Member Info for pekingduck

Mistral: Driving Revenues and a Move Into Profit We estimate a FY 2023 revenue of £21.7m from sales of 36MWh of batteries and small additional revenue from ongoing installed fleet maintenance services. For FY 2024, we forecast overall revenue of £37.3m from sales of 57MWh of VFB systems and revenue from services. This forecast is supported in part by new orders already announced including 15MWh from Everdura, the 4.0MWh order announced today and a pipeline that includes over 40MWh of projects that are negotiated and close to signing and the 432.0MWh noted above. Although order cover is not yet published for FY 2025, given its cost and functionality attractiveness to the market, we expect that Mistral will dominate sales. We estimate FY 2025 revenue growing to £114.0m from sales of 300MWh Mistral VFB systems and £3.5m from ancillary services. For FY 2026, our estimated sales of 400MWh of VFBs and ancillary services produce an estimated revenue of £155.0m. For FY 2023, we forecast operating costs to have risen from £19.0m to £20.0m. During FY 2024, IES will be completing Mistral product finalisation and launching international marketing. We expect operating costs to rise £22.0m and in FY 2025, by circa 10% to £24.0m as the company ramps up sales of Mistral. For FY 2023 and FY 2024 respectively, this results in EBITDA losses of £20.8m, and £19.3m. For FY 2025, we see a move to EBITDA positive of £0.7m. In FY 2026, on revenue of £155.0m, a 22% gross margin and operating costs of £29.0m, we forecast an EBITDA profit of £6.3m. For FY 2024, we estimate an operating cash outflow of £20.1m combined with £1.0m of capital expenditure, £0.2m of lease expenditure plus £54.6m of net proceeds from the recent fund raise to see end cash close at £38.3m. For FY 2025, we estimate end cash increased by £0.9m to £39.2m and, on strongly rising sales, for FY 2026, we forecast net cash from operations of £6.3m, capital expenditure of £1.3m and £0.2m of lease expenditure to see end cash increase by £4.8m to £44.0m.

Invinity Energy Systems (IES LN) develops Vanadium Flow Batteries (VFBs) for utility-scale grid storage. The Group’s next-generation Mistral VFB technology, jointly developed with Gamesa Electric, launches in H2 2024 to provide grid-scale longer-duration energy storage (LDES) as renewable generation increases globally. To capture this opportunity, in May 2024, the Group raised £57.4m through a share placing which included £25.0m of UK Infrastructure Bank funding for projects. The Group announced yesterday a 4 MWh VFB sale to PowerFlex, part of EDF Renewables North America on behalf of a California Energy Commission-funded solar microgrid project being undertaken by the Rincon Band of Luiseño Indians. This win, in the high growth U.S. grid storage markets, underpins our FY 2024 forecast for revenue growth of 72% to £37.3m from sales of 57MWh of VFB systems and services. With its strong commercial pipeline, we see this as an early new order unlocked by the Group’s strengthened balance sheet that provides a new source of potential share price catalysts.

Recommendation and Target Price IES is on a high growth trajectory supported by rising order and underpinned by the new funding in May 2024. The licencing and royalty model and UK investment projects are not explicitly modelled and provide upside potential. Our DCF valuation of £486m sets our 12-month target price of 110p/sh. Buy

Global Ports Holding, the world’s largest independent cruise port operator, has announced a Q4 and full year trading update for the financial year ending 31 March. Full year EBITDA increased by 47% to $106.9m, nicely above our estimate of $104m, reflecting a better than anticipated Q4 outturn. The Group continues to expect to welcome above 16m passengers across its port network this year and at this stage we retain our FY25F EBITDA estimate of $139m, with assumptions conservatively set. The current valuation, c8x FY25F EBITDA, fails to reflect the long-term cash generative nature of its concession model, the structural attractions of the cruise industry and the potential to add to its portfolio. We see fair value from its existing network of comfortably above 500p/share. HOUSE STOCK

I feel sorry for the analyst at Shore Capital, house broker, comes out with a pretty glowing Q4 update this morning, full of positives, followed by the CEO suggesting the stocks' worth a lot less than he suggests based on his research & projections. Guessing he's not too impressed this afternoon!

The whole statement is bizarre. I could understand the first paragraph if the share price was declining or under a short attack, but it's the opposite. Why does the recent improvement in both the sp and today's bullish trading statement justify the merits of taking it private? Unless of course it's a poorly worded attempt to buy it on the cheap by suggesting the opposite. Which it seems to be..

