Member Info for Pip56

Citing volatility in the power markets must be a smokescreen. FCRM dig ditches, design and build utility networks to connect developments, install EV infrastructure and, more recently install smart meters. The ups and downs of the wholesale gas/electricity price should not be a factor in what they do. Or am I missing something here? Nexus, a similar business, has offered no similar observation.

An update from la la land. The opening statement "the board notes the recent share price movement" implied the market was wrong. The update then goes on to state revenue is up by 47% (on last year) to £28m but earnings are just £1m (EBITDA) so actually nearer £500K. Worst still net debt has ballooned from £1.5m to £3.3m, a 100% increase. all this despite receiving £3.3 in gas asset transfers.
Mr Dugdale is "pleased with the groups performance" which seems slightly misplaced given the poor profit margin and increasing debt. If the intent was to reassure it seems to have had the opposite effect!

Big drop today, currently down 3%. I wonder if the market is reacting to the governments latest 'net zero' announcement? Biffa will need to look at it's fleet of trucks and work out an electric/hydrogen replacement plan - expensive with little residual value coming back from the old stock. It was on the cards for 2030 anyway but the government asking for a plan by 2024 seems to be concentrating minds. Or is it something else?

RNS Fri 5th June 2020 - Tender Offer Update. It sets out the relationship agreement.
"Neither Harwood nor Bayford will be permitted to make a general offer for the Company's shares unless the offer is recommended by the independent directors and neither must take any action which would trigger an obligation to make a mandatory offer"

I am sure there is a later RNS that caps the positions of both parties by % share ownership. I don't have time to go digging just now but recall reading it.

I jumped ship earlier in the year when the board failed to keep shareholders properly informed of the results release date. I have kept a watching eye on proceedings and used NEXUS for a like for like comparison. NEXUS are, like FCRM, a multi utility company but based in London with Utility, Civil Engineering & Smart Network divisions that all report activity. The smart network revenue has grown by 370%, order book by 280% and they are declaring oversight of a pipeline of £400m new contracts. By contrast Civil Engineering has gone backwards and Utility holding its own. Dividends have been reinstated.

In contrast FCRM have declared an ambiguous order book and seem overly fixated on installing digital utility meters. Neither Mills or Turner can make a move because of the legally binding agreements they made to limit their positions by a percentage ceiling (RNS last year). The SP continues to drift.

Harry - I see the logic in doubling down. The economy is back at the races and there is substantial investment into infrastructure being made. Using NEXUS as a litmus test suggests FCRM will gain, simply by being there with the capability to deliver. However NEXUS also point towards the emerging unseen overheads dragging on profits and I do wonder whether FCRM has these under control. The last set of results suggest not. Finally contrast the openness and transparency of NEXUS with the closed and opaque behaviour of FCRM - that more than anything keeps me out.

The next set of interim results from FCRM will be pretty critical. Revenue & profits up with less debt has to be the expectation. If it is a continuation of the previous performance then I think you will be looking at a slow decline and tilt towards a death spiral.

The article says it is 2/3 complete. I think not. The AAL (UK) website states the MTS is 37Km long. On 21 July the Liaison Group Forum were informed it had reached 15.6km - so not even half way. Most likely half way by now but still a long way to go.

I think is drifting down because of a combination of factors:
First: Driver shortages and an expectation of higher wages. If you look at Biffa job vacancies there are lots of drivers needed and in some cases a signing on bonus is being offered. The shortage is limiting the business and that will impact on the contracts/bottom line profit margin.
Two: Fuel prices are going up. Whether carbon fuel or electric the prices are rising and this is having an impact for collections and processing.
Three: One assumes the power being fed into the grid from the bio digesters and incinerators will be sold for a premium however they may be on forward contracts and given One & Two this may impact on the margins.
Four: If collections are being slowed/delayed this has an impact on the recycling throughput. Also the supply chain slowdown (as being witnessed in China) may cause less demand for recycled commodities.

