Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
"Their constant negativity is never backed up with genuine evidence."
That's an odd statement but rather apt as absolutely nothing from the company itself is backed up with genuine evidence and this is the main point of disbelievers like me.
“Gone are the days of solo mining at $77,000 electric costs and an overall cost around $244,000..... Crazy......”
The $244k referred to the overall reward (due to the extremely high transaction fees) NOT the overall cost.
Also of course the big miners like MARA, CLSK etc don’t have electricity costs anything near $77k per BTC mined - more like $25k (and much, much lower whilst transaction fees are so high).
"What I've said is that it's a viable business at the operational level"
Disagree I'm afraid as to be a viable business at the operating level it's got to be making enough money on that basis to at least cover its interest and lease obligations which sit outside that figure. Fair enough you can exclude D&A from this as that money has already been spent but that doesn't hold forever as at some point the assets will need replacing for the business to continue to remain viable.
"Hexam thanks for your view, I'm not sure I buy it but each to their own and it's good to have a civilised debate"
Agreed but the depreciation and amortisation point I'm making is not really a view, it's simply a fact of how it works. This will continue rise for BOO unless the company starts to contract and I'm assuming you don't think that's very likely? Even then there will be a lag before it starts to fall (unless there are a lot of immediate write-offs).
So you will see it increasing this year and next year etc. just as it has in previous years.
"Hexam, it's quite simple I'm looking at the day to day actual running costs of the business, which remains profitable."
The profits on that basis still have to cover the impact of any investments (via D&A), interest, lease costs and any exceptional costs. So I wouldn't see being profitable on that basis as anything to shout about but as the very minimum it should be achieving. To achieve overall and sustainable profitability and positive cash flows its got to be making significant profits on that basis.
"I'm interested in why you think depreciation and amortisation will continually rise."
I said it will rise for the foreseeable future, not continually. Just the way it works really. The only way it will decrease is if the business starts to shrink and even then it will take time to feed through.
They depreciate/amortise over various timescales between 3 and 50 years - depending on the assets and their perceived useful lifetimes. As BOO is still relatively young those assets are still building up (especially over the last few years) so the amount to depreciate/amortise continues to accumulate even if the capex etc. then begins to fall. It's only when the end of the D or A time period is reached for an asset that it stops contributing towards the annual charge - but unless the business starts to contract that asset should be replaced and it all starts over. Of course if it turns out to be a poor asset investment then it may be impaired earlier - but again if that leads to an overall drop it implies a failing and/or shrinking business.
So any business that is relatively young or is still growing will see D&A grow as it's fixed asset base etc. increases. Even if it reaches maturity the D&A should still rise as the assets that need periodically replacing will cost more each time they do because of inflation.
Naturally some assets may prove useful beyond their initial estimate so they don't need replacing when the D or A schedule ends but BOO was growing rapidly until only very recently so that is not going to be a major influence for them anytime soon.
In short D and A continues to rise for healthy businesses (and more so if they are still growing) because of the accumulative nature of the charge and the increasing costs of replacing assets - even though capex etc. may vary considerably from year to year or even fall for several years.
Still don't get you as depreciation and amortisation will continue to rise each year for the foreseeable future and operating costs are higher than operating revenue - hence the reported operating loss of £21m. They do in places also show operating costs excluding D&A (maybe you mean this) but it is a fairly meaningless number and if they can't cover these with revenue then that really would be alarming!
If anything the figures flatter BOO - HOWEVER they are taking action to improve profitability and this may start to feed through in the year end results.
Not sure of the point you are making as depreciation and amortisation is used in order to give a fairer view of profit - if it wasn't done that way the profit line would look even worse. The cash figure is directly affected by capex but there would have been a net outflow even without any capex and only a small net inflow if you excluded the EBT share purchase as well. So even if the capex had not been elevated (just 'normal') and there were no share purchases then there would still have been a net cash outflow.
They also made an operating loss of £21m so they are not currently profitable at the operating level - maybe you are referring to adjusted EBITDA (?) but that is a different thing to operating P/L and excludes all manner of costs.
I would hope though that they've reached the bottom as far as profitability goes and the FY results will see a change in direction with losses starting to reduce and a clear path back to profits even if the headlines themselves aren't great.
"as in the business is fundamentally massively profitable other than boohoos intent on buying DCs etc?"
Not sure how you work that out. BOO made a loss at half-year and it still would have been a loss with no DC purchases. It is not fundamentally profitable at the moment, let alone massively, which is a big factor in why the sp is where it is just now.
