Member Info for Hexam

@beta - Nice analysis and I think you're pretty much spot on. In terms of the cost savings I would have thought they should be visible in the numbers now but it's also likely they were at least partly in the Q4 numbers too. Also the $50-$75m is stated as being "partly offset by cost inflation (payroll and energy costs)". So not sure there will be too much additional upside from this. I also don't think it can be assumed the strong trend in concessions per visitor is necessarily continuing although the recent amc quarterly numbers suggest it may be.

Nonetheless I totally agree though - if US Box Office does do close to another $600m this month (seems possible though challenging) and if there have been no one-off hits on cash we don't know about then the Free Cash Flow for the last three months viewed as a quarter should be positive and at least as good as it was in Q4 21. And May of course on its own will be significantly cash positive. Very encouraging!

"Yes it’s a concern that profits will be eaten into the lower Btc goes" - It's not just the falling value of what they're mining that hits the bottom line but the fall in value of HODL also feeds directly into profits. Up to the end of April it looks like total losses are approaching £20m (£12m from the monthly reported figures plus £1m-£2m per month in other expenses). And that's before the sharp fall in BTC this month.

If BTC doesn't turnaround soon they'll be reporting a big loss in the interim results no matter how cheap the electricity is or efficient the intel chips are.

Of course it can all change in the blink of an eye and those that understand and accept Crypto volatility won't be too concerned but wider sentiment won't be helped if we post a sizeable loss at half-year.

So hopefully BTC will get its act together over the next 7 weeks.

Thanks Mountainous. It would indeed be great if they could pay down the 65% required to avoid the test but can't say I'm confident as I think they're some way behind their base case at the moment - too much ground to make up after the first four months even though May is looking a lot healthier and June should be good as well.

I think they'll get the waiver and it looks like May should comfortably be cash positive and hopefully the following months will be as well (though August is looking a little light at the moment). So come the end of the year (and even more so next year) I feel they'll be in a much better position to deal with covenants and whatever the courts throw at them.

@mountainous - pretty sure the next covenant test on the RCF is June - unless it has already been waived for that date and I’ve missed it? If they haven’t got one already then with admissions improving I don’t see them having a problem obtaining one (think it’s just coming a bit too soon for them to be able to pay down enough to avoid the need).

"Literally only argo is down and all other stocks are RIPPING"

Thankfully that post didn't age well, hopefully this one ages better :-)

What makes you think the appeal is going to be lost imminently? Everything I've seen (including from CINE themselves) suggests that if it goes that far it won't be until well into next year. By then either box office will have recovered enough such that they are back to generating significant cash and able to deal with any judgement or it will be clear that it won't ever recover in which case they're doomed anyway. I firmly believe it will recover though assuming the number of films being released gets close to pre-pandemic levels as clearly the audience is still there if they have the product to see.

I agree the resolution should pass (it's pretty standard for a company to maintain this kind of option) but impossible to see a buy back actually happening in the near future. Might help shareholders a bit but does nothing for the company other than spending cash they don't have going spare and probably upsetting their lenders.

One for the future perhaps but when did CINE ever 'make a little over a billion'?

For me it's largely because of the things you assume which aren't in fact correct. I'm investing in ARB because I believe its profits (and hence eventually its sp) will continue to go up faster than BTC and by enough to offset the impact of any dilution - it is not totally correlated with BTC value and can quite easily (and often has) moved in the opposite direction. To me investing in BTC is just a gamble but if a miner gets its act together it will do well even if BTC is struggling a bit. Of course it still has strong links with BTC and if the latter really tanks then ARB will tank even faster and like you say there are added risks (as well as the added potential upsides). In time ARB should also diversify away from just mining to add more profit potential (but also more risk).

There's also the bonus that you can hold ARB in an ISA or SIPP but not BTC.

That's right, the loss for April is due to the fall in BTC and the impact this has on HODL (including on the coins mined in the month between when they are mined and the end of the month).

