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In this instance, the fair value of the equipment based on its commercial use has been assessed at �12m (it is perhaps worth stressing that the equipment was independently valued), so it seems reasonable to me for that value to be used when the equipment was transferred to the joint venture, resulting in an accounting gain for IQE. If they had transferred the equipment at the lower net book value figure, IQE would have been effectively contributing more to the JV than their 50% equity share merited, which would have been a breach of their fiduciary duty to IQE shareholders, if nothing else. So Shadowfall may find that transaction �unorthodox�, but in my view it's simply a mundane application of accounting rules and commercial common sense. 3. IQE�s investment in the CSC JV appears to be swiftly and largely written off IQE received �8 million in preference shares in CSC and �12 million in cash inlieu of this IP transfer. However, subsequent to this receipt it appears that the value of the preference shares and its other equity interest was almost immediately impaired. As far as I can tell, Shadowfall are conflating preference shares and ordinary shares here. They are correct that IQE sold �20m of IP to the JV in exchange for �8m preference shares and �12m cash, but contrary to what Shadowfall claim, the �8m preference shares have not been written off by IQE. Look at the FY16 group accounts and they are shown as �Financial Assets� within �non-current assets�: 5a76f6ee595f8IQE3.png Further details are provided in note 15: 5a76f72f86a5cIQE4.png Note in particular that last comment about the carrying value (i.e. the �8m figure) representing the estimated fair value. So when Shadowfall refer to write offs, they appear to be referring to the ordinary shares held by the IQE subsidiaries in the JV. These have nothing to do with the payment for the �20m of IP, but are instead a simple application of the �equity method� of accounting for joint ventures, as required by the accounting standards. This is mentioned in the accounts of the IQE subsidiaries, from which Shadowfall have quoted extracts in relation to the impairments, but they seem to have missed these additional disclosures, e.g. in the accounts of IQE (Europe) Ltd: 5a76f7acca794IQE5.png The reference there to �the group accounting treatment� simply means the �equity method� of accounting for joint ventures, as explained in more detail in the IQE group accounting policies note: 5a76f80e3de4eIQE6.png So the combination of the losses incurred by the JVs and the unrealised gains on transactions between IQE and the JVs gives rise to the write off, as required by the accounting standards. This is quantified in note 27 of the group accounts: 5a76f8bba40efIQE7.png
I�ve not looked at the Singapore situation as I don�t have those JV accounts to hand, nor am I attempting a complete refutation of the report, but having read it I would make some specific observations. Apologies for the length of this, I have a rather geeky fascination with bear reports like this! As always, DYOR etc., I can't confirm there are no errors in what follows. 1. The joint venture's contribution to IQE's cash flow In 2015, IQE group companies appear to have benefited from �7.7 million in net cash flows from the CSC JV to IQE group companies. In 2016, the net cash flows from the CSC JV to IQE group companies appears to be �7.0 million. Their calculations behind these numbers seems to be as follows: 5a76f51214f2aIQE1.png That�s fine as far as it goes, but it�s only a partial analysis and it certainly doesn�t reflect the total impact of the JV on IQE�s cash flow. It ignores the opening debtor and creditor balances, as well as the other reported transactions between the two entities, namely the sales by the JV to IQE, other amounts recharged by the JV to IQE (and vice versa), the plant and machinery sold by the JV to IQE and the loan and interest payable thereon. Add those additional elements in and by my reckoning the impact on IQE�s free cash flow is as follows [table edited to correct an error]: 5a7700de0bc41IQE2.png So across the two years the impact of transactions between the JV and IQE was to increase IQE�s net cash flow by �9.1m, some distance short of Shadowfall�s �14.7m figure. That impact is still sufficient to turn IQE�s reported free cash flow in 2017 (of �2.6m) negative, but only just. 2. Transfer of assets from IQE to CSC Ltd �In establishing the CSC JV, IQE is reported to have contributed equipment with a market value of �12 million... The equipment that IQE contributed to the CSC JV appears to have been marked up in value from its net book value (NBV) by a factor of c. 4.7x the NBV previously held by IQE subsidiaries. �we find it somewhat unorthodox that the group transfers assets, seemingly with a net book value of less than �3 million, which are marked up in value, resulting in a gain on disposal for IQE of nearly �5 million.� The implication seems to be that the increase in transfer value is part of a pattern of puffing up IQE�s profits by using the JV as an off balance sheet vehicle. I think that interpretation is false. Accounting standards require fixed assets to be valued at cost less any provision for impairment (cost less net realisable value, in old terminology). Companies can�t bump up the value of fixed assets in their books just because their value in use is greater than their cost. You could quibble that IQE�s depreciation policies were overly conservative if the equipment�s value in use