GIH as the controlling shareholder is convinced of the merits of moving the business into private ownership and intends to seek delisting of the Company and taking it private. Although as a standard listed company delisting can be implemented through a decision by the board of directors of the Company and neither a shareholder vote nor a squeeze-out is required, GIH is considering a possible cash offer of US$3.00 per share (the "Offer Price"), to be implemented by GIH's wholly owned subsidiary, Global Ports Holding B.V. ("Bidco"), for the issued and to be issued share capital of the Company not already owned by Bidco, as a liquidity opportunity in conjunction with the delisting. GIH and Bidco are in discussions with potential providers of funding. There can be no certainty that an offer will be made.

They're good observations bohercom, and when you look at the progress made operationally vs the market's reaction to that, it's definitely been a very frustrating 3 year period for shareholders.

But there are reasons for that. ATM has issued abt 440m new shares since march 21, at 6p and 5p, and no doubt a host of warrants and options that have yet to be converted. So the number of shares out has gone up by abt 40% (at least..).

The market cap on the first issue was £67m and on the second one £76m, vs £74m currently, so despite raising over £24m in these offerings, the market cap has actually gone down. The market basically saying that ATM hasn't converted that cash into enterprise value - not surprising as it has been loss making every year since the IPO and has burnt through much of the cash it has raised in opex costs. Even the latest round of finance through Orion only plugs the gaps in the income statement until some time in 2025, so if ATM can't turn it around and start producing +ve free cash flows in the current FY, it's going to have to find further finance next year, again.

Some will disagree with this assessment but this the actual bottom line, and the market knows it. Hence 4.5p currently on the bid.

Time for AV to p+ss or get off the pot.

CP, similar date to me, first invested in 2008, energy analyst at collins stewart was pushing it, arranged a presentation with brian hall. When i left there i forgot about the small holding i had, didn't think about it until the mid 2010s, held on too long through the 7p spike but thankfully upped my holding considerably during the dark days of 2020. My birthday tmrw, couldn't have timed the news better :) GL to all patient long timers..

PERTH, May 22 (Reuters) - BHP's bid for Anglo American underlines the growing appetite for energy transition metals like copper from miners who must become more aggressive to secure new projects or risk missing out, investors and mining CEOs said on Wednesday.

The bid by the world's biggest listed miner for Anglo is expected to whet appetite for more deals in the sector whether it goes ahead or not, they said.

"There is clearly a preference for buying over building because costs have ramped up so much in the past few years," said Ben Cleary of Tribeca Investment Partners, which is an investor in Anglo American.

"BHP ... have been telling you for a long time that they love copper. Rio the same. In terms of their portfolio skew they are still very heavily weighted to iron ore ... you are going to see more deals," he said, speaking at the AFR Mining Summit in Perth.

Anglo has twice rejected overtures by BHP, whose deadline to make a third offer expires later on Wednesday. Instead, Anglo has pledged to break up its company to lower costs.

Whether Anglo's management decide to engage with BHP on Tuesday, investors expect more interest in the sector as copper prices, which hit a record above $11,000 a tonne on Monday, climb and encourage new projects.

Rising prices will only make competition for copper assets more intense, said Brett Beatty, partner and managing director Australia, of private equity company Resource Capital Funds.

Beatty said he had faced internal questions over whether RCF had overpaid for the 11.9% stake in Botswana's Khoemecau copper mine that it bought for $70 million in 2019.

That stake was sold when China's MMG bought the mine for $1.88 billion six months ago, making it worth some $224 million, roughly a two-fold return.

“It’s a market where you have to take risk and you’ll be rewarded for it, but if you sit on the sidelines you’re going to miss out,” he said.

Given that lithium prices have begun to recover from rock bottom lows, for companies with the funding, now is a good time to buy, said Joshua Thurlow, head of lithium at Australian diversified miner Mineral Resources. "M&A's on people’s minds. It’s at that point in the cycle. If you can be counter cyclical ... you could argue this is a good time to do it," he told Reuters.

"But also sometimes it takes a lot of gusto and a major balance sheet strengthening process to be able to do it," he added. MinRes embarked on an acquisition spree of significant stakes in Australian lithium developers last year.

ODA, ATM's relationship to the tin price started to break down in September 23, around about the the time they announced the start of the delay with finding a partner. In the following 8 months, the shares are down 38% vs Alphamin, which does correlate well to the tin price, +35%. Over the same period the tin price is up about a third.

