Member Info for Hazzy01

I agree - there will 100% be no money for shareholders.

My only difference is that administrators / receivers always get paid - they are generally higher in the list.

Supercharge has been consistently deluded over this share and has ramped it with nonsensical noise. I just hope his delusions have not impacted other potential shareholders who are now also wiped out.

Please be careful for all new prospective investors - this is a high risk investment

Couldn't care less if Supercharger is a canny investor or not - good luck to him with his own money.

The point is that Mr Supercharger ramps the shares at every opportunity, and has done for years - when was his first post to cross reference to the share price? My point here is that he makes statements that are either massively over optimistic or blatent factual mis-statements which might misleads other actual or potential shareholders. That isn't appropriate or fair which is why I have to keep correcting / providing balance to the nonsense that is spouted.

The post by Bondsman will no doubt be highlighted as a positive but the key point is that at the height of Southend's passenger numbers the sad truth is that it wasnt at the airport's breakeven point. Therefore the airport is not going to get back to pre pandemic in the next year and beyond, and pre pandemic passengers is not enough to save the business.

Southend will not get to / past break eve in time and it is a cash drain on the group - it's a sad but basic fact. Therefore will its cash drain bring down the rest of the Group before either it or the biomass division is sold?

I have highlighted in previous posts the challenges of selling the biomass division and I worked in this sector for the last twenty years so I have tried to be honest as to the potential pitfalls.

I have no interest in shorting the share as has been inferred - my only motivation is to ensure that there is some transparancy in what is a dire situation.

I don't share some of the negativity regarding the historic board - my personal view of Mr Tinkler was that he was a very shrewd businesman but he definitely wasn't a city man - hence why he surrounded himself with more city corporately acceptable individuals. Ultimately they turned on him after the Board became very airport rather than biomass focused.

The old Stobart business successfully dominated the new biomass sector by winning contracts by offering fixed price deals and liquidated damages clauses (due to their historic financial strength). It allowed the company to grow its biomass division well ahead of its expertise and ability but it was backed by a few really important shareholders who were very active in the biomass sector.

Ultimately the biomass division will be valued (as is any other business) on a multiple of its EBITDA. The difficulty is that a significant proprtion of Esken's volume is delivered through a range of connected companies, without which Esken would fail to execute. This is why the biomass business might not achieve the sales value people expect from seeing the headline earnings - the liquidated damages clauses are a massive risk to a prospective purchaser.

I am sure the break up value of the group might be greater than the current share price - but the headwinds are extremely strong and the basic problems are the unfriendly saviour of the bond provider plus the ticking time bomb.

Please be careful for all new pro

Another post of complete drivel and full of nonsense over facts.

There will be a standstill agreement - why ?

The lawyers insurers will have checked the contracts - utter rubbish - you are confusing the fact that lawyers have professional indemnity cover ....... not a load of insurance lawyers to check contracts

The standstill agreement will cause a two year delay and will be of benefit to Esken's cashflow - complete nonsense. You have no knowledge to make these statements which are no more than wishful speculation.

You seem to forget that when the bond was drawn up was when Esken was on the verge of collapse and getting the bond by hocking up the airport was Esken's lifeboat. Do you really think that is a scenario where the probability is that Esken will run out of cash that Carlylse would not draft the agreements in their favour.

As usual your statements are delusional, factually incorrect and need to be treated with a health warning.

The bond being triggered is not good news for Esken - it is very bad news which will have a negative impact on shareholders

Can't wait to see Supercharger's reaction to this .........

probably vindication of the long term future of the airport business and a great result.

I agree with your view that it looks like an attempt to take control on the cheap.

My recollection from a previous Esken presentation was that they thought Southend was worth £250 million so the bond / loan was circa 50% LTV. If that is the case the potential hit would be £125 million for shareholders although I think that valuation would be best case / not realistic based on current performance.

Did you notic the reference to the flight industry being at pre pandemic levels - as oppsed to London Southend being at pre pandemic levels.

It is without doubt another massive headwind for the company to navigate - as dispayed by the drop in the share price.

He doesn't get your drift Truthfactory because he just wants to ramp the share.

His ignorance on the subsidy regime is telling as is his knowledge on the biomass industry.

The fundamental question on biomass has alway been about it being net carbon neutral - the pro debate has always cited the argument that the carbon footprint is offset by planting new trees.

