Member Info for ocelot

The conference call wasn't that long ago, on 05/05:

Q4 was the target period at that time.

That would be a considerably larger figure than 1.91p.

That would be a larger considerably figure than 1.91p.

It's not a valuation of the group as a whole, no.

PPS: I am NOT providing a valuation of Angus, I am simply providing a per share valuation of its cash resources + tax losses in AEWB No.3 Limited.

PS: I've absolutely no idea what constitutes a "standard" way of valuation for an AIM company, but I imagine the value of tax losses are often overlooked.

I've calculated the value to Angus of AEWB No.3 Limited's tax losses at 30/09/19 (AEWB No.3 Limited being a 100%-owned subsidiary) and converted that value into Angus's share price (along with Angus's cash resources of £4m).

Cash resources, about £4m

Value of AEWB No.3 Limited's tax losses at 30/09/19, to be used to offset taxes on Saltfleetby's net revenues as per the CPR: £6.256m

Total: £10.256m or 1.91p per share.

Losses can be reduced when and if tax losses can be offset against future profits.

In Angus's case, because they are subject to a total tax rate of 40%, this makes tax losses particularly valuable.

£15.64m at 40% being £6.256m.

My understanding of their note 9 to the 18/19 accounts is that AEWB No.3 Limited's tax losses can only be used against future profits generated in that company.

It makes total sense, therefore, for AEWB No.3 Limited to be the operating company for Saltfleetby.

It should be noted: the £15.64m of AEWB No.3 Limited's tax losses are already reflected in the CPR's mid-case forecasts.

My point is that these losses exist already but are not reflected in Angus's current valuation by the market.

£50.5m are the Saltfleetby CPR's mid-case total pre-tax future net revenues (the post-tax figure being £36.3m, giving £25.2m of net present value when discounted at 10% pa).

Total tax losses of £18.533m are the past, £15.64m of which can which can be used in AEWB No.3 Limited to reduce the taxes on the pre-tax future net revenues.

From note 9 to the 18/19 annual accounts:

The Group has incurred indefinitely available tax losses of £18,533,000 (2018: £14,796,000) to carry forward
against future taxable income of the subsidiaries in which the losses arose and they cannot be used to offset
taxable profits elsewhere in the Group.

The principal subsidiary involved is AEWB No.3 Limited (£15.64m as per the Saltfleetby CPR).

Huge debt? That's certainly not the adjective I would have used.

"Merely accounting hocum"? Not really, it's real money we're taking about (money paid to HMRC IS real money, as we all know.

The Saltfleetby CPR suggests they will be making money, so it's progress with that project which is likely to determine when the tax losses are brought onto the balance sheet.

They are off-balance sheet at present.

When management and the auditors are convinced they can be used within the business, they will be brought onto the balance sheet.

... and that, given the current taxation system, those tax losses are particularly valuable to a company such as Angus.

Just means tax losses can be used to offset future taxable profits.

PS: it means UKOG is cheap, because its current market value is covered by its tax losses alone.

On p47 of Angus's CPR, the corporation tax rate is shown as 30% and the supplementary charge as 10%.

If we assume UKOG's accumulated losses at 30/09/19 of £59.153m are the same as its losses for tax purposes, then the value of those tax losses is (30% + 10% =) 40% of £59.153m, ie. £23.6612m, equivalent to 104.7% of the company's current market cap.

Tax losses of £15.64m at 30/09/19 are shown on p47 of the CPR.

The corporation tax rate is shown as 30% and the supplementary charge as 10%.

These tax losses are, therefore, worth (30% + 10% =) 40% of £15.64m, ie. £6.256m, equivalent to 133% of the company's current market cap.

Angus is grossly undervalued by the market.