Hopefully the full year results will show clear signs of a route back to profitability with progress on improving margins, in particular from cost savings and possibly pricing too.
"I'll stick with 10% until we know any better"
Fair enough though personally I'd be surprised if KM and, in particular, Debs have not performed much better than a 10% drop this year which is what you are implying if you think core brands in total have fallen by 10% (as per interims) and that PLT and the BOO brands are at least as good as this. I would have though Debs are nailed on to have actually increased revenue and perhaps KM too? This would mean the other core brands would need have fallen by more than 10% to offset them and give an overall 10% core brand reduction.
Can't believe I'm more optimistic on Debs and KM than you - and who claims I never say anything positive :-)
"Boohoo and PLt will make up the vast majority of the revenue from the PRECOVID brands. The others have been deprioritised."
Exactly - it is basically these two companies that make up most of the like-for-like comparison.
"Boohoo and PLt are part of the five core brands going forward and the half year results stated that revenue in these was down 10%. So why are you assuming a 15% fall."
Because it is the other core brands that have been shoring the numbers up with KM and Debs growing fast versus BOO and PLT declining. I'd be very surprised if BOO and PLT do not perform below that of the group as a whole.
I agree that the overall number is more important, I was just responding to the aggressively made challenge to me about like-for-like sales not being anywhere near as low as pre-covid levels. I have now answered that fully, with evidence, so hopefully now the debate can move on.
In the year before Covid (to end Feb 2020) BOO received revenue of £1.22bn from the companies that were part of the BOOHOO group for at least the most part of that year (PLT, MissPap, Nasty Gal and BOOHOO itself).
To the end of 2023 those same (i.e. like-for-like) companies did £1.43bn in revenue.
So if sales in FY 2024 for those companies fall by 15% they will be back below pre-Covid levels. This is well within the guidance for the fall in total revenue that BOO has set so my conclusion js that on a like-for-like basis revenue is likely to be back to pre-covid levels or there or thereabouts (obviously depending on where exactly they land in guidance and how the pre-covid companies do relative to that).
Happy to discuss the above if anybody thinks I've got the numbers wrong or that my logic is flawed. If though you just want to deflect and talk about inflation, what other posters are saying about eachother or where you all go on holiday etc. then not really interested. In the absence of any proper challenges though I hope this finally puts this particular topic to bed.
"So far though I'm the only person he has requested to leave him alone which I take as a win."
Another twist of the truth. If I wanted anybody to leave me alone I'd just filter them. Easy. I just don't engage with you much as it's painful conversing with someone who doesn't understand what they are talking about and constantly moves the goalposts to try and disguise that fact. At least T4G is a bit more clued up...but still just as twisty.
Just more spurious information. However much you bombard the board with stats and references to suggest how it’s all going so swimmingly for BOO the actual numbers that count (revenue, profits and cash) seem to suggest otherwise and unless there is a major surprise in the year end results it looks like it’s going to stay that way for now.
So you can point to market stats, site visits or whatever - but none of it seems to be feeding through to BOO’s performance, not yet at least.
Therefore I can only conclude that all the things put forward by you and others over the last few years as positive indicators are in fact largely irrelevant ones or, if they are relevant, they are ones that BOO simply haven’t been able to take advantage of so far.
The results don’t lie.
It's all very well banging on about similarweb but unless those site visits translate to revenue and then to profits then it doesn't matter how good they are. If BOO are doing so well on these stats then they don't seem a very reliable lead indicator given where they are predicting revenue to be to the end of February. Of course the more recent stats won't show up much in the year end results (and the most recent not at all) but I seem to remember good figures on similarweb being quoted for quite some time now.
It's the revenue (and profit) that counts and at the moment BOO are projecting a 7 to 17% drop for the six months to the end of February versus last year compared to an 18% drop for ASOS - which would therefore be better but not exactly knocking it out of the park. ASOS's results were poor in my view (despite the obvious progress on inventory and hence improvement in cash flow temporarily) and I suspect/hope BOO's will be a bit better especially on margins and profits (as well as revenue - though not on cash flow as they benefitted from their big inventory reduction in the previous year)...but not long to wait now to find out for sure.
"I said ‘estimated’."
Fair enough, but there are good estimates and bad estimates and yours is a pretty bad one. But it matters little either way and the key thing here is not the timing of the halving but whether QBT really have anything that can take advantage of it. Maybe in a few weeks or months we'll find out one way or the other but my 'estimate' is that we won't hear anything soon and when we do it won't be good.