Member Info for Hounddog10

I think I have posted something similar. If the government does get its act together I think it will not be anytime soon. The threat I am beginning to worry more about is that as Trainline is, for the moment, largely UK orientated in its revenues and the government finances are looking so precarious if we have a major economic crash (IMF in etc) this could get hit hard.

Although I only use the trains sporadically I have used the Trainline app for quite a while now. Prior to that I used one of the ToC apps and was an early adopter. It often did not work at the gates - one train staff member at the gate once snarled at me “to get a normal ticket next time mate”. However, the kinks seemed to have been ironed out generally with the apps but definitely Trainline is way better than the ToC app I had. I have noticed recently in quite packed carriages that most people seem to use ticket apps and that it is quicker for the guard to check the tickets. They have some sort of mini device that scans the barcode.

One thing that I think we will see fairly shortly is the start of the closure of ticket offices to save costs. Shapps tried to close all ticket offices, which even I thought was rather extreme, but he caved to union pressure. Most will have to go though and are one of the easiest targets for cost savings as so few tickets are sold through them now. I would imagine not too much goes through the ticket machines either nowadays and they will be reasonably costly to maintain. So there will be a general push to go to the apps.

One important element is digital railcards which creates “stickiness” in terms of retaining customers. 20 million people are eligible and there are 7 million railcards. Trainline clearly see it as very important as in their last annual results they said this:

“Digital railcard customers up 16% to 2.7 million11; share of 16-30 railcard users at 45%”

It would also really help if Trainline was allowed to do Delay Repay which it seems they are getting closer to.

I think the fall is really down to the forward guidance being flat - only a very modest uptick in projected EBITDA. However, I think the market is missing the fact that International Consumer is projected to get to breakeven this year and Trainline Solutions is steadily growing. This means that the mix of the overall business is moving away from the UK retail part where the concern is that the nationalised GBR will hit that part of the business hard. I would guess that UK retail part of the business would be more like a third of overall revenue by 2027 when GBR is meant to launch a consolidated ticketing operation (which I think is very unlikely to get going by 2027, if at all). In other words a major concern hovering over this stock should be substantially diversified away.

Should have been “to know how much was NOT drawn down but I would hazard”.

Cash was £861k at the 2025 half year but that is not too far off a half year cash burn rate and of course if the business is picking up that would normally suck in cash. They have the £1.75m HSBC invoice discounting facility and there is not enough info in the half year to know how much was drawn down but I would hazard a guess about £0.5m which might be enough but is very tight. Looking at it a bit closer they might just squeak through but it would be very uncomfortable.

I think we went through this before but rather to my surprise the convertibles appear to be reverse convertibles. So SYM has the option to repay (which it can’t) or require conversion. The problem for SSER is, as you say, full conversion gets them into bid territory which they probably don’t want. Also, even if they did, I think the bid can be blocked if not attractive enough by the other shareholders if they either go down a scheme route (more normal) or contractual offer. Somerston would be very influential given their stake (c20%+) and under a scheme SSER have to get to 75% and SSER cannot vote its holding - plus almost half the shareholder base is retail, many of whom won’t get round to voting. Other shareholders could probably also collectively block. So SSER is not in an easy position and I suspect it is, as you say, another extension.

Rather brief. I get the impression they are very busy. Projects in Gulf and Indonesia seem to be going well. They are still doing support work in the Philippines so the prospect of future work there may still be an option albeit the politics to contend with. Kenya seems still a few months away from financing but they have already begun working with the client. Seem to have a lot of MDA enquiries but VSP not updated from £1.8bn - they probably will only do that at the next formal financial announcement. They are moving into land and air (drones) monitoring although it will take some time to configure the software. I am not very clear how any SRT monitoring of hostile drones will integrate with systems eg missiles, attack drones, lasers etc to shoot them down. I would have thought speed is of the essence. Perhaps that can be SRT’s next move - get into missiles, partner with the Ukrainians, Israelis etc ….. Mr Tucker says he sees SRT positioning itself now as a defence company.

A few hundred Nexus units sold (although I thought the back orders were 5,000). Seems to be going down well with customers and they have said they will take it slowly. A good deal of interest apparently in the inland waterways side of the transceiver side of the business.

Seem to have a lot of interest in people working for them although I do wonder if they can pay enough.

They will certainly need more cash. A surprising omission from the RNS was a statement of their cash/net debt position.

I suppose there is some good news in that they seem to be in profit in 2026 and revenue and margins are going up. However, note they are writing off almost all of their capitalised R&D and investments. Investments is mainly the India “JV”. These adjustments have probably been forced on them by the auditors and would indicate that there is not much hope of immediate commercial viability (although that could change in the future).

It is extremely disappointing that they moved to an “adjusted” LBITDA in their December announcement but gave no hint of the large numbers of (inevitably) losses outside that the “adjusted” figure.

Coming up to end of the latest convertible extension deadline (30 June).

Taken from the Oak Bloke. One or two interesting bits re tax (ie exemption seems to go out to 2029 and not so simple as ends this year) and royalty uplift.