I�ve not looked at the Singapore situation as I don�t have those JV accounts to hand, nor am I attempting a complete refutation of the report, but having read it I would make some specific observations. Apologies for the length of this, I have a rather geeky fascination with bear reports like this! As always, DYOR etc., I can't confirm there are no errors in what follows. 1. The joint venture's contribution to IQE's cash flow In 2015, IQE group companies appear to have benefited from �7.7 million in net cash flows from the CSC JV to IQE group companies. In 2016, the net cash flows from the CSC JV to IQE group companies appears to be �7.0 million. Their calculations behind these numbers seems to be as follows: 5a76f51214f2aIQE1.png That�s fine as far as it goes, but it�s only a partial analysis and it certainly doesn�t reflect the total impact of the JV on IQE�s cash flow. It ignores the opening debtor and creditor balances, as well as the other reported transactions between the two entities, namely the sales by the JV to IQE, other amounts recharged by the JV to IQE (and vice versa), the plant and machinery sold by the JV to IQE and the loan and interest payable thereon. Add those additional elements in and by my reckoning the impact on IQE�s free cash flow is as follows [table edited to correct an error]: 5a7700de0bc41IQE2.png So across the two years the impact of transactions between the JV and IQE was to increase IQE�s net cash flow by �9.1m, some distance short of Shadowfall�s �14.7m figure. That impact is still sufficient to turn IQE�s reported free cash flow in 2017 (of �2.6m) negative, but only just. 2. Transfer of assets from IQE to CSC Ltd �In establishing the CSC JV, IQE is reported to have contributed equipment with a market value of �12 million... The equipment that IQE contributed to the CSC JV appears to have been marked up in value from its net book value (NBV) by a factor of c. 4.7x the NBV previously held by IQE subsidiaries. �we find it somewhat unorthodox that the group transfers assets, seemingly with a net book value of less than �3 million, which are marked up in value, resulting in a gain on disposal for IQE of nearly �5 million.� The implication seems to be that the increase in transfer value is part of a pattern of puffing up IQE�s profits by using the JV as an off balance sheet vehicle. I think that interpretation is false. Accounting standards require fixed assets to be valued at cost less any provision for impairment (cost less net realisable value, in old terminology). Companies can�t bump up the value of fixed assets in their books just because their value in use is greater than their cost. You could quibble that IQE�s depreciation policies were overly conservative if the equipment�s value in use
That thought must cause shorters some sleepless nights. I'm not sure Apple would want the other bits of IQE though.
Can't see this drop as anything other than a tree shake as fundamentals/growth prospects seem solid.
How do the RNS reports affect the holdings/short position?
on the 25th. Maybe sold to shorter.
Peel Hunt today downgrades its investment rating on Central Asia Metals PLC (LON:CAML) to add (from buy) and raised its price target to 345p (from 315p). Anybody have more info on why they downgrade but increase target price?
Barclays still hasn't paid me!
thanks Artman
Has anyone received a dividend payment from Barclays? I'm still waiting.
Has anyone received divi yet?
I just spoke to XLM pr. He said problem is with registrars bank and that his view was "bank acted very unprofessionally" in not notifying XLM of issue in a timely manner. Also see RNS today XLMedia (AIM: XLM), a leading provider of digital performance marketing services, has been notified that on 18 October 2017, Ory Weihs, Chief Executive Officer, purchased a total of 63,508 Ordinary Shares at an average price of 157 pence per share. Following these purchases, Mr Weihs now has a total beneficial interest in 3,940,120 Ordinary Shares, representing 1.93% of the issued share capital of the Company.
Any news on payment?
It was only 7.8 per cent. taking into account the interim dividend of 6.5 pence which will be paid on 27 October 2017.
Central Asia Metals PLC (CAML or the Company) is pleased to announce the results of the underwritten conditional It was only 7.8 per cent. taking into account the interim dividend of 6.5 pence which will be paid on 27 October 2017.placing of new and existing ordinary shares of US$0.01 each in the Company (the Placing), announced earlier today. See below. A total of 49,150,000 new ordinary shares (the Company Placing Shares) and 10,605,875 existing ordinary shares (the Sale Shares and, together with the Company Placing Shares, the Placing Shares) of US$0.01 each in the Company have been conditionally placed by J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) (J.P. Morgan Cazenove) and Peel Hunt LLP (Peel Hunt), acting as Joint Bookrunners, and Mirabaud Securities Limited (Mirabaud) acting as lead manager at a price of 230 pence per Placing Share (the Placing Price), raising total proceeds of approximately £137.4 million (approximately $186.6 million) (the Total Proceeds). The Total Proceeds consist of approximately £113.0 million (approximately $153.5 million) of primary proceeds for the Company (Company Proceeds), and approximately £24.4 million (approximately $33.1 million) of secondary proceeds to CBH Europe (Secondary Proceeds). The Placing Price represents a discount of 9.6 per cent. to the closing price on 1 September 2017, being the last date before the Company's shares were suspended from trading and a discount of 7.8 per cent. taking into account the interim dividend of 6.5 pence which will be paid on 27 October 2017. The Company Placing Shares represent approximately 43.9 per cent. of the Company's existing issued ordinary share capital. The Sale Shares represent 9.5 per cent. of the Company's existing issued ordinary share capital immediately prior to the issue of the Company Placing Shares. In aggregate, the Placing Shares that have been conditionally placed represent approximately 53.3 per cent. of the Company's existing issued ordinary share capital immediately before the Placing.
Also added 10K at 241.5 Plenty of cash good prospects and outside chance of takeover bid. Also dividend good and increased
Could be a long wait. See RNS The Directors will make further announcements in the coming weeks if, and when, they become appropriate.
What do the panel think of Elliott Value unlock plan and claim it could boost value circa 50%?
I can't find any explanation.