My thoughts are it isn't any one of these in isolation. It is a combination - a domino effect - where one element hits onto the next. The last trading update wasn't exactly overflowing with confidence and I suspect the next won't either. Shareholders want to see the dividend reinstated but in the current atmosphere that seems unlikely. Biffa managed to work through the worst of the pandemic but the current problems look to be every bit as challenging.

EOY Report issued today. The RNS states that the final dividend of 0.5p will be paid on 8 October for those on the Register on 27 August (Ex Div 26 Aug). This is contradicted in the EOY Report, Page 25 (CFO statement), that payment will be 'mid October' for those on the share register on 17 September (Ex Div 16 September). In both cases the final div to be agreed at the AGM.

Hargreaves Lansdown have been showing GTLY as Ex-Div since end of Aug. Needs to be clarified by GTLY.

Chris Fraser... now there is a name to conjure with. A very clever man who backed both sides and came out as a winner. I suspect AAL have him on a very tight Non Disclosure Agreement because he knows where all the bodies are buried within the depths of that unholy menage a trois of Sirius - Morgan Stanley - Anglo American.

Why are AAL taking so long to get the mine into production? It can't be lack of cash so are they hesitant over the original design & build specs?

Thanks Wooly. It's extraordinary to think back to those halcyon days when we were told, and believed, the first ore was going to see daylight before the end of '21. Speed was of the essence to pay down the debt - was the plan. Now here we are with hardly a sod turned in anger on the two big shafts. I seem to recall it would be 18-24 months before the bottom was reached after starting so AAL isn't going to see a return for ages.

After getting the mine for a song they are certainly taking their time getting it into production. I still half expect a fire sale to Boulby next door!

My error.... getting the production report and the HY Report mixed up. Ignore my last!

There was a Wordsmith Community Liaison Group meeting last night and generally these include a project update. At the previous meeting in April the following was stated:
"GE responded that he would feed the request for more site images back to the team, and that a project update would be provided in July as part of Anglo American’s half year results."
I am not aware that any update was provided in the HY Results. Has anyone else seen anything?

Raxfactor... That's a good find! Just checked Nexus out and it is a FCRM without the boardroom intrigue:
Utilities - Design, install, connect Gas, electric, water, fibre broadband, EV charging infrastructure to residential developments
Smart energy - Provides EV charging and smart energy infrastructure
Civil engineering - specialist infrastructure & engineering to UK housebuilding and commercial sector

Working primarily in London and the South East. Order book of £301m and growing and a healthy balance sheet. ESmart energy infrastructure division revenues up 155% and orders for EV charging infrastructure up 455%. NEXUS have reinstated their dividend payments - in 2019 dividend yield was 5.4% with a 1.66 cover. https://www.nexus-infrastructure.com

For anyone attracted to FCRM and the EV potential I would suggest casting an eye over NEXUS.

Thanks again Rax

Harry. I'm sorry but I don't see the relationship between smart meters (domestic) and EV charging points (commercial). I agree with Ji that the introduction of smart meters is more much about the control that is given to the utility provider. Even in the SMS report they cite the 'half hourly rate setting capability' as being a game changer.

The whole point of a digital 'smart' meter is that it will allow utility companies to engage dynamic pricing bands. In other words to rack up consumption pricing rates during peak use periods - let's say 0730 to 0930 and 1830 to 2100. They might go to offer cheaper rates 1000-1130 and midnight to 0500hrs - a bit like the old dual rate system.

All of the advertising is encouraging punters to have a digital smart meter to save energy as a contribution toward reducing climate change. I have yet to see hard evidence... anywhere.. that they do this. My house in the USA had smart meters and it made not one jot to the decision to use my a/c system. At some point the utility companies will declare the climate change targets are not being met and the big stick will be dynamic pricing bands - once one company moves they all will - punters on old meters will be similarly held to ransom until they change.

I refuse to have a digital 'smart' meter. FCRM have taken a small bite of this but SMS have made it a core function and they are investing in the technology. Infrastructure for EV charging is completely different - FCRM could be designing solutions to the infrastructure challenges for delivering EV into densely populated areas - areas where street parking is the norm, high rise/low space areas and through to rural communities. They could become the equivalent to 'Openreach' but for EV networks. That is their expertise - design & build - consolidate and be a market leader.

