Member Info for optimist13

Just read Eddie Stobart's update and then checked their financials.

For 2107 they returned a 7.8% margin on revenues before interest and tax. Yes, this was on turnover of £623m, but if we have now reached critical mass, I believe we should be seeing a return of similar margins.

As I said yesterday, the BOD alluded to better interim results. Let's see what sort of margin they are producing in 2018.

Interest in Horse Hill is gathering pace. Oil pipes being lowered into the ground as I write - according to people watching the site.

I can only assume our price drop relates to concerns about our Oyster investment, but I think it is premature to think there is no value there.

Quite funny really. The derampers said BTHL was a dead duck, then it was HHDL and then Hamish was a fool for selling ZEN and ALBA. Pretty sure they have been proved wrong on all accounts.

Now they are focused on Fastbase where we do not have any financial investment.

I am sure we will hear further positive news on some of our investments soon. Whether it is Sunshine Mineral - which the derampers also ****ged off, or Human Brands, who knows, but I suspect those investors who are selling now may come to regret it.

As I mentioned yesterday, DL still came across as being very passionate about the company and stressed the fact that the company has grown from zero to a circa £18m turnover business. Of course, what is now missing is a decent return on revenues.

I am of the opinion that the company has a very tight control on costs and that profits will now increase as the business has now reached critical mass. The business should now be cash flow positive moving forward and the new business venture in to medical cannabis should increase the exposure of AfriAg Global.

We have been starved of any PR for a long time, but that is hopefully now changing as DL will want the world to know what he is doing in the cannabis arena. AfriAg Global have the knowledge and infrastructure to facilitate the development of this new venture which will hopefully lead to more investors looking at the company.

One thing is certain, our current market cap in no way reflects the value of the company.

It all depends on the small print, which we have not seen.

You are welcome. Whilst we were discussing the lack of communication and PR from the company, the directors did intimate that the half year report may be released sooner than in previous years. Might not happen, but with further announcements required on the medical cannabis side, which should happen quite quickly, positive half year figures could certainly add some momentum to the share price.

Yes, you are correct....just checked. The Polemos loan was made on the 1 June 2017 whereas the Gunsynd loan was made on the 21 July 2017.

Also worth pointing out, at the year end we held £443k in cash.

All the businesses appear to be cash generative, so it just need the profits to exceed the admin overhead cost of the Group. Given the very small amounts the directors are taking in fees, I believe this could/should be achieved in 2018.

OnTheDip, the question of fund raising was discussed. DL stated clearly that they do not need any further funding at this time. And actually, if you look at the 2017 results, the company was marginally cash flow positive.

However, it was pointed out that investments have been sold to fund the business to date, but I did come away with the impression that the first half contribution figures for 2108 will be a lot better.

On a lighter note, DL pointed out that he has a large stake in the business as do other directors. He is also getting grief from his father who holds a decent number of shares...that made me smile.

Our share price has actually been below the nominal value of the shares, so there couldn't be a placing below that level anyway. However, I really don't believe we will see any placing and if there was, I believe it would be at a much higher price.

With regard to the margins. DL did state it is a cut-throat industry, but they are now in a unique position in that they are the largest exporter/importer of perishable goods in South Africa and (very interestingly) have no issues at border crossings whereas other do. Make of that what you will. They also have guaranteed air freight cargo space.

To answer your question, I do believe they are able to improve their margins now that they have the scale. The key for me is that they will be able to guarantee delivery times on a consistent basis whether by sea, rail or air, and as a customer, I would be prepared to pay a slight premium for this.

Medical cannabis announcement. DL stated categorically that the development of this is supplementary to the existing AfriAg businesses, which will continue to grow and develop. However, he did point out that AfriAg are in a unique position given their transport and logistics framework.

Further information was given on the aborted HoH transaction. Explanation sounded perfectly plausible and it was confirmed that there would be zero cost to AfriAg Global and only a minimal cost to AfriAg(Pty)Ltd.

Polemos have just released their results and I see they have written down the value of their stake in Oyster. This is of course very normal when a new BOD are appointed, but no doubt it will give the derampers plenty to talk about.

The directors of Oyster have plenty of skin in the game, so I fully expect news from them shortly. From memory, the loan notes from Gunsynd and Oyster do not expire until the end of July,, so still some time left for the company to make an announcement.

There was an in-depth discussion on AfriAg(Pty)Ltd. I have to say that some of the answers given were a bit vague in my considered opinion, but the questions were answered.

On the subject of the fleet, DL pointed out that they have been focusing on up-scaling the business and that margins are very thin on the actual trucking side of the business. This is of course very obvious when looking at the retained margin which was highlighted to DL.

The reason given for the lack of published information was the need to retain confidentially on the operation. Not sure I buy in to that, but as Wolves said, they are prepared to look at this.

The trucking fleet has been reduced, but the use of sub-contractors has increased substantially. I asked DL how many trucks were currently operating and he stated that in the busy periods there is circa 120 vehicles moving produce. The number of directly leased vehicles is currently 45(Wolves can confirm).

