Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Thought the trading statement read well, and had lots of positive messages. However, when I looked at the EBITDA figure I was a bit disappointed. I was hoping to see a bit more oomph there. This will not of course feature all of the contribution from the recent acquisitions, but must include some I guess. An overall increase of circa of £7m turnover developed £1m+ EBITDA, which suggest an overall profit margin of 20% adjusted which is pretty good, but which shows a small reduction in margin % compared to the prior year.
They are working on efficiencies, and as these probably always lag acquisitions, perhaps I am being too picky, as most companies would give their eyeteeth for that sort of profit margin.
Cash generation looks good, and allowing for acquisition related payments looks as if it is tracking EBITDA, so a good sign of health.
Definitely a stock for the patient
So a nice trading statement,
Come on Sab, I can't make a bb comment without some daydreaming element to it! :-).
In talking about the Board, I would imagine Stewart MacDonald has at least being doing a weeks work on a regular basis preparing for the loan submission and liaising with Bankers. Also, suspect he will have been a key part of the Egyptian negotiations, and preparations. Of course you can be a busy fool, and end up in a mess.
I don't think we should be shocked by the discrete manner in which the Egyptian sale was made. I am more concerned about the price that was paid, some of which will be held in shares in the acquirer.
It either betokens some momumental news coming out of RKH, or they suddenly realised that cash was a big issue down the line, and self-interest took over.
Maybe, being optimistic, the connection with the acquirer and their BP financing, has some relevance to the future, and another useful connection.
Certainly the Egyptian sale out of the blue was an odd event, and betokens something, which needs further explantaion, but will only be disinterred if events move in RKH's favour.
My ongoing assumption is that RKH will hit the wall at some point in the future. This is giving the inner gloom merchant sway, based on the autumnal leaf mode, cash balances are in.
If either OM comes good to some extent, and/or if we get some success in the loan application in the next six months, and the share price rises we may get a cheeky cash raising exercise. Remember the Board do not get overly punished for any dilution, and may want to keep the gravy train...sorry , I meant the show on the road, for the foreseeable.
This is a very similar dynamic to Bowleven where a bloated board structure, were burning through farm out cash, until they were turfed out. They too talked about using money to fund other adventures, which would have drained the money even quicker before there was any production of money earning oil. Unfortunately, I don't think any shareholder centric activist is going to come to our rescue as happened there. In that instance, they have actually returned some cash back to shareholders after cutting operational overhead.
I was cynical about their motives, but it has proved a lifesaver for some.
Sorry to be gloomy. One hopes for the best, but it is wise in Junior oils to prepare for the worst.
The danger of not getting credit finance loan agreed for PMO is that their auditors may take this view that this is an effective impairment of their investment. That could mean as serious write-down to the p&l/balance sheet reserves.
I don't know how their bondholders are positioned, but any write-down of assets may breach covenants
Equally unless they put some positive spin on a loan failure, rather than in effect saying, 'Ok that's it, we are not going to be able to do anything.' the patience of FIG may wear thin, and could seriously make them think twice about allowing licences to be extended, or continued.
That may be tempting , because they are the biggest Creditor of RKH ( Tax owed to FIG on the farm-out payment), and will probably have the intellectual property rights all planning etc done for development so far, if RKH look like a potential administration waiting to happen.
Either way it is not a good look for PMO. So, they need a Plan B, unless RKH can find something in their original Farm-Out agreement agreement, that gives them leverage over PMO.
Also, a little matter of the 'assassination' of a whistle blower or similar that was linked to Kristina's unlovely time in office.
Hi Iamnot
No, carbon sequestration was not mentioned. Just a small column on the subject of UK funding for overseas fossil fuel exploration.
Interesting to listen to Radio 4 on the fracking issue.
Chief exec was on to say, he couldn't understand why labour were opposing fracking because they had signed up to report which picked a date for reduction of fossil fuels but which explicitly included a mix of fossil fuels in it by that date.
So opposing fracking meant that commitment meant jobs, and gas productions would have to be exported to other countries in order for it to meet the UK's committed needs.
When this was referred over to the Labour Party representative, they didn't answer a single question in respect of the agreed commitment, but basically seemed to say we have adopted this policy of opposing fracking because it will win us votes.
Policy and idiocy shake hands!
I have had to filter Carrot because he seemed to be in Warp drive posting mode, to the extent it was starting to drive me mad - so God knows what it was doing to him.
However, as a regular reader of New Scientist, there was no escape from a recent thread of Carrot's narrative. This was a small article suggesting that the UK was funding overseas fossil fuel exploration greater than the proposed limits on fossil fuel policy would suggest. This referenced two funding bodies one of which was UK credit export funding.
Of course you can read that two ways. Absolute proof that we can get funding for fossil fuel production or wariness that someone is going to focus on this in due course, and limit it. Take your pick!
To paraphrase I think Sam Moody would say; 'You will have to take that salary out of my. Cold. Dead. Hands!'
I think that is a sensible viewpoint Suresh, as PMO may have had to give sureties/covenants to cover their loan requirements, and may have backed some of that requirement off to Rockhopper, as you would expect.
Forced seller may the order of the day in light of those circumstances, if applicable.
I would personally like to see the senior execs take a dip in take home pay, as their way of investing in the project, and stretching out the horizon of cash usage, to see how much they believe in it. Because I do not see any entrepreneurial risk on their part whatsoever. But I am not holding my breath!