I do agree that burning waste (wood waste for biomass) is environmentally better than putting it into landfill.

However the carbon footprint of biomass is not great - the economics of transportation around the country is really poor - due to the fragmentation of the market.

We always asked a good question ...... "what is the difference in burning coal versus biomass"?

The answer is about a million years for the coal to be produced ..... but the CO2 impact is the same (if not worse for biomass due to the calorific value of the fuel).

Anyway - the biomass review will not impact the outcome for Esken - their possibilities or not will crystallise well before then - my guess is the next six months.

Another completely untrue statement which needs to be comprehensively de-bunked.

Irrespective of whether the oil price doubles or trebles there will be no increase (zero) in the demand for biomass in the UK.

All the UK plants have been built based on the ROC subsidy regime which is now closed. A biomass plant is not viable without these ROC subsidies and so there is no chance that any large new plant will be built.

If that was ever not the case, then the lead time of building a biomass plant including going through the planning requirements takes several years.

Furthermore the majority of the biomass plants that Esken supply are fuelled by recycled wood. The supply / demand equation in the UK is relatively balanced - circa 4 million tonnes is generated each year which is consumed by the biomass and panelboard industry. Therefore even if there was increased demand for biomass it cannot be serviced.

Finally the last myth to be corrected is the assumption that because the oil price has increased then biomass plants will suddenly pay more for biomass. This is complete nonsense.

The biomass plants have long term supply contracts with Esken which are annually indexed, mostly to RPI - therefore the oil price increasing is irrelevant.

The true scenario is that the increased oil price will significantly increase Esken's costs of haulage which are very significant. A full load of biomass fuel is between 20 - 25 tonnes (maximum) and haulage costs are probably the biggest single cost associated with the supply.

So the higher oil price will actually damage Esken in the short term as another significant inflationary cost pressure.

Sorry to be so forthright but your repeated attempts to mislead potential investors in this company is wrong and your false statements will be called out.

Why does the AGM coming soon mean there is good news - otherwise it would have been postponerd?

That is a nonsensical and ridiculous comment to make?

Esken is a PLC and has to operate by the rules of the Stock Market.

The upcoming AGM therefore does not imply good news or bad news - its a necessary requirement and your inference is another example of your blatant misrepresentation of facts on this platform.

Hi Truthfactory

Your comment on the previous biomass owners is interesting / insightful.

I don't know if it is well known but a large part of the Esken biomass supply chain is facilitated through a group of companies owned by Allan Jenkinson. Allan was / is a major shareholder in Stobarts (from the annual reports) and he was one of the key supporters of Mr Tinkler, within Stobarts, who was the ousted Managing Director.

I have always wondered how a buyer could view / value the biomass division when so much of the supply chain is effectively supplied through a connected third party. It makes it incredibly difficult to determine the real value compared to the risks which are significant.

Stobarts signed up to all the large biomass projects in the UK in the last ten years and they succeeded by doing two things that were not sensible, but differentiated themselves from other smaller biomass chain suppliers:-

1) offering fixed price deals (which is taking a significant risk on overall revenue as gate fees have significantly reduced in the last ten years)

2) agreeing to significant liquidated damages clauses for failure to supply individual contracts. These LD clauses can be up to £25 million per contract so Stobarts, now Esken, have liquidated liabilities which could crystallise in excess of £125 million.

These three points are the biggest impediment to Esken finding a buyer, in my opinion, as how can you pay value for a supply chain that is only circa 60% supplied by your own facilities and you are totally dependent on a third party to supply the contract volume to avoid falling foul of the liquidated damages.

This is why I think it will be a struggle to find a buyer for Esken.

It is not Esken's gift to give to water these LD clauses down.

Therefore a potential buyer would want to negotiate with Esken's biomass counterparties directly in order to try and water down the LD clauses - which are currently effectively worthless to the biomass plants (as Esken would have no ability to pay in its current financial position).

If the liquidated damages clauses could be watered down to eliminate the risk of buying the biomass business then indeed the most likely buyer might be the AW Jenkinson group who are effectively running the existing supply contracts anyway - both from their third party companies and by the fact that they are very large haulage subcontractors to the biomass / waste wood industry.

Its an interesting watch from the sidelines - but Ithink it is important that shareholders understand the position. The majority of my comments can bed validated by reference to the annual reports.