DL did not duck any questions over the management and operation, in fact he went into some detail on the advantages AfriAg now have given the size of the business.

More on this later

I will go a little bit further than Wolves has on the subject of the NEX Exchange. I made it very clear that I thought the Exchange was a total joke and that it was very difficult to either buy or sell shares. I pointed out that it usually takes me at least 10 minutes to execute a trade and that you cannot get a quote and deal trade for relatively small amounts.

DL had plenty to say on this, which I do not intend to repeat, but I do believe he is considering his options and I would not be surprised to hear news in the not too distant future.

I will post a few of my thoughts throughout the day as time permits, but I wanted to start by complimenting the directors. I have been to quite a few AGM's over the years, and some of them are wrapped up in ten minutes. Whilst the formal part of the meeting did not take long, as expected, the directors took and answered question for over an hour. In fact, I had to be excused to catch my train.

My view is that DL is totally committed to AfriAg Global, although it was pointed out it does not appear that way to many private investors. They have now built critical mass in the business and are now a force to be reckoned with.

It does appear that margin has been reduced in order to achieve this critical mass, but they did state that the wildly fluctuating exchange rates had a big bearing on the financial outcome.

The company is now looking to hedge in some areas of the business in order to overcome this.

More later...

https://investegate.co.uk/gunsynd-plc--gun-/rns/horse-hill-update/201806270700036779S/

Production Flow Test Operation Commences

Positive news out this morning

I wonder why they have left it so late to release the statement. It makes you wonder whether an investment opportunity has suddenly become available.

So, they must be putting the resolution through tomorrow at the AGM....interesting.

https://investegate.co.uk/afriag-global-plc--afri-/prn/proposed-medicinal-cannabis-investment-strategy/20180625173734PCE7B/

AfriAg Global PLC, the London listed global food and logistics group, announces that its Board of directors have resolved that at the next general meeting of shareholders of the Company, the Company intends to put a resolution to shareholders to expand the Company’s existing investment policy to include investment opportunities in the medicinal cannabis sector.

The Directors believe that there are numerous investment opportunities within both private and public businesses that operate in the legalised medicinal cannabis sector in jurisdictions that are internationally recognised as having well-developed and reputable laws and regulations that govern this sector.

On adoption of the proposed new investing policy, the Company intends to appoint a medicinal cannabis advisory board comprising individuals with the relevant experience and knowledge in the sector to carry out appropriate due diligence on assets and businesses in the medicinal cannabis sector and to provide on-going monitoring of investments once made. Prior to any investments being made the Company intends to conduct legal, accounting and technical due diligence using appropriately qualified personnel for such activities and shall in particular seek and obtain appropriate legal advice to ensure that any investments or partnerships made will comply in all respects with the laws in those jurisdictions in which investments are made as well as the laws of the United Kingdom.

The Company’s Chairman has experience in this sector, serving as Co-Chairman of Canadian listed LGC Capital Ltd, which is currently engaged with investments and potential investments in Canada, Jamaica, Europe and Australia.

David Lenigas, AfriAg Global’s Chairman commented; “The legalised global cannabis industry is a fast-growing sector with many international governments legalising the use of cannabis products for medical use. Medical Cannabis for the treatment of Epilepsy has even managed to gain significant interest in the UK over recent weeks as it is doing in a number of countries around the world. AfriAg Global and its management team considers that it can bring a tremendous amount of cultivation, processing and global logistics expertise to this fast-growing sector. We will not be limiting our investment search in this sector to any one country or region and we see the growing European markets as ones of particular interest.

The directors of the Company accept responsibility for the contents of this announcement.

Plenty of activity at Horse Hill today. Don't think it will be long before the rig arrives and then they get down to the serious end of the business.

We may only hold 2% of HHDL, but even that small amount will be worth a lot of money if commercial quantities of oil extraction is confirmed.

The good thing is, we shouldn't have to wait too much longer to find out.

I wonder if the company has now agreed new off-take agreements. With the price of Tungsten remaining high, and the upgrade to the plant due for completion in September, we may even see the payment of dividends in the foreseeable future. I certainly think our investment may now be revised in an upward direction.

Reminder:

"Brazil Tungsten Holdings Limited ("BTHL")

Bodo has achieved break-even production of 14 tonnes per month ("tpm") consistently from October 2017 to January 2018. BTHL raised further funding of US$2.1m in the period to develop its project. It is also in the process of cancelling its existing off-take arrangements in order to allow it to seek new ones and pre-payments which will allow BTHL to finance its exploration programme earlier than previously planned. Due to supply constraints in the tungsten concentrate market, BTHL has been approached by various companies wishing to enter into an off-take agreement to secure supply, and the coming months will see BTHL choose the best deal.

Since July 2017, the selling price of Bodo's concentrate has increased from US$180/mtu (metric tonne unit) to US$240/mtu, a rise of 33%. BTHL is seeking to upgrade its plant in order to produce up to 60 tonnes per month of concentrate (dependant on feed grade). Management expect the upgraded plant to be completed by the beginning of Q4."

https://investegate.co.uk/gunsynd-plc--gun-/rns/half-year-report/201802231447538273F/