“I’ll admit to a change of heart here. I nearly called time. My first thought was a 15% gain YTD is decent and there is concern with Senegal’s new tax regime and THX has not yet given any concrete announcements on Segilola’s extension and results.

But its pioneer status, with 100% exemption from corporation tax, deferred capital allowances (of over $100m) mean no Nigeria tax until FY2029 although I notice a $25/ounce royalty has been introduced. At 80 Koz that’s $860m of operating cash flow FY26-FY28 for a $680m market cap, where $254m of capex builds a 2nd mine in Senegal at Douta with its 102% IRR and NPV10 of $1.8bn.

Staggering.

Then Lithium in Nigeria, its Segilola underground (5+ year extension), and third Guitry/Ivory Coast with a potential world-class deposit are in the price for free.

Despite a decent gain of over 600% this remains mispriced, bizarrely.”

https://theoakbloke.substack.com/p/the-25-for-25-revisited

Kenya.

I see Riverford, the organic vegetable box to home people, are looking to ditch compostable packaging because it costs £0.5m extra and customers are becoming more sensitive to price for their produce. They only adopted compostable packaging in 2021. The obvious substitute would be d2w. I doubt they will do this but it is interesting that, as SYM has always said, one reason that compostable packaging is not a sensible choice is cost. I suspect compostable packaging generally is on its way out but whether this will benefit SYM is difficult to say.

At the moment the business only seems to operate at a level sufficient to pay salaries to management which are very large for a small company with static/declining sales (and even then, given the losses, the salary levels are not really supportable). As noted by Poptart Laurier takes £260k and Stephen and Bristol each take £165k. They also have share options at a strike price of 4.5p (as well as other options) where the exercise date has been rolled now about three times and which currently expire end 2026. Laurier has 1.8m options, Stephen 2m and Bristol 3m.

Per company filings Laurier was born in 1950 and so will be 76 this year, Stephen in 1942 so will be 84 this year and Bristow a comparative youngster having been born in 1969 so 57 this year. I can’t imagine that Stephen and Laurier will carry on for too much longer so something will have to happen to the company shortly. My guess is a buyout by Indorama although probably not at a very attractive price. The convertible matures at end June which must crystallise thinking unless Indorama are willing (again) to roll it forward.

For a better outcome we can only hope that some increased sales come through but on past form that does not seem likely.

I fear much as they have done in the past.

I wonder if the extent of the buyback is understood. The AGM statement on the 29 January says £100m of buyback capacity is left. Looking at the last 12 days of buyback (obviously happening every trading day) there has been an average spent per day of £573,000 - although as the share price has fallen in more recent days this has been more in the £600,000 - £700,000 range. With 239 trading days left this year (from 29 January) a £573,000 daily buyback rate would, with £100m, last 174 days - so into October of this year. Presumably if there are decent full/interim results the buyback will be further extended. They don’t seem to need too much money for internal capex purposes (capitalised software expenditure fairly consistently around £40m per year). At some stage, provided results remain at least OK, something will have to give and the share price will need to rise.

It would be interesting to see their next balance sheet as the relatively consistent rate of daily buyback rather implies that they cannot easily increase it and it might be the case that they begin accumulating cash even with the buyback (that is unless they choose to repay some of the RCF - but I would expect they would want to maintain some leverage).

I don’t think there is too much to say at the moment. Presumably Kuwait and Indonesia implementation trundles on. Kenya will take more time to seal off and Nexus has only started to be shipped. Assume a webcast after the interims come out in March.

A little on the low side I think. We can hope for better than that.

It does seem to be the case. I will hang in with my relatively small stake. The buybacks will eventually have an impact so long as results remain decent. They are in the process of buying in over 15% of m/cap.

Bistolover. Thanks. Looking at the MD&A again you are right. It is not logical to spread it over sales rather than production but probably the guidance for calculating AISC does this for simplicity. It won’t make much difference generally for the big companies given the magnitude of their numbers or mid/smaller caps which only report half yearly but does have an impact on smaller/mid caps reporting quarterly. Sales v production difference probably short term a major reason for volatility in AISC.

Kat. I think AISC would be spread over gold production rather than sales. Gold poured in Q4 was 23,719 oz v 23,612 oz in Q3 so only marginally ahead. The additional gold sold in Q4 over production you mention would obviously have come out of inventory and would have largely been produced in Q3 at Q3 AISC.

We are probably debating a bit at the margin here given the gold price and FCF is likely more important (but p/e is not to be dismissed). However, having had, a while ago, a look at how p&l matched up with AISC for Q3 a while ago it seems to me that AISC (with a bit more on top) is a good proxy for the p&l costs at the moment. You can never be too sure given the way p&l accounting is done.

(Had a bit of an aberration on previous post when talked about g rather than oz).

I believe Kat is correct. $75m PBT/PAT is around the number I get to. $108m revenue per RNS, AISC costs come to $29.2m (25,830g of gold sales x 1,129 AISC per g) and about $4m of additional non-ASIC costs (essentially additional depreciation). $1,129 is the AISC for 3Q.

Also perhaps a bit more net interest income than before.

We should get some fuller fin info shortly.