Best regards

Haz

Hi Supercharger

You still dont get it do you? The continued expansion of passenger numbers through Southend just increases their losses whilst they are below the break even point of 3 million passengers.

You keep portraying every new route as a success - when in reality it just increases the cash burn of the company.

You question why Southend isnt used more to ease up congestion in Heathrow / Gatwick / Luton ........... does the reality not finally strike home that Southend is a top up location and it is not the great white hope you believe it is.

You speculate that easyjet will buy it - but why would they and at what price.

This company is on the verge of collapse and the ownership of Southend is determined by the CarlyleGroup who have security for their bond. Stop trying to misinform other potential investors about how rosy everything is - it really isn't.

You a serial ramper of this share - obviously to protect your own investment, but delusion is not a great guide of the true reality - you should be more responsible as people might believe your hopeless optimism and send their good money after your obvious failed investment.

So - in the interest of balance I have a prediction that Esken will fail and investors will lose their money - please do not invest your hard earned money in this basket vase

Hi Supercharger

I admire your attitude to risk - its basically a race to sell the biomass division at a sufficient number to buy enough time to sell the Airport before the ongoing airport losses kill the business.

You are effectively banking on the sale number being big enough to get you 12p in a break up scenario.

However one point of risk you should consider is whether prospective buyers of the Energy Biomass Division would pay enough of a premium to make your desired outcome happen.

All Esken have to sell is the future recurring revenues of its Biomass Division which is circa £10 million EBITDA. However they are not going to survive for years and thus buyers might take the view that rather than pay a premium they should just wait for it to fall over and take over the contracts.

Another significant risk is that 500k of their 1.6 million tonnes sold is provided by a third party and that makes the potential sale of the Energy business much more complicated.

The other point to consider is that there are significant liquidated damages clauses in the biomass contracts. Esken, previous Stobart Biomass, only won those contracts because of their net worth - ie. their counterparty financial strength as the majority of its competitors then were relatively small waste businesses. The biomass plants will be looking very nervously at the weak counterparty strength now of Esken and could be in crisis management discussions as to how to de-risk their current unstable supply chain.

The biomass plants derive their revenue from selling Megawatts and generating ROCs - and they only get these if they are generating electricity and being supplied.

So my point in conclusion is that just because the Energy division is doing well with its EBITDA, don't assume a sale will be easy / forgone conclusion because there are other solutions that are much cheaper for potential suitors by waiting from the sidelines.

Its going to be an interesting watch - good luck, Haz

Hi Truthfactory - whats ESL and what is the relevance to Esken? Can you expand please

Thanks Haz

What was the breakeven number of passengers again?

Did you pick up on the payments to airlines point in the presentation - they are paying easyjet to fly from Southend so more passengers will just increase the cash burn.

Also Carlyle aren't going to convert their debt to 30% equity in London Southend - why would they when they can wait for Esken to run out of cash and basically take it all.

So the die is cast - Renewable Division to be sold with proceeds to be used to repay debt.

Renewables EBITDA is down which is disappointing

Aviation EBITDA is negative and more loss making

Balance sheet value is down from £70m to £30 million.

Once the renewables is sold (and the sales number becomes visible) then investors will have a clear view of the cash runway and based on the monthly cash burn this will determine the life left of the business.

The Aviation Division will continue to be loss making throughout the disposal process - another negative point I picked up on was that further capital investment is required if the airport was to get to 3 million passengers - therefore not sure it has infrastructure capable of getting to a break even position. Its probably a moot point when passenger numbers are only 89k and as this increases over time it will simply increase the losses of the Aviation Division.

It's really sad as I am not sure what they could have done any differently - the Airline being sold and then going out of business (meaning the lease liabilities returned to Esken) and then the pandemic have effectively completely stuffed the company and its shareholders.

My sympathy goes out to all the shareholders - lets hope the Renewable business delivers a good number.

Best regards Haz

Short on substance but as usual lots of general positive statements that dont stand up to scrutiny.

Share price rising strongly over two days - its gone up less than 1pence

Main shareholders are no mugs - no but they are all significantly underwater from the previous placings - for example the one at 40 pence - so the value of those investments at the time have gone by circa 88%

Many locals waiting for the additional routes to come back - they will be waiting for a long time and all routes are unprofitable for the airport as the number of passengers is below break even and will be for the forseeable future

Even Amazon might make a move - they did out of the airport

The govt are keen to help with tax incentives - there has been a budget but nothing targetted at Esken

You must be really significantly under water to keep making such rampish statements that have no bearing on facts or truth

No one doubts its ready to be open ......... that isn't the point.