To me, it reflects a complete lack of faith/interest in ATM as a play on tin, and growing frustration over the time it takes them to make decisions. It shouldn't have broken down this badly, as production has increased, costs have improved, and the future Li streams will be highly profitable, when they materialise. Maybe just general disatisfaction with progress and a generally -ve vote on the strategic progress of ATM overall. They have a lot of ground to make back up.

Timings. The pipeline increased 17% since last reported in November 2023 giving comfort in our underlying medium term forecasts assumptions. New strategy changes margin potential We also note the development of strategy facilitated by the fund raising. In addition to the investment drive in the UK, the company will continue to focus on both the UK and North America as its core markets with a manufacturing of the cell stacks in Bathgate, Scotland and Vancouver, Canada. Other manufacturing capability has already been expanded to partner and existing strategic investor Baojia. Outside these core markets Invinity is moving to a manufacturing strategy based on a licence and royalty model. This will reduce the need for capital deployment while allowing better margin through royalty payments. We have modelled a growing proportion of non-core market royalty sales starting gradually from FY 25 and increasing to 50% of all business by FY 28. This initially grows the effective gross margin from 22% to 28% in FY 26 but by FY 28 we think the underlying gross margin of 25% would be improved to 38%. Forecasts adjusted for new model We have adjusted our forecasts for the equity raise and resultant dilution. We have also adjusted for the new strategy with an assumption that new sales from FY 25 onwards will be increasingly split between core and non-core markets and non-core will receive royalty revenue but will avoid the manufacturing capex required to deliver this. However, we have also increased opex to reflect additional spend on marketing and the expansion at Bathgate. We have additionally added an investment income stream to reflect the minority investment in UK projects. Dilution significantly offset by other gains As a result, our headline revenue forecasts from FY 25 drop as half of revenue is replaced by royalties, but operating profit rises to reflect a better overall margin. Additional investment income starts to appear in FY 26 and there is additional investment in the UK projects from FY 25 together with the £2m manufacturing spend in Scotland. The fund raise adds cash but also shares which rise to c400m shares. While this represents considerable dilution it is significantly offset by better operating profit, investment income and lower capex. As a result, our central case valuation falls to 86p from 134p and still represents considerable upside on the current share price.

FUNDED TO CASH GENERATION AND MORE Invinity’s major equity fundraising is targeting a minimum of £50m with half already committed by the UK Infrastructure Bank (UKIB). A second strategic investment of £3m has been committed by Korean Investment Partners. The raise will see Invinity to net cash generation, with £30m of the raise supporting the company’s scale up ahead of this year’s launch of the next generation Mistral flow battery. The raise will boost the balance sheet, reducing counterparty risk and unlocking sales and bigger deals, critical to maximising the potential Mistral.

Investment in UK Projects to Unlock Further Opportunities The funding will also allow Invinity to take minority stakes in long duration storage projects in the UK with at least £18m allocated. This will increase equipment sales, add project returns and help establish the company as a leader in the UK market. As investments in physical assets this value remains on the balance sheet and, along with the endorsement of two new strategic investors, supports the company as a counterparty. Invinity is targeting 96MWh of projects which would deliver c.£43m in sales. As one of the most rapidly decarbonising electricity systems globally the need for long duration storage in the UK is growing and we see leadership here as resonating in other markets. More intermittent wind generation will see storage duration and cycles lengthening which plays to Invinity’s competitive advantages against lithium-ion batteries. Additional support for long duration storage is now likely with the government consulting on price support. A potential move to zonal pricing could create more local price volatility benefiting long duration storage.

Strategic Investment Follow Major Due Diligence The funding will also support accelerated manufacturing scale-up of Mistral which completed performance testing in February. This will include a £2m investment to increase manufacturing facilities in Scotland and further expansion of manufacturing and supply chain in North America. The support of UKIB shows how helpful a policy bank can be to clean energy financing and its ability to develop Invinity as a national energy storage champion with global reach clearly demonstrates the additionality it seeks. Invinity will move its domicile from Jersey back to the UK further cementing its position as a UK company. This is UKIB’s first investment in a public company and this investment comes off the back of more than 6 months of detailed third-party due diligence. It is a public market investment with private equity diligence and as such we think the information content of the investment adds significantly to its monetary value.