Yes the 99,000 trade? Well you know who it isn't... it isn't a director or anyone associated because the results haven't been published. Could be your knight in shining armour or given your penchant for US card games... the 6th Cav!

Interesting that BIFFA released an RNS today to declare a delay in publishing results - expected tomorrow but now deferred to the 1st June - due to the limitations caused by the pandemic. The point is they published a financial calendar, stuck to it as far as reasonable and informed shareholders of a delay, and the reason why. I'm being mischievous ... looking forward to your report from LSE.

Harry I admire your determination to look for a silver cloud. I reckon you are well within the definition of a 'Conviction Investor'

FCRMs recent contract win from Bayford: 320,000 meter points & 80,000 meter exchanges will return an expected profit of £20m over 5 years. So lets call that 400,000 'units' for the sake of some basic maths. £20m over 5 years will be £4m a year. £4m a year divided by the 400,000 units = £10/unit/year profit on each.

SMS last contract win on 3 March 21. 20,000 meters returning a net £2m annually. £2m divided by 20,000 = £100/meter/year.

I can see why Bayford have thrown FCRM a bone. I had never heard of SMS before you flagged them up but the scale of their digital meter business dwarfs FCRM. I can't help but think FCRM is drifting, or being pulled, away from its core business of designing and building 'big' utility connections and infrastructure - between generating source down to the user - that is in their primary DNA and it is their USP. I can understand forecourt EV being part of that. Installing, maintaining and managing digital meters might produce a small income but it is a huge distraction and they are way behind the big players.

Hands up I am not invested here and I guess I should not comment but I retain a fascination about where this is going. I also want to see if I jumped ship too soon. As you say it is like walking a tightrope.

That's it. I held for a further 10 days so that I was clear of the 8th May through to the following Thursday when I expected a result would most likely to be published. I sold the FCRM position on 17th because it ain't my money that's invested... it's my 7yr old grandsons ISA ... and I am not prepared to carry further risk as previously explained.

the reply was received on 4th May at 10:40hrs...

Hello Mr xxx,

I had a good bank holiday thank you and hope you did too.

The new Board are actively discussing the timing and content of our future RnS announcements and we will advise on this in due course.

Best regards, Craig.

On 3rd May at 12:17 I followed my earlier message up:

Good Morning Craig,

I trust you had a pleasant bank holiday weekend?

Might you be in a position to advise shareholders when the trading update and final results will be released for the last financial year?

The results have now been delayed for 4 weeks and no explanation has been offered to the market as to why this course of action has been taken. I note members of the Board of Directors were trading shares up to 8 March which suggests no results will be forthcoming until 8 May. This seems at odds with your suggestion they might be released toward the end of April. I also note the website financial calendar remains blank.

The actions of Fulcrum Utility with regard to keeping shareholders informed is at odds with what is written in the annual report and on the website. I am left to surmise whether this is an oversight or intentional. I prefer to assume the former but I am beginning to become concerned it is the latter and that the company is choosing to not inform shareholders for reasons yet to be disclosed.

This will be the second year when FCRM has delayed reporting. The first occasion precipitated the loss of the Finance Director and brought in a suspension of dividends. What should I make of this new delay and the declaration that it is to align with other businesses? In the absence of a more meaningful and public explanation it looks like a holding answer and that is even more suspicious.

Kind Regards

The reply was received on 7 April at 11:19hrs. With the benefit of hindsight I believe it is absolutely misleading. I held on to my shares in the belief the results would be published as described at the end of the April. They were not, the SP moved down slightly, and then I sold.

Hello Mr xxx,

Thank you for your email and I hope you’re well.

We’re expecting to announce our pre-close trading update towards the end of April this year. This is a change, to move it more into alignment with how many other businesses report their trading updates, but we appreciate that it is later than our historical reporting.

We will update our financial calendar once we have a specific announcement date confirmed, but please feel free to contact me directly if you have any questions before then.

Best regards, Craig.