So profit/loss for April reads:

Profits from mining = £3.8m
Deduct Impact from drop in BTC (and BTC equivalent) of £15.3m
and Less Depreciation of £1.3m

Gives 'Gross Loss' of £12.8m

Note this is not the total loss before tax as the above doesn't include all the other costs such as staff wages, consultancy, interest etc. Total loss including these is probably a bit over £14m for April.

Just highlights the volatility of profits but there should be positive months later this year as BTC hopefully recovers (so what they have 'written down' this month will be 'written back up' in later months and then some).

"The only variable is the bitcoin price"

Simply not true. It's important but ultimately all miners are businesses and they will stand or fall depending on many things not just the price of the commodity in question.

"I'm not a trader" - I wouldn't call this trading though. Just choose an interim target, say £4 and sell, say 25%. You bank profits and the worst that can happen is that you miss further growth above £4 but if the price retraces to say £3 you can buy the same shares back more cheaply and still be left with a profit.

Trading anyway is less risky than holding long-term as the downside risk is the same but the sell targets are lower so more likely to be achieved. I'm not talking about day-trading of course - that's a whole different ball game- or any other trading where you might need the money sooner.

What you're doing sounds far more risky to me but as always people should choose whatever approach that makes them most comfortable.

"Yes I think £8 is probably my target. But I'll see what the price is when BTC is in the 150/180 region - might be less, might be more."

Will you be top slicing along the way though? As well as banking profits this gives the opportunity to buy back lower if it retraces so much less risk but doesn't necessarily mean overall a lower return. Or are you an all-or-nothing kind of guy? Must admit that would be too risky for me so I'll be top-slicing as we go (assuming we do go)!

I don’t think it is obvious at all. A favourable court case settlement would be very welcome but I reckon the sustained and growing profitability of getting revenues much closer to pre-pandemic levels would arguably have more impact on sp.

I agree the movie slate is strong in terms of headliners but it is weak in terms of the number of next tier films and I can’t really agree that the results are ‘encouraging’ when they are clearly so far short of their own base case.

Thinks are improving though, just not as quickly as CINE themselves hoped for due to the shortage of releases.

"With a current p/e of something like 1.7 I think we can safely assume that 23p isn’t this shares normal level."

I agree with much of what you say, especially the drag on the sp from falling out of the FTSE 250, but I think you are reading too much into the low p/e ratio as this is distorted by the very large, net one-offs in the last year. Their adjusted PBT is £93.5m so after tax this would give a ratio of around 5 or 6. Still pretty low though and points to decent value for the share along with many of the other points you make.

I think they're the same actually. Box Office Mojo includes Thursday previews in its Friday number whereas I suspect Wiki gives each day separately. So $90m for Thus/Fri and still Sat and Sun to go.

There were lots of ‘50p guys’ (Dr Long springs to mind) so it doesn’t narrow it down much.

“you remember when i said 50 pence here?“

How on earth do you expect us to remember when you wrote it under a different profile that you can’t even remember?

Priceless.

“it’s costing miners to mine BTC over $25,000 a bit coin, how do you figure it will drop to $20,000????“

That may be true for most miners on an all-in cost basis but most of those costs are fixed. The additional costs of mining an extra coin is probably closer to $10k for a lot of miners (for ARB it was less than this in 2021).

So most miners would not prefer to buy rather than mine if BTC dropped to $20k.

Couldn’t agree more - just felt too risky. Still, time I think this one comes out of the bottom drawer :-)

“back to 20p??“

I doubt it, but if it does then I’ll just buy a bit more. I bought some close to this level recently to average down a bit. If it goes back down there I’ll buy again but this time with the hope of getting a quick 40% or so like some lucky souls have recently. If it takes a bit longer to go back up then so be it but my only risk would be if it keeps on falling but hard to see this given the recent financials unless there is surprise, and significant, bad news.