FORECAST CHANGES Comfort in current trading Invinity has given a current trading update and for FY 23 remains on track to recognise at least £21.6m of revenue in 2023 and we remain comfortable with our £22.4m forecast. FY 24 is likely to be significantly second half weig

GPH shd be trading at £3 on current performance, Shore have a conservative price target of £5.50 by 2026 as the recent new port investments ramp up and hit the bottom line. Very undervalued..

I tendered all my holding for the buyback at £10.50, got scaled back to 54% which is better than the initial offer of around 36%. Pretty happy to get out with > half my holding at this price, having bought in under £5. Letting the others revalue towards £10 and then run this to see if the green energy recovery boosts the unlisted holdings over the next couple of years..

CCC, i share your frustration. The reality is in the financials, something that rarely gets proper scrutiny here or by the company itself.

ATM had c. 750m shares in issue in 2021, it's now currently 1.54bn - so plenty of reasons for a dilution of the share price. There are probably more to come as i doubt the Lithium partner will just settle for loan finance, they'll want equity participation.

Cash from these additional shares has been used to finance capex, hence the bigger scale of the operation, and the by-product feeds, but some has also gone towards financing opex, plugging the shortfalls in the income statement as ATM has operated at a loss after tax since in listed in 2017. And the current forecast I can see on BB is for that to continue for the next 12 months (in fact the loss forecast for 2024 is -4.4m and for 2025 -10.2m). This may/will change after some clarity on the Li partner and what that will bring for Li sales, but currently that's unknown.

So ATM has traded at a loss for 7 years, is forecast to do so again this year, and the recent financing will probably be used up for pre-agreed capex by this time next year. So unless AV can finally delived some +ve free cash flow in this FY, as things currently stand, ATM will need more finance in 2025. And that's what the market knows, and is pricing ATM accordingly.

Valuation wise, even if they hit the BB revenue estimate for 2025, at the current share price and mkt cap, ATM trades on 2.7 times sales, which isn't cheap for a mining stock (the average is well below 2, and closer to one for the majors). At 6p, the ratio was a lot higher - in anticipation of a big increase in sales over the next couple of years, linked to the strategic partner and ramp up in tin volumes. The latter isn't now expected until April 25 at the earliest.

So effectively, ATM trades on a high multiple, is forecasted to be loss-making for another 12 months (as things stand) and has taken six months longer than first announced to secure a Li partner.

But 2024-25 could be 'transformational' for ATMs fortunes. Well, the jury isn't convinced right now.

There's no disputing the size and value of the resource it's sitting on, but unfortunately for AV and it's patient shareholders, the market isn't interested in valuing it on it's reserves. Whish makes sense, if you don't have the finance or what seems to be the urgency to monetise those reserves over a reasonable time frame. 7 years is long enough to wait for some investors, clearly.

When asked in the interview about the scale up of the operation (so-called phase 2, which no one seems clear about as still an objective for ATM, maybe phase 1.5..?), he states that this should be 'self financing from here' (at 6.15 mins).

Really? Last I saw from both ATM and H&P was this was forecast to need finance of > $400m, but hasn't been mentioned for some time.

ATM is still not profitable and doesn't produce +ve cash flow, so where does this kind of statement come from and what backs it up? Unless something dramatic has happened with the company's cashflows that has t to be reported.

Is this for real or just another off the cuff statement made on a call that don't stand up to any scrutiny. He's been gulity of this in the past. What backs it up?

He frustrates the cr+p out of me as well. Still waiting for that 'transformational' year for ATM he's been spouting on about since 2021. And he expects that to happen with a cohesive funding strategy to finally deliver the value & potential that is so clearly evident in the mineral resources the company is sitting on.

One positive in the latest hyped news release, finally a recognition (& mention) that ATM has to deliver +ve free cash flow in this FY. Only taken six years to realise this is actually quite important.

Finance, never been one of ATM's strong points.

I still argue that there's a good deal to be done in selling ATM to one of the many so-called interested parties - waiting for AV to deliver has become tedious.

December, Crescent Point Energy finalised its acquisition of

Hammerhead, which resulted in a $175m distribution to REL and the receipt of 8m shares

of Crescent Point Energy (CPG). In addition, Onyx's valuation also increased from 3.00x

to 3.20x Gross MOIC. However, the decarbonisation portfolio dropped 22.9% in value,

driven primarily by its position in Enviva, which lost 85.4% of its market value due to

missed earnings targets, plant-level operational disruption, and ongoing restructuring. In

addition, FreeWire lost 75% of its value due to reduced growth projections as the

company works to preserve cash in a challenging fundraising and growth environment

for EV-related businesses. With the exception of Infinitum, the remainder of the

decarbonisation portfolio continued to suffer from fundraising headwinds caused by the

impact of rates and lower risk appetite from investors. RSE says that these businesses will

remain susceptible to market volatility until they reach profitability.

