focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Just to go over the sums (again) here. We are currently sat at circa 50% of total prodcuction capacity and growing. $8m per year profit at that level. At an extremely cautious P/E of 10 which takes no account of further sales growth which is happening while we speak (were only 6mths into a 100+ yr project remember) or the other projects HMI have or the £9m they have in the bank. the SP should/could easily more than double from here in the near-term. That’s why we are all here... there are some frustrations/concerns/risk as with every investment, but now is not the time to lose patience or dither if you aren’t already on board. Time to get on the bus and stay on it. The deramping army are consistently and persistently negative with no balance. To be frank, there’s no a great deal to be negative about here. I honestly have no idea why you would be selling out st this point... unless of course you had something even more spectacular to out your money behind. Proven market for product Proven sales point High margin Proven BoD with ‘skin in the game’ Risk now relates to expansion speed and macro-economic factors - re-risked on product/sales & production
Still feels to me that we need to hear more about the purpose of the £9.7m placing - I still don't understand what it was for.... further expansion / current expansion / new MAPA requirements / cash burn? The original RNS was too vague and the Doc Holliday interview gave no more insight. As an existing shareholder, a statement to clarify the 'plant expansion' would be much appreciated - is it the plant expansion we are already on with? (i.e. 320ktpa) or something beyond this?
It's great that institutional investors and BMc got stuck in and put their money behind the company but I'm left a little perplexed, not really understanding the dilution given HMI is now 'cashflow positive'.
Yes - consolidation. The SP you would expect based on its fairly static 4p per share under the old cap structure would be 80p a share, so SRB price has lost some ground on the back of this - see previous discussions. The very sad RNS released may also have something to do with the weakening also.
To be expected - one week investment with a 10% return... If you have the opportunity, hard to turn down. Of the £9.7m new shares the encouraging thing is that we know where about £3.5m of that has gone (Miton & Directors) and that is all LT shareholding. The remaining £6m will be a mixture but hopefully most will be in it for the Long-term to make some serious gains rather than just a quick 10%.
Interesting but unless I am missing something no further insight beyond the RNSs. I would have loved to understand the "plant expansion" and whether the current plant investment was insufficient to deliver 320ktpa and the placing was required to finish the job off, maybe additional MAPA requirements?! OR if it is a war chest to go way beyond the 320ktpa, double production capacity and smash it requiring loads of additional production and sales investment? I know there is a chance for investors to be too involved in the detail but this issue feels fundamental as it is the primary reason given for a £9.7m raising and a significant dilution for existing shareholders - so I'd like to be clear. BMc has in the past indicated that HMI wouldn't require further placings, that has obviously changed - so it would be good to understand the rationale at a slightly deeper level. Even if that is the admission that "MAPA needs us to upgrade our production facilities"... cool with me - an unexpected £9.7m investment and HMI's numbers still stack up, I guess I am just missing the purpose of the £9.7m raise (beyond working cap and general additional resource) when BMc has stated that we are now 'cashflow positive'. Obviously BMc still thinks its worth chucking £770k at, so you'd hope he's pretty happy with the current SOP. If I'm getting the wrong end of the stick happy for someone to set me straight, so thoughts and comments welcome.
Solid buying after a £9m placing is a resounding endorsement of HMI and it’s prospects. The 50ktpa isn’t even from one of the 3 majors trialling KPfertil. Still got 2 massive coffee co-Ops and Veloso to try and seal big deals with. Not to mention local and small scale buying expansion. It’s all looking rosy.
Anyone know of any comms around this? Usually we get an BMc or MH interview on Vox or similar for something like this... Would be good to know if the "further expansion" means we get an increase to 320ktpa or if it is simply paying for what we have already - which is less good...
Settlement of the placing to be concluded in day (concludes at 4pm latest) so institutional investors are all lined up and good to go. for what it’s worth I would therefore expect share price to be either where it is now or higher. 27% dilution offset by 27% rise for extremely positive sales news, further plant expansion and clarity on working capital etc. Seems sensible. I’m pleased this news all released at once, it shows an openness.
Harvests profit margin at 80% is more than big enough to have some flex should that be required. honestly though, this just seems like utter made-up nonsense to suggest KPFertil has no market - Aggrecerrado and Veloso seem to think differently... It really is a sad situation if someone feels the need to mislead people and lie and I like to think the best of people.... so I’d really appreciate some properly substantiated claims about all these other products that farmers can apparently obtain with ease.
USD is relevant in the sense that the vast majority of product is currently imported and therefore a dollar denominator is in most cases valid for comparison - sadly farmers lose out as the currency devalues, another good reason for local production. I don’t really mind though - comparisons in either currency are fine for me. I’m trying to work out of there is any truth in the “ KPFertil is expense when compared to other products” statement which seems bizarre given the evidence in the public domain at present.
Bopd, any chance you can find out what products are available cheaper than KPFertil? All the noise here is that it is substantially cheaper than the competition so I’d be grateful to see evidence to the contrary... otherwise it just feels like a quote from one guy that flies in the face of a significant amount of opinion that points the other way. Genuine Q and not trying to be a smart-ar@e - thanks :)