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Alibulut: 95.6% voted to delist. Of those 57% will have been Harwood & Bayford who are majority shareholders. So really 38% of independent shareholders agreed to delist. The majority of those will have been institutional investors looking at the very long term and likely fully informed by the BoD on what is going to happen next. As a private investor you have not been informed and your 'rights' are about to be massively reduced. The lack of share liquidity and the fact you are a minnow in context of the bigger picture means you are unlikely to see your money returned and you will have no say or visibility over events in the future. You are holding a bit of paper and staring into a black hole. That is not efficient investing in my mind but I wish you the best of luck.
Boracic: I looked back and saw you first jumped on FCRM in May 21 (or thereabouts) when the SP was up at 33p. It's been a steady decline since then. I posted in November last year that the most likely outcome for this business was either bankruptcy or being taken private and I think it was a close run race. If the vote to delist had not gone through last week then I am confident it would have been taken into voluntary administration.
It's been fascinating to watch the process that Harwood and Bayford have followed - steady and methodical. The writing was on the wall when the dividend was stopped and the two protagonists failed in their attempt to buy it out. From that point the business was run into the ground and loaded with debt. The musical chairs on the BoD told its own story and Babbington's most recent comments on the Annual Report were quite frankly laughable to point of being almost fraudulent - how she got away with that I have no idea. She clearly decided that her duty to shareholders was of no consequence.
All those folk predicting a buyout, a steady rise in the share price after the decision to delist or an offer to buy their shares on delisting have simply failed to conduct proper research and due diligence. Comparing FCRM to another company similarly fails to understand the numbers. It was fun watching their flapping about though... like fish stranded on the beach when the tide is going out.
Alibulut: Ha Ha.... Why would the Sp rise? Presumably you interpret the decision to delist as an opportunity for demand for FCRM shares to go up? Why should demand go up when the shares are 1 week from being delisted and taken off the table? I look forward to being enlightened.
Alibulut - Very good. Ms Babbington is a Non-Exec Chairwoman of the company and will say nice things because she is required to. More importantly the same Ms Babbington recommended, along with the rest of the Board of Directors, that shareholders accept the proposal to delist.
So now you have expertly uncovered the double speak of the FCRM Management. Lots of nice positive words that are not matched in anyway by the performance of the company AND on the same day a recommendation that you sell all your shares and agree to delist the company!
The key point is that the new Articles of Association will be applied to a delisted company where the normal stock market (AIM in this case) rules no longer apply. No open trading, no release of RNS to inform everyone of changes, no annual reporting of results .... Basically everything takes place behind closed doors, out of sight and beyond the grasp of anyone left holding FCRM shares when delisting happens.
The Pipe: So what has happened?
Well the company has a set of rules they must obey regarding ownership called the 'Articles of Association'. So for a listing on AIM these specify that anyone holding more than 30% of the stock must make an offer (Harwood and Bayford both comply with this ruling). When the company announced the GM for delisting they also stated that new Articles of Association would apply if the vote was passed. This was incorrect. The Articles of Association can only be changed if the shareholders agree.
So, slightly horse before cart, the Board must now convene a second meeting of shareholders to agree that the Articles of Association can be changed. The first meeting will be the vote declaration for delisting and the second meeting will be to agree that the Articles of Association can be changed. The revised Articles are on Part 2 of the Circular released to inform everyone of the proposed delisting.
So nothing to do with money and everything to do with removing the obstacles (30% rule) for Harwood and Bayford to tear the company to bits and take what they want.
There is no offer!
Buy back the shares with what? Why would anyone consider lending to a company that has consistently gone backwards. FCRM has turned healthy profits into substantial losses year on year for 5 years. The majority shareholders used the company for their own benefit and stripped it bare in the process.
What would you like to debate?
Alibulut: You said: "You must usually pay dividends to all shareholders". I'm sorry but wherever you are getting your information from this is wrong. A company has no requirement to pay a dividend and there are many that do not. Dividends are discretionary and the decision to award them can b philosophical as much as financial - rewarding shareholders through growth rather than regular payments.
If you are hoping for a dividend from FCRM then you are in for a long wait, whether this is taken off the market listings or not. The underlying financial fundamentals are so poor it will take years.