Having updated our model, our live NAVe falls by 1.2% from $15.76ps/1248pps to

$15.57ps/1233pps, down 2.5% since 31/12/23, reflecting overall weakness in the listed

holdings, with a notable 57% fall in Tritium, 48% in Enviva and 10% in Crescent Point.

RSE continues to show its commitment to capital returns, with its announcement today

to return $200m via a tender at a 16% discount to the 31/12/23 NAV. The tender price is

fixed at 1050pps, a 31% premium to last night’s close and a 16.4% premium to the current

price. If approved by shareholders, this would lead to an estimated uplift of around 8.7%

to our live NAV. The potential impact of the remaining buyback capacity would be to add

around 1.7% to NAV in the absence of the tender. But it becomes more powerful if

deployed post tender as the £22m would buy back a larger proportion of the remaining

shares at potentially a bigger discount to NAV (we argue that post returns of capital the

headline discount should widen to reflect the smaller amount of cash on the balance sheet,

with the price constant, and the NAV enhanced). At current prices the combined impact

would ab an estimated overall 12% NAV per share increase. The price has responded well

to the tender news, and is up 13.5% to 908pps (@9.30). This implies a headline discount

of 26.3% to our live NAVe. But stripping out cash and listed this is a 106% discount to

the remaining unlisted holdings (this is the metric to focus on in our view, and should

remain constant before and after any capital returns). This remains very good value in our

view and thus overall we remain Overweight

Exert from recent JPM note on results/tender offer:

RSE is proposing to return $200m (£158m) of its excess capital to shareholders via a tender offer at a fixed price of 1050pp,

a premium of 31% to the closing market price of 800pps on 7/2/24, and a 16% discount

to the 31/12/23 NAV announced today of 1253pps (see below). RSE expects to launch

the tender before the end of this month, closing during March. The number of shares

purchased is expected to represent ~36% of RSE’s existing ordinary shares then in issue

(excluding any shares held in treasury). The tender requires shareholder approval at an

EGM, which is anticipated will be held in March, and will be subject to other legal,

regulatory and customary conditions. Since the announcement on 23/5/23 of the

authorised increase of £30m for the share buyback programme through to

31/12/23,126,023 ordinary shares have been bought back at a total cost of £18m ($22m)

at an average share price of 567p/$7.13. As of 31/12/23, £22m was available for

repurchase. In addition, pursuant to changes to the IMA announced on 3 January 2020,

the manager agreed for RSE to be required to repurchase shares or pay dividends equal

to 20% of net gains on dispositions. No further carried interest will be payable until the

$85m of realised and unrealised losses to date at 31/12/23 are made whole with future

gains.

Portfolio performance for the last quarter of 2023 remained essentially flat with positive

performance from the conventional energy portfolio offset by lagging results from the

decarbonisation investments. Growth stage (pre-profitability) energy transition and

decarbonisation investments continue to lag broader markets, and still face adversity as

the viability of their business plans remain in question due to a dampening of investor

appetite in the face of higher interest rates. RSE points out that a lower risk appetite

presents a substantial risk for these businesses as they are at a stage in their growth that

relies disproportionately on funding from private equity, corporate balance sheets and

institutional investors, and that RSE’s decarbonisation investments are not immune from

these headwinds. On the energy commodity front, WTI crude prices were down 6.5% in

2023 and 20.8% in 4Q, with Brent Crude down 6.2% in 2023 and 19.2% in 4Q. Henry

Hub natural gas spot prices were down 29.1% in 2023 and 3.7% in 4Q. Consolidation in

the US oil and gas sector has reached levels not seen in a long time with over $250bn in

acquisitions announced in 2023. The Permian basin featured prominently in this deal

activity and reflects the acquirers' strong balance sheets due to the sector's commitment

to cash-flow-generation.

Against this backdrop, RSE's conventional energy portfolio gained 7.6% in value over

4Q, driven largely by Crescent Point Energy's (previously Hammerhead Energy) 21.1 %

improvement in share price, countering slight weakness in Permian

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