Member Info for martyh

Today’s RNS is some of the legacy convertible loan being converted. Small amounts involved.

Odd price movement this morning. Perhaps some misread the RNS and thought the company was fundraising.

Paragraf update ‘in the coming months’.

Orders confirmed form the following countries:

Australia, Italy, Libya, Pakistan, Peru, Philippines, Sweden, Thailand and UK.

If we get to a position where 20MW looks likely to be achieved next year, then I think a 30p share price is justified.

Personally, I'm hoping for a lot more than 20MW next year.

The outlook statement in the interims will be very interesting to read.

The historic results to 30 June 2020 are irrelevant and we know they will show no revenue.

We might get an update on revenue from the sales so far in Q3, but I’m more interested in the outlook, sales pipeline and road map for next year.

Hi camperdown,

Why don't you think VDTK have sole rights to the graphene integrated panels?

Thanks

Agreed that we will see buying on any dips. The share price is still incredibly cheap.

Next year I expect them to easily fill the 20MW initial figure, and I’m hoping for them to hit the 55WM capacity at the current Italian factory.

Current orders have been at a substantial premium to the 1 Euro base price. The recent $2.2m order for 1.5MW works out at $1.47 (1.24 Euro) per watt. I think the marine orders will be at a higher price.

At 55MW and 1.24 Euro/watt I’m calculating EBIT of around £30m. Even on a multiple of just 10 that would equate to a share price of over £1.

Then there is the potential of the graphene development, which would take the share price to another level entirely!

Agreed Bananaman,

So many huge markets. The Middle East drilling rig market is 2GW.

My point was that the share price doesn’t even factor in 20MW yet. On 20WM of sales next year we should be value at 30p imo.

Of course I’m hoping for far higher sales.

Completely agree Feeks, and I think the addressable market is now becoming larger than the £5bn figure, as Verditek open up huge new verticals.

So many positives here:

*Large follow on order is a huge validation of the technology.

*Order valued at a good premium to the 1 Euro/watt base price.

*Opens up a large new market with the Regional Government.

This must now give confidence that at least the initial 20WM target will be hit next year. 20MW at this kind of pricing (1.2+ EUR/Watt) could mean about £10m of EBITDA. Surely the market will start to price this in now. This is before the expansion up to 55MW.

Congrats Feeks, amazing news!

Could be! ??

Agreed Shareman, great comments.

Rob Richards is really driving things forward at a pace. He’s a man on a mission. When he say ‘very near term’ I’m hoping for something next week.

I think the share price will be news driven over the next few weeks, and will be driven higher by more orders.

We know about the following potential orders: (please add if I’ve missed any)

*Mining sector. New orders are due ‘in the very near term’.

*Marine sector. In the 2nd July RNS they said that ‘on the back of Verditek's first order in this industry vertical, Verditek expects to cement its footprint in the marine market in the coming months both in Thailand and in other geographical locations.’

They are talking to seven or eight boat companies so I’m hoping new Marine orders will come very soon.

*Transportation sector. From the Paul Harrison video, they are in the process of doing a deal with one of the world’s biggest distribution trucking companies. I suspect this is through our agreement with IM Efficiency (RNS of 27th April 2020).

IM Efficiency is in a final pilot test and expects to supply 4000 trailers with solar panels in the near future. That’s about 20MW. That would be a EUR 20m+ project for Verditek.

*Oil & Gas sector. Huge scope here but they’ve specifically mentioned the 2GW opportunity for Middle East drilling rigs. Any news on this front could be a company maker.

Other than this they’ve said they are targeting Australia for mining, marine and agricultural orders.

This is just the stuff we know about.

Thanks Feeks,

In total that would be in excess of 1.2m Euro, and the timing is the coming months according to the Rob Richards quote.

Thanks RKB,

I'll take a look.

I used to be an accountant and still use Companies House a lot to help with investing.

Thanks RKB,

I've become a shareholder this week. That's an extremely useful post to show the potential margins in the UK business.

My understanding is that the increase to 55MW would come primarily from just increasing the shift numbers so that the Italian factory operates around the clock.

Therefore it should be a fairly quick process to increase the capacity, without much capex needed.

Agreed that the overheads could be spread. I was working on the basis that the £6m EBIT number was broadly made up of £8m of gross profit on panel sales less £2m of overheads.

At 55WM the gross profit becomes £22m, leaving £20m EBIT after the £2m overheads are deducted.

I don't think the £2m overheads will increase much. All of the additional variable costs (materials, staff costs etc) would be included in Cost of Sales in arriving at the gross profit.

Using a 1.25 Euro/Watt price changes the £20m EBIT to £30m EBIT.

I’ve been looking again at the potential profits next year.

At 20WM and the base price of 1 Euro/Watt we’ve been told they will make £6m EBIT.

I continue to think the average selling price will be quite a bit higher than 1 Euro/Watt.

The Michael Walters articles are very informative, I think he is clearly speaking with the company. Michael highlights that the company has the opportunities for selling some product at Euro 1.5 or more per watt. The latest order RNS spoke about the first order into the ‘very profitable’ marine market and another company in the marine sector, Solbian, is selling their panels at 5.60-9.90 Euro/Watt.

Using 1.25 Euro/Watt give about £10m EBIT vs a market cap of £30m. As more orders are announced I think the market will begin to price in the 20MW factory being full, at which point a £100m market cap wouldn’t be unreasonable (34p a share).

That’s just at 20MW before production expansion to 55MW from the current factory.

The company raised £1m two months ago. It was made clear on the call we had with the company as part of the fundraise that they wouldn’t need to come back to market for money.

In fact they increased the size of the fundraise due to investor demand. This ensured it was a definitive raised and gave them a cash buffer.

Now that orders are coming in the cash flows should start becoming very positive.