Abulut: you wrote "I believe share holders eventually will get 0.5 per share offer". Where is the evidence for your belief? The RNS & Circular state that if the vote to delist is accepted on 26 September the share value will no longer be publicly visible or traded openly from after business on 3 October. Read further and you will see that all FCRM share trading after that date will be through FCRM's nominated stockbroker on a matched basis. That stockbroker will only deal with another stockbroker - so if you want to sell your shares openly at the value you see, then now is the time to do it .... unless you have a stockbroker and you are willing to go through the matching process of course.
Also, unless you can show evidence otherwise, there is no offer to buy your shares for 0.5p or any other price before, during or after the delisting process. The share is currently £0.0015 and still heading south toward the issue value of £0.0010 (one tenth of a penny).... why do you believe someone will give you 0.5p for them? Best laugh I have had all day!
Laura: You posted this.... "The Group's network of utility assets, valued over £31 million as at 31 March 2023, generate recurring income and provide attractive and predictable long-term returns. We continued to adopt additional utility assets in the year, adding them to our income generating portfolio".
Absolutely right. There is a reliable and lucrative income stream over and above the day to day business of designing, building and commissioning utility infrastructure. And yet, it's all for naught because the business lost £25m this year. So in context of your post they actually lost much more and used the income to pull it back to -£25m. 5 years ago the company was run at a profit and the additional income stream paid shareholders a dividend.
The situation now is that the company is running at a loss. It has been loaded up with £11m of debt and it is paying 20% interest to those that loaned the money, none other than Harwood and Bayford. I suggest to you that the income stream is making a good contribution to the interest and administration charges on the loan and in actual fact are being diverted to Harwood and Bayford pockets?
Also right the network of utility assets have a asset high value(£31m), however the liabilities have pretty much gobbled them up because the reported assets of the whole company is just over £20m.
Its like living in a big expensive house that on the face of it makes you look rich but in the background there is a mortgage you can't pay and the mortgage company are slowly and steadily taking ownership of the house around you. You are asset rich on paper but the liabilities are slowly eating it away! Worse though is that the income stream has dried up and you owe more today than you did before. That's FCRM in a nutshell.
Laura: The Story you want to believe: "Believe that the opportunities for the Group and its Fulcrum, Dunamis and Maintech Power businesses are significant and reinforced by strong market fundamentals".
The reality in Facts:
Operating Profit: £6.13m (2019); -£2.1m (2020); -£11.17m (2021); -£13.69m (2022); -£24.59m (2023)
Profit after Tax: £4.92m (2019); £1.56m (2020; -£10.28m (2021); -£13.42m (2022); -£25.14m (2023)
Earnings/share: 2.25p (2019); 0.68p (2020); -4.49p (2021); -5.20p (2022); -6.30p (2023)
The company has assets of £71.97m but liabilities of £51.27m so its net worth is a bare £20.71m. Year on year it has never been lower and it is less than half of last years (£45.88m in 2022).
Conclusion: I have no doubt the opportunities for FCRM are significant and the CEO speaks in good faith. The reality is that FCRM's owners seems to be incapable of accessing them and making a profit. The reason is that Harwood and Bayford used the company for their own ends by diverting assets elsewhere (installing domestic meters at a massive discount and loss for example). Cumulative losses, sale of assets and acceptance of debt (with strings) have pushed the company over the edge. Delisting is most likely going to happen, but if it doesn't then voluntary administration is the next logical step.
My last words. As said before I have no skin in the game as I sold at 45p and higher when dividends stopped. I was always attracted to the company for what it was, not what it has become and I continue to watch the saga slowly unfold - a slow mo train crash.
This information is in the public domain:
Harwood have 28.8% of the equity
Bayford have 29.1% of the equity.
Together they have a majority shareholding of 57.9%. The BoD holdings and those previously on the board are less than 5%. The balance needed to get over the line to 75% will come from institutions who have been selling down anyway. The BoD support the decision to delist and generally that holds credibility in the market because what they are really saying between the lines is: "We recommend you take your equity at what we offer in October because if you don't you will get nothing"
Both parties are holding just under the 30% shareholding because of an agreement they signed when they failed to take the company private 2 years ago. So to get around that they have loaned the company £11m with an agreement it can be converted into equity. As stated in previous posts both Harwood and Bayford have an iron grip over the company and they can pretty much do as they wish. They have also changed the rules (Articles of Association) so they can both go over the 30% holding without having to make a formal offer.
