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HUT8 appear to have nearly $250m of cash/HODL at mid year although this is in CAD so about 200m USD of which about $50m is cash. So it looks like they can HODL for quite a while longer even though their costs are relatively high and even if BTC falls again - BUT it depends on how much capex is coming up imminently which I don’t know. An equity raise may also be possible of course for any longer term growth plans they might have. Could be other reasons too why chunky amounts of cash may be needed (loan repayment due etc) but I haven’t looked and may be unexpected anyway.

Correction to earlier post is that loss in USD is $25m but would have been a lot worse if not for some warranty adjustments which were significant. So another reason to be careful when comparing results.

Although ARB’s results will look particularly bad because of their treatment of HODL revaluation I don’t think they would (or maybe even could) sit on the results for the sake of some possible good news.

Hut8 show a half-year loss of $32m. ARB is likely to be around double that but it is important to bear in mind that, as far as profit goes, different companies have different methods of treating changes in the value of HODL due to changes in value of BTC.

The way ARB do it (currently) is to count all gains as profit and therefore all losses will also count against profit. I have not yet come across any other company that does this. The ones I have looked at all hold back at least some of the gains when BTC goes up and so don't include them in profits immediately. This means they don't suffer so much if BTC goes back down on those assets.

In short ARB will tend to look better than other companies when BTC goes up and worse when it goes down (as it has done significantly in the first half of 2022).

There are lots of other reasons why it is difficult to compare companies but this is likely to be the biggest one I think whilst BTC is so volatile and for ARB means that the results will look worse than they really are in comparison to other miners.

Should also point out that depreciation starts when the asset comes into use and begins benefitting the company so my example is oversimplified in this (and a few other respects) but hope it's useful.

Capex is never included immediately in earnings for any company.

In net income (i.e. profit before tax) it comes through as depreciation over several years depending on the nature of the asset and its expected useful life. So earnings in later years (including a bit in the first year year) will be reduced.

For EBITDA depreciation (D) is specifically excluded so capex spend doesn't affect it directly at all.

Cash flow though will be impacted in full by the capex as soon as it occurs.

So for example suppose Boo incur £100m capex halfway through 2022 and spread this over 5 years (a guess). Then the reduction in each measure will be:

PBT - 2022 £10m, 2023-2026 £20m, 2027 £10m (total £100m spread over 5 years)
EBITDA - Zero all years
Cash - 2022 £100m

"So it's all fully accounted for, and L5 the market screener says Boo will be EBITDA positive in H1"

That is misleading if you are suggesting this means cash flow will be positive? Since:

1) EBITDA makes no allowance for any capex at all so this all needs to be deducted and it is expected to be over £100m (i.e. more than wiping out the EBITDA figure estimated for 2022)
2) It also does not allow for interest (and tax but that should be zero)
3) It does not allow for fluctuations in required working capital from changes in stock etc. than can increase or reduce cash demands. This may be positive as they are tightening up on inventories
4) The £101m EBITDA is just an estimate anyway

My own best guess based on what they've told us is that 2023 will be broadly breakeven in cash terms but it could go either way and will further fluctuate during the year due to timing. Hence the RCF is a very good thing as it makes sure enough cash is always to hand as they can dip into it if they need to or not if they don't.

"This is an over reaction now"

I don't see how that can be said with any conviction as 1) the auditors have raised concerns (bad as it indicates the company doesn't know what it's doing) and 2) that these could have a material impact on reported 2022 profits (obviously bad).

However, it looks like all the adjustments affect non-cash items (hence the expected unchanged net debt position) and 2023 guidance is unchanged. The second one though is hard to take on trust since they have seemingly messed up 2022's reporting so much.

In short any decision now (buy, hold or sell) looks to me like a gamblers toss of a coin until more is known. So good luck whatever you call.

Yes, there are some childish extremes that tend to hog the board (not uncommon) but also plenty of sensible and knowledgeable posters in between too. So thanks to those - and less so to the 'naughty boys'...

Yes, the results will be interesting although the loss itself will probably be around £40m-£50m (unless there are some big, unexpected one-offs included) as they tell us most of the numbers each month. It's only the overheads, which are quite stable, and any technical items that are missing (including the impact of Pluto and exchange rate impact). It looked from the last update that they may be spreading machine costs over 5 years not 3 years and that will help the result by a few million but it depends from when any such change takes place.

What I think will be really interesting is the strength of the balance sheet and in particular the cash position and whether they give enough clues in the commentary that would allow us to have a reasonable stab about how much of the first 200mW is already funded - or can be funded from existing cash/HODL.