The point is that the airlines dont want to use the airport.

Still blind hope is a better strategy than despair

Hi Birddog

Spot on with your analysis. The annual presentation said that they had three flight destinations from Easyjet for summer 2023 which is the same as they did in Summer 2022. This means that passenger numbers will stay around the 61k of 2022.

I find it very surprising that despite passenger numbers recovering close to pre pandemic levels the aviation sector have effectively abandoned Southend. At its peak I think it was doing 40 odd flights a week. In addition the freight deal with Amazon has stopped and isnt being repeated and so there is no likelihood of Southend recovering or stopping its heamorrage of cash.

It sort of feels that Southend is a great airport (and with good customer experience) but the airlines dont want to use it.

At this rate it will never get back to its breakeven 3 million passengers number and its going to drag the group down.

What's your view on what might be sold first - the airport or the biomass division?

Best regards

Haz

Hi Supercharger

You really are an optimist arent you?

Your posts made me chuckle about how you put fiction in front of fact - is that to push a position?

I haven't followed Esken for about a year - last time I was commenting was to correct misconceptions about biomass being a growth area due to the war in Ukraiane as opposed to the fact that it was going to make no impact whatsoever.

In fact I was incorrect - the demand for UK biomass stock going into European plants has spiralled upwards but all that does is have a negative impact on gate fees - which was acknowledged by the Esken board in the presentation of the annual results.

The most shocking point for me in recognising the demise of the company however was seeing the terms of the refinance

Libor has been replaced with Sonia (dont understand the subtlety) but the rate of interest is 9.875% above Sonia.

That means the interest burden on the company is circa 13% which reflects the banks view of the credit worthiness of the company.

Esken is a company in crisis - it has two alternative stratagies

1) sell the loss making airports division and pin its hope on the biomass division
2) sell the crown jewels (the biomass business which is EBITDA positive apparently to £22 million) and hope the sale proceeds are enough to support the basket case side of the business.

Its a very unenviable position and mostly not of their making the rubber band of the aircraft lease guarantees have been very painful.

I cant see an example as good as Esken of a good company absolutely screwed by a combination of circumstance and Covid.

But it certainly is not in a good place as your posts constantly try to portray to other potential investors.

Buyers beware - this is going to be a very rocky ride.

Potentially the opposite - I have provided a more detailed answer on another thread

Hi MHGH45

I just wanted to correct one misconception on your post.

I agree the Energy Division must be performing well - not least because I had concerns of a shortage of waste wood this winter and it hasnt happened - Esken's strategy of being absolutely full at the end of September has assisted in managing their supply chain challenges.

My point of dispute if where you imply that the move away from Russian gas is accelerating the shift to renewables of which Stobarts Energy will be caught up in. That isn't correct.

The impact of Russian gas (or oil) will have no impact on biomass in the UK from the perspective of more plants being built. The build time is 2-3 years minimum and the subsidy regime has expired - there will be no more wood biomass plants built in the UK - period.

Therefore Esken's supply potential is limited to its existing supply contracts (of which it is by far the market leader) plus any cannibilisation of other (non Esken) supply contracts. In short the best that it is doing is the best it is going to do !!

The potential negative is that the wood waste fueled biomass industry in Germany has been in steep decline over the last two years due to the expiry of their subsidies (unique to Germany and not linked to the UK in any way).

The Russain fuel questions impact mainly Germany and their over reliance on Russia, and so the unintended consequence is that the biomas facilities in Germany might be given an extension (of subsidies which underwrites their existence) and this might impact the demand for biomass imports into Germany from the UK market - thus potentially impacting the supply / demand balance in the UK - the point here is that only in the last year has the UK supply / demand equation been close to parity. (historically the UK had an excess of biomass which had to be exported to European markets).

Apologies for the long winded response but if European demand increases it means that in an excess of demand over supply (for UK biomass derived from wood waste) then gate fees for UK waste wood will reduce - therefore reducing Esken's gate fee receipts in the next twelve months.

Whatever happens - I'm just glad that Europe reduces its reliance on a barbaric supplier that has no consequence for humam morality and the independence of states to choose their future.

We live in very strange times - I hope things dont escalate into a much worse place.

Best regards