates JW and team mean serious business. It is a fantastic optic for clients who will appreciate the perseverence.
I posted a news article from Splash a couple of weeks ago which said the ship repair market is going to explore in Q3 and Q4 with rates doubling. We can see that happening now, hence the requirement for additional working capital becomes totally relevant.
Harland has three Viking vessels moored and there is more business out there. This is effectively downtime for cruise operators which they will most certainly utilise for repairs and refurbishments. We don't have to go looking for business. It is already in the yard!
Spud's comment on IM on the back burner is not correct. Harland is generating cash. The company needs to be generating revenues and so the focus to keep that momentum is fully justified. Even with the best will in the world, IM revenue generation is 3 years away. So naturally the focus has to be on current revenues and the ability to stand on our own two feet. I fully support the strategy.
I have posted through the technical docs for the marine licence and there is nothing in it that I believe is controversial. The science stacks up. The fact that DAERA are slow in moving things is something completely beyond JW's control. I am sure he and JT are really pushing hard, but there are limits. I am convinced that the ML will come through but it is a matter of process. I can only hope the NI ministers realise the economic potential of this project and speed things up. In this economic climate, that's the least that they should be doing.
I do believe that this placing will unlock a lot of value for the company. As much as all of us now detest the word "patience", that is what we need to have over the course of the next 12 months.
Ultimately, the reality is that we are all invested in a complex business that takes time to come to fruition. JW and team are probably one of the most efficient management teams I have seen in many years; highly skilled, deeply motivated and highly strategic thinkers.
Now more than ever they need our full support and backing. I shall be voting in favour of all the resolutions.
Very interesting article from Splash247.
The ship repairs market is going to be red-hot going into the Q3 and Q4 of this year. This plays beautifully into H&W's sweet spot. I am very confident that this company is going to go places!