Member Info for Hounddog10

Share. Thank you for your debut post. I agree next year will probably be their year as they will go in with 1GW. However, I am expecting about $10m profit for the second half (could be more). Compared to the first half I think revenue will go up by $20m (monsoon heavily skewed to second half plus extra capacity) offset by $10m of extra costs. This is mainly interest. Depreciation is over 25-50 years so release of new capacity does not make much of a dent. They are beginning to throw off a lot of cash - $45m in first half (although about $30m went to finance debtors - but because of the ramp up the extent of that is a bit of a one off). In a couple of years they will be more or less self financing.

I think elephants perhaps. Was that not what Hannibal used going through the Alps? Same sort of region (vaguely).

Coee- anyone out there? Any thoughts as to profits for the second half?

They haven't even got all the machinery on site yet. It will take at least a couple of months to install and test it.

I have always thought end of the year.

The stubborn refusal of the share price here to move up is very similar to Mytrah (MYT) which has just announced 1GW of installed capacity. I think these shares are under the radar at the moment - perhaps impacted by the fallout on Chinese AiM stocks. They could become very big companies. India is desperate for power.

This is what baffles me. Presumably Stone Alliance is a shell company at the moment and say Fox owns 59% of negligible capital. Unless all the new finance is all debt Fox will be diluted out if it is not contributing equity. But then who would lend to such a thinly capitalised company? Don't know if it owns the quarries but just rock in the ground unless quarried profitably; is the Kosovan Govt giving a guarantee of the debt? What is the lender's security? If they are in the process of raising the money CG should know these answers. The interview failed to ask these crucial questions.

Sales are in USD or non Sterling. Costs - much of it Board pay - are in Sterling.

I think one issue is that I can see another placing coming if sales do not get going soon. I think they are behind where they predicted they would be at the last placing.

I was under the impression they could outsource finishing to the operations in Northern Italy that they use (but it was much less profitable because of the costs). They say they will not start installing the final bit of equipment (polishing I think) until September. In the nature of things I would not expect the factory to be up and running much before the end of this year now.

The 19 May 2016 RNS says that the Eboracum order is on behalf of Renaker Build Limited, which is a substantive company according to its website and Comapnies House. Why an established developer would source its marble through a seeming startup with no apparent expertise in the building trade is a bit of a mystery.

Ah yes thank you. I am way behind the curve on this - but seem to have identified some of the same points. Something very odd is going on here. I very much doubt any material amount of the order book will be realised this year. They have already announced in August tiny sales for the first half.and presumably nothing of interest in the last two months or they would have said something. The whole order history/company setup of Eboracum and Banyan is very strange. I have been watching FOX for a while but not invested.

It is curious. If you go to Companies House Eboracum Marble Limites was only incorporated in the last year and has not needed yet to file any accounts. The one director is Scott Oldfield. Searching Companies House a person who looks to be the same Scott Oldfield (same date of birth) comes up against three searches. There are quite a number of companies in various locations for which he is a director all seemingly dormant, in liquidation, just started etc. Cannot see anything substantive. Not easy to see what they do but at least a couple seem to be connected with running a bar. Jigsaw Leisure is the interesting one - it has gone into liquidation and the liquidator is trying to pin down the assets, most of which appears to be unpaid share capital. His report (in Companies House) makes interesting reading. One Susan Oldfield, another director, was declared bankrupt. It should be said that Jigsaw Leisure and Eboracum Marble are not in the same search but it looks as though it is the same Scott Oldfield. It should also be said that Eboracum Marble are only about half the order book and appear to be paying at least partially in advance. I hope, however, Fox have done their diligence on Eboracum.

It in the 13 May 2016 announcement. Basically Amati has agreed to take the interest back down from the 25% to the original 8% in exchange for the right to potentially convert into more shares. I think it has roughly doubled its right from 5m to 10m but the disclosure is not readily available to be clear. I would have thought they will convert into shares before expiry in August 2017.

Yes aware of that but most companies would also show a non-statutory comparative. Seems almost to be the trend nowadays to ignore the statutory requirements ...

Seems building momentum nicely. Operating cash flow only a little less than cash interest costs. As they point out the first half will be very unflattering to performance as revenue limited but interest on a time basis (plus they are paying interest on a lot of assets just about to come into production but not yet revenue generating). Why show a comparison to the nine months ended 31 December 2014 is beyond me - this is the good period - so makes their current results look less good than they are. A bit unclear on what is happening on GIC but I for one would be happy to see that deal fall through. I won't be voting for it.

There will be tax - prob not that much because I doubt there is much of a gain against original cost but you never quite know with the Indian tax authorities plus transaction costs. More generally because the upside is now clear and limited people are bailing out and taking their money elsewhere to get a return and so the price is under selling pressure. I would guess the distribution to be prob in the 85-90p range but it is largely dependent on the unknown tax.

The business of Greenko is being bought out by GIC for seemingly a 25% premium. They don't say what will happen to topco but I assume it would delist and be liquidated once the proceeds are distributed (or possibly remain as a shell for an RTO. A great pity that effectively private equity has nabbed a company just about to really get going. I would be interested to see the reasons. They say that the first half results will be weaker than expected but that is no great surprise or worry. It is the second half that matters.

It is certainly true it has high debt and interest costs - which is a little uncomfortable but not surprising given the nature of the company. But there are two points to make. Firstly they restructed their borrowing in cAugust last year such that c$550m of borrowings from Indian banks (c12-13%) was replaced by a bond (8%) issued to foreign investors. This will be a big interest cost saving mainly coming thru this year. Secondly in last years results they are financing a big ramp up in capacity that was being built and so not yet revenue generating. Most of that will come on stream this year and start earning revenue in the second half of the financial year as the monsoon hits India. I totally agree about bureaucracy and corruption in India but the founders are expatriate Indians, UK MBA educated, who I seem to remember come from wealthy Indian West coast families. They will know how to work the Indian system but the hope is have somewhat more Western values towards corruption. There is risk but it is very different to the China companies listed on AIM which appear mainly fraudulent. Also it helps that the projects are dispersed and India is desperate for power. One thing to watch for is the constant depreciation of the Rupee v dollar which can impact reported results. However, the Rupee has held up in the first 6 months. India seems to be having an OKish monsoon so far.

From 15 small-cap Slater picks: Shares in Greenko ...have been hit by the prospect of a massive dilution from two sizeable convertible instruments. Two separate investments of $46m and £100m are free to be converted into new Greenko shares from now until July 2017 at the prevailing price when the conversion occurs. The number of shares that the convertible instrument holders are entitled to are a maximum of 29m and 45m respectively. The maximum number of shares the £100m investor is entitled to is 79m, but there is no limit on the dilution from the other investment. Broker Cantor Fitzgerald believes Greenko could use $106m from its $110m cash reserves to buy out the $46m convertible. Meanwhile, the broker points out that the share entitlement limit on the £100m convertible means the investor will only maximise value if the shares trade above 82p. The dilution effect of a conversion of 82p leaves the broker with a discounted cash flow (DCF) price target of 125p on the shares.