I fully expect to see a bonus payment relating to this sale, and a jolly nice pat on the back instead.
Remember the acquisitions were designed to cover overheads i.e salaries. A decent Chairman would take a harder eyed view now that hare has been well and truly shot (and arguably stamped on, and burnt) as a result of the outcome of those investments.
I excuse them for not seeing the price of oil debacle that side swapped many firms and the market, but have never have been an enthusiast of their investment strategy. Of course doing nothing is perhaps the hardest thing, when unrewarding activity looks worthy.
A nominal gain on the original purchase price for the Egyptian assets, and references the cash inflow received, but does not reference any sunk costs.
A bit peculiar as a deal, despite some of the earlier messaging around it.
With OM etc these guys are not exactly going to get deal makers of the Century plaudits on their purchases. In fact so far, with OM still a distant speck of possible payback, they have in total burnt cash on these investments. Maybe there was more investment required for the Egyptian play, and that seemed more trouble and risk than it's worth?
I wonder if someone has told them, get rid of your iffy Egyptian assets pronto, and we will take a stake or buy you, or possibly even farm into Sealion. There maybe some political linkage to Egypt that someone objects to, or thinks will cause them trouble.
Anyway, I bit odd in my view.
Let's face it we all want a safe energy source, and a clean world, but some of the protesters that we have seen and have heard from recently are merely extreme left wing activists dressed up in new clothes.
There is something about these movements with their biblical style prophecies of imminent doom that attract scared young people. Of course politicians can panic, as they are driven by wanting to be the head of any populist rally or fad that is going, but true Govt is a serious business, as Italy will probably discover in due course with the OM ruling.
This is the next challenge after the 'B' word is sorted!
Looked at the Trainline prospectus, and it is pretty much as expected. largely focused on the expanding opportunity to increment revenue from tickets from train and bus services on its IT platform.
They don't focus. as far as I can see on rebating payments systems where there is a train delay etc. (which Tracsis have invested in), but I guess there is a potential to have this. I suspect they will just stick to their knitting at present as there is greater revenue potential from their current path of business.
He mention 15p back in May fyi.
Next door. Does he mean Argos in the FI?
If that going to be developed little chance that RKH won't be.
However, no view on which is the better investment as history has generally proved that unless you trade in and out of Falkland Island oil stocks just sitting there erodes your wealth. Main beneficiaries have been the Directors of the companies who have salaries as if they were running BP from an era of profitable oil.
Hope everyone can turn a profit on these stocks within my lifetime.
Hi GE
Thanks for the info. Very interesting.
The float of Trainline got away. I suppose the only connection is the Railway and Software description. Trainline seems to operate as a platform taking a skim of all train ticket sales, so the revenue potential may be huge but the bottomline is I guess much thinner. Will have to take a look at their admission document when I have a moment.
I would be interested to hear how they paint their future upside.
However, it may add something to the sentiment of a sector which is ill defined at the software end for transport related issues? Of course that can cut both ways were Trainline to have a major hiccup.
I guess we in the run up to the final month of trading for the current financial year. Let's hope the new CEO hasn't copped for giving any bad messages, but from the last announcement it seems at least most likely to be a 'steady as she goes' statement. Of course would be delighted to hear about exceeding market expectations!
I thought JM would have residual role in acquisitions but whether that would survive the change in CEO, I have my doubts.
I wonder if he is starting to get bored with the School run?
Regards
Muzz
Nigoil. That may be so. I do recall the days when Desire owned a vineyard, or something similar. Even his father no doubt saw Des as a means of enhancing the family fortunes via an AIM quote. To me Stephen Phipps came over quite spivvy and entitled. That may be reinforced by the somewhat closed ranks of FI hierarchical structures. I guess all that could still be forgiven if they hadn't made such a cock up of the Des situation for other shareholders when time was ripe.
So I don't doubt he may make some money for himself or his family, but I wouldn't ever say his hand on the tiller is a sign of quality decision making. Just my personal take on it.
Why anyone would think Stephen Phipps adds anything to the process, God only knows!
Yes, they would have respect for his father, and his role and career, but the father in this case is not the son. As we experienced with Desire he managed to make money for himself and his sister whilst co**ing it up for Des.
In the case of PMO TD eyes light up when he talks about Mexico and Zama in a way he never does when the subject of the FI is raised. Possibly because Mexico was discovered on his watch and Sealion became a thorn politically and financially in a difficult period, despite its promise.
However, it would mean a decent sized balance sheet write off if PMO were to walk away from it, and they are not going to do that any time soon. As they have always said they would prefer to farm it down. That way they get something to balance out the expenditure. Failing getting finance and a farm down, PMO will just stall about their write down until they are confident their balance sheet is looking a lot better.
I believe Paypoint may be a Company that is within the Woodford portfolio as one of the more 'blue chip' elements that are relatively liquid, and therefore may be subject to some sell off if Woodford has to fund more of the leavers from his current distressed fund.
Presently Paypoint does not seem to have been unduly affected by any overhang, and I suspect it will quick bounce back from any sell-offs
I remember that the US Company (Noble) that farmed into FOGL later bought licences in the main basin for Fracking, I believe.
Perhaps either the issue of loss making fracking has been overcooked, or there is a significant mixture of profitable and less profitable fields, and so it isn't just one economic picture across the whole field of such explorers.