And then of course there's argo labs...

Finally there is the question of when the results will come out. Last year was Aug 9th but in 2020 they were a month later and they still haven't issued an RNS giving notice of the results. So any time in the next month but not this week?

I think that is not a good year to pick for obvious reasons. But you could have picked 2019 or 2017 or 2014....

Whatever.

Crude oil price is an important factor but it's not the only one. No company is defined solely by just one of its costs however key that particular cost is and for CCL fuel has been less than 10% of the cost base for the last three years and 13% at the half-year - so going up and an unwelcome drag on profitability but still a relatively small part of the overall cost base. Then there's revenue and all the things which affect that.

"Bloody shorter. Playing the polite long part when actually they want cpi dropped. It ain't happening bruv."

I believe in CPI and its future and this is one of the companies that I'm invested in that I feel most confident about. I just don't believe in some of the posters on this board.

It was an ok update I thought although a little confusing and a tad misleading in the way it was presented - but I'm expecting a much better one next time as the turnaround continues and we hopefully see a healthy profit.

So if the comment was aimed at me it was completely made up - and wide of the mark.

@FrayaBentos - Refreshingly sensible post on a board that is often drowning in nonsense from the overzealous few (on both sides). Thank you :)

cheers :)

To be fair what you speculated was "Would they like to buy Capita outright too?"

To which the answer is no for the reason that Watsoccuring gave which seemed a very sensible and appropriate reply to the question posed.

The cost of living crisis thankfully doesn't seem to be holding back UK bookings yet - ahead of 2019:

"The UK remains our most advanced market in terms of bookings with cumulative volumes remaining well
ahead of Summer 2019 at + 5%".

"Winter 2022/23 bookings are currently at a very early stage, with only the UK market currently booked as
usual at this point of time. The UK have started positively with volumes up 16% compared to the same stage of
Winter 2018/19 with the programme c.27% sold. "

I think the results are encouraging but I'd hardly call a loss of 331m 'break-even'. Good progress on debt though helped by the cash raise and positive cash flow.

I can't figure it out either. If you shrink the business by selling parts of it the revenue clearly will reduce because of the lost revenue from those parts sold. Whether overall the revenue decreases depends on whether any increase in the revenue of the business that remains is enough to offset the loss from the business sold. In H1 it was not. Instead the overall revenue dropped by just over £100m.

However, what is key is whether the business left is in a better shape, smaller but leaner and more profitable, and how this grows in the future. I'm hopeful and although the H1 results showed a little promise it should become much clearer with the next set of results or two.

So opinion perhaps but fact no.

@SavvyInvestor - It is tricky comparing historic values because of dilutions but one thing to bear in mind is that, as you say, an equity raise adds cash to the balance sheet but this should means mcap should actually go up in theory (by the amount of the cash raised) rather, than as you suggest, stay the same. This sounds odd but consider an extreme example. If a company with an mcap of £1m raises £10m of cash via an equity raise its mcap clearly wouldn't stay at £1m.

Similarly if the raise is at the prevailing share price then the sp should not change as the number of shares increases in line with the mcap. The reason the share price generally falls in this situation is that the new shares are usually sold at a discount and sometimes quite a heavy discount.

Of course sentiment also plays it part and the increase in mcap in line with the amount of the cash raised implicitly assumes that the earning per share will remain unchanged i.e. the earnings go up in line with the additional mcap because of the use made of the additional money (so the £1m company I used as an example would be expected to increase earnings by 11 times by making as good use of the additional £10m than of the original £1m).

However, for companies seen as bailing themselves out sentiment often drags the sp down further than any discount implies but for growth companies (like in my example) it can actually go up by more. Each situation is different though and the opposite can happen in each case.

There are other complications e.g. share buybacks like CCL have been doing work the other way. In addition the CCL position is complicated further by the separate listings in the US and UK which don't always move in the same way.

Sorry for the lengthy and rather dull post but thought it might help if you are trying to look at historic values but also with the dual-listing and buybacks it is also far more difficult to do with CCL.

One other point is that some charts that are published do actually adjust historic sp for dilutions (i.e. adjusting for the impact of discounts) - e.g. google charts I believe, but I'm not sure it works for CCL so well because of its added complications?

I keep challenging you as you keep posting stuff that is so easy to challenge and that I think ought to be as it's often so misleading in my view. But I shall stop wasting my time as I'm sure people can read what you post and make their own mind up - they don't need me chipping in. And if trying to get at some substance and coherent logic behind your statements has made me look stupid to you or others then so be it.