Whatever you think is happening the reality is that this company will be delisted in October. Shareholders will be offered the then going rate. This process has been well flagged by the actions of Harwood and Bayford.
The business is not primed for recovery. You need to read between the lines. Bayford and Harwood are the majority shareholders and they loaned the company with money that took it further into debt 'with strings'. If the delist does not happen then the logical strategy is to call the loan on the basis that the company can not afford the repayments.
As a shareholder you have a choice. Take what's on offer when the business is delisted or get nothing when it is declared bankrupt. This isn't a recovery play. Bayford and Harwood are working on a strategy that was forecast way, way back.
It was always the strategy to take the company private. The first attempt failed so the shares were bought up and eventually the rules changed to allow the majority shareholders to increase the percentage holding without triggering a formal offer. The same players then loaded the company with debt but made sure the money was repatriated through interest and admin charges. Finally the open offer was a cynical move to take share ownership up to 60%, effectively removing any challenge when the decision to delist took place.
The trading report is disingenuous. The company has been set up to fail and that was obvious 2 years ago. There have been some sharp practices here and I am sure a good many decent folk will have been burned along the way.
I stand corrected. My apology.
Hello lotusseven. FCRM sold its gas pipelines and domestic connections in 2019 to ES Pipelines Ltd. The regular income they received from the gas supply was also sold without retaining royalty rights. ES Pipelines paid £33m for the pipelines over 4 years and the money from that pipeline sale was used to pay off loans, more recently it has been used to support the business. The sale RNS was released on 23 Dec 19 and subsequently confirmed 4 Mar 20. Furthermore the agreement was that if FCRM installed future gas pipes they would be offered for sale to ES Pipelines.
So you are either 3 years behind the curve or you know of some other gas pipeline income on the books?
QuantumStar - I am pretty sure you have posted something similar before. My understanding of what you have written is that you believe FCRM, as a producer of renewable energy, should aim to sell directly to the public. You preface this assessment with a hope that you do not lose money.
There is an irritating and much overused phrase throughout the market chat boards. Do Your Own Research. Never in all my days has it been more appropriate to suggest an individual take this somewhat patronising advice. Let me give you a clue.... FCRM do not produce renewable energy! They are not engaged in the production of any energy, nor do they manage energy or distribute energy let alone sell energy.
It might be a good time for you to reassess your investment strategy as it is founded on a false premise.
Turner & Harwood both fought over the company in an attempt to take it private. Their attempt failed because the company is domiciled offshore. Turner & Harwood then built up their shareholding to the extent that the Articles of Association were changed to allow them greater control without being forced to make a takeover, as per the usual rules. They have continued to consolidate their positions ever since and any future conversion will enhance their benefit to the point that the company is increasingly in their complete ownership. They are not only the majority share owners but increasingly the shareholders with an iron grip over its future - no one else can stand against them.
The decision of the company to withdraw from installing digital domestic meters is hardly a surprise. The original contract was to install meters for a utility company owned by Turner. Before this Fulcrum had no involvement in domestic meters at all. The contract was heavily biased in Turners favour and Fulcrum was taken to the cleaners. it stands as an example of how a majority shareholder holds sway and it was disastrous.
I have no axe to grind because I jumped ship when the dividend was cut and the sp was falling from 40p. The roles of Turner and Bayford were just beginning to come into play, and it coincided with less transparency over how the company were performing. I understand a contrarian position and why at 1p this is inviting. I wrote a year or so ago that the company needed to focus on what it does best - designing, building & installing power grids - if it does then it could certainly bounce back. However with the current set up as it is I can only see a Machiavellian plot to take it into voluntary administration and then buy it back for £1, with the debt wiped clean.
All you need to know about this company is looking right back at you. A 'Trading Statement' that is a rehash of an earlier RNS and which contains absolutely nothing about the performance of the company other than 'in line with expectations'. No statements about newly won contracts, money in the bank, income or turnover. Compare it with previous trading statements. Blink and you might miss the loan (from shareholders at a whopping 20% interest + 20% arrangement fee) has been extended.
So in context a company struggling has been loaded up with debt that it will not be able to pay off and the terms of which will send it into greater debt. Meanwhile the main shareholders are skimming 40% of the loan back into their pockets through preload arrangement fees and interest. The promise of conversion is a mirage.... the company is worthless.