Member Info for Hexam

As Blubay says, it should be no surprise that a country taxes BTC in the same was as it taxes other income or, as an asset, for capital gains - and that is the approach the UK takes for example.

The surprising thing about the India tax is that instead of doing this they appear to have applied the tax rules they use for gambling. I don't know what impact the 30% rate has on gambling activity in India but in the greater scheme of things I don't think this news is of much significance one way or the other.

You can't open more than one stocks and shares ISA in the SAME tax year, otherwise it's ok.

Herdie - I wouldn’t take it too much as a show of confidence. BLOK is a fund not an institution, that’s Amplify, and they run the BLOK fund which is made up of many crypto assets including most of the main miners. For example Arb is just over 2% of this fund currently - but it holds more in MARA, RIOT, HIVE, HUT, BITF and CORE.

It was certainly a vote of confidence getting selected in the fund in the first place but unless they increase significantly the share it holds in ARB in relation to the other miners any new money/disinvestment just reflects the popularity of the fund as a whole with retail investors.

Yep, with his seeming track record I'm suddenly very bullish on argo now that he's disinvested. Just glad I'm not in Riot :)

@Herdie - hopefully we’ll get some announcements soon to put some flesh on those ‘ifs and buts’. In the meantime for this year only the 20,000 plus the swaps are ‘certain’ so personally I’m not counting any more chickens than these.

@Herdie - Argo have said it is 20,000 new machines initially for Texas. Do you have any other expectations for this year (apart from the ones from the swap arrangement which are 'new for old')?

Cheers Capitalizer, no problem - they are not exactly the easiest set of accounts to decipher.

Personally though I don't think it is a sleight of hand including these gains in profit as you could argue that they have 'earned' that income by building up the value of these businesses to be more than they were valued on the balance sheet and they are just recognising that. Besides it's just similar to the way impairments are treated but in the other direction i.e. when an asset on the balance sheet is reduced in value or written-off this is recognised as a loss in the P&L - and Capita had some of these too in 2021.

In my view they are profitable now as once you strip away all the one-offs (gains on disposals, impairments and the rest) they have just under £100m profit before tax as shown in their 'adjusted profit'- and as @sharehead has just mentioned. This is encouraging and will hopefully grow further in 2022 and beyond.

@Cesna - Very much agree with you which I why I said in my earlier post that I believe the company is on the right track and that its true ongoing profitability can soon match its reported profitability (which at the moment is distorted by the gains on disposal).

CPI's business and accounts are more complex, and have more 'things going on', than most so I do think its key to try to not get carried away with headline numbers and understand more what's going on beneath it all. However, I do think the adjusted PBT figure is a reasonable measure and as you say this is heading in the right direction (and I believe will keep doing so with the actions they've taken). GLA

@Capitalizer - I'm sorry but you are wrong there. The profits on disposals are clearly stated in the profit breakdrown in the accounts.

The unadjusted PBT for 2021 is £285.6m.

This is comprised of:

Operating Loss = £(86.6)m
Net Finance Expense (mainly interest) = £(46.9)m
Gain on Business Disposal = £419.7m
Other = £(0.6)m

All the numbers above are straight from the report.

The reason the disposals show up in profit is that the proceeds of the sale exceed the value previously held on the balance sheet.

A better reflection of ongoing profitability is from the adjusted profit figure they give which removes all one-offs and this is £93.5m as it not only removes the gains on disposals but excludes the sizable restructuring costs.

Any selling related to the ftse 250 demotion, at least as far as the trackers go, should be over by now (otherwise the trackers are not matched to the indices and so not fulfilling their mandate). So hopefully CPI can push on from here, though saying that with a p/e ratio of 8.5 suggests an sp of £1.12 is misleading as presumably this just takes the reported net profit figure (£224m). However, this includes a huge one-off profit from disposals of over £400m without which the business is still loss making.

I'm confident the business is on the right track and can achieve that sort of level of annual profits in the near future but that isn't the current true position.

If it's the Anthony Coyle incident being referred to then he reported from his conversation with Seb, Alex and Tom Divine that testing showed a 25% uplift and potentially quite a bit more - but this was then refuted in the subsequent 'apology' from argo:

"Mr. Coyle wrote that Argo claimed a 25% uplift in hash-rate resulting from the use of immersion cooling technology. Argo does not have sufficient data to make such a claim, and did not claim this. Argo did reiterate prior public statements that immersion technology can allow mining machines to run at greater sustained processing speeds and can extend the lives of older machines that are, or are becoming, no longer profitable using conventional air-cooling technology, which in both cases could significantly improve machine profitability and return on investment."

I think the market does care about earnings but it is more about the prospect for future earnings than today's - and that's where the increasing hashrate comes in, and lots of other things of course.

@Blubay - which targets are you referring to? The only published targets I can think of are hashrate targets - the last of which for ARB was 1.7EH which they were late on (due to the replacement orders) and slightly short of (as still at 1.6EH). Not bad compared to some but would hardly say that they met their targets.

Or are you talking about something else completely?

AB - I don't disagree. I believe they have one of the best mining margins (top 5 at least and probably top 3) if this is defined in terms of all mining related costs compared to revenues mined. Efficiency may be a different matter (e.g. looking at revenue per hash rate or in terms of revenue vs overall costs) given the still relatively old average age of their machines and recent poor BTC numbers (due to bad weather etc.) - but efficiency should bounce back with the further new machines and Texas.

All I'm saying is that the way they present their margins is misleading and makes them out to be even better than they are and some/many people get sucked in to this (and leads to some quite ridiculous ramping and projections). Their margins are great anyway without them trying to make them look even better.

True AB - but I'm talking about company actuals. They are far more circumspect looking forward for fear of undershooting.

As to Corz hash being market misleading then I would say that ARB's mining margin, and in particular their 'best in class' claim is even more so. I agree that others twist their margins too but none so much as ARB as they exclude more than anybody else. As I said, fair play to them - the number of people on this board alone that refer to these high margins means its working and all companies play the same game.

"The rest is hosted by them, not owned by them, it's misleading."

AB - You're right, it is, but all companies promote their numbers in the best possible light and present them in a favourable way that is perhaps sometimes a bit disingenuous. ARB are no different - for example they publish a very high mining margin each month and keep claiming it's best in class but I've yet to find another company that calculates it the way they do (i.e. that excludes the cost of the miners). I don't blame ARB for that - it's all part of the game - and since so many fall for the spin it's easy to understand why companies do it.

LSE ‘buys’ vs ‘sells’ are just as unreliable as the spreads (and the two things are connected I think).

Also if there were really that many more buys than sells today then I would have thought the sp would have gone up - not down.

Ignore the spread given here - it's nothing like that.

HHH81 - All I'm saying is the cost of debt is relatively small so I can't see how a change in interest rate will do too much damage to its bottom line. I agree that debt has been an issue for Capita but I think that's more in terms of the ability to pay it back when necessary (and impact on ability to pay dividends) and the general stigma and uncertainty of having too much debt on the balance sheet. The interest payments themselves are not that onerous - unless you think £25m is a lot in relation to the rest of the financials?

"Capita is VERY sensitive to interest rate outlook because of the debt."

Really don't think that's true. From what I can see the total interest expense on loans and overdrafts charged to profits in 2021 was less than £25m. Hardly a big number in comparison to revenue or even to typical levels of profit. Inflation probably much more of a worry.