The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Perhaps more importantly, why would Van Der Linden like anything from Wood at all if the review had gone badly? Unless this is a bluff to the market, I’d say that’s a pretty good signal about the result of the ‘Wood work’. Great spot Rishi.
Thanks for the lovely debate guys. Certainly has helped me get a bit more up to speed. If there’s one thing we can all agree on it’s that it’s going to be fascinating watching the SP over the next two weeks. Admission to trading on Tuesday, so they will presumably be in people’s accounts by the end of the week.
Potent Force, the one question I have for you is this, why would multiple investors invest £7m in a company that was about to disappoint in the way it did over the 2016-2019 period?
Those investors and optimistic investors on here are banking on the future being different from the past. And they’re right to be as AEG has:
1) Broken ground at the new factory with all equipment delivered to site,
2) got all the relevant permissions and permits lined up,
3) got the coalswitch order from Pacificorp,
4) sold the licence in Canada (may end up being worth twice the MCAP on its own)
5) raising £7m on top of confidence shown by the majority of CLN holders and
6) rapidly rising revenues at the lumber business.
The evidence pointing to a brighter future is hard to discount.
A nice lift to 1.4p. Thought we’d have to wait until all the new shares were admitted to trading from Feb 23rd. Such a good sign that buyers will gobble up anything which gets sold after admission. Let’s hope it stays here through to end March and then heads North as the factory gets commissioned.
https://twitter.com/gplcae/status/1361963716951093248?s=21
Exciting times. Just so I better understand the history, does anyone here fully understand why they had to move from Utah to Lumberton? That seems to have put commercial progress back by 2/3 years.
With the placing shares probably now all admitted to the market, this should be bottoming out. Could be a good time to be in the share over the next few weeks.
Bananaman, that’s an issue in terms of air pollution but less so carbon because they’re using waste material which would otherwise emit carbon as it degraded (albeit more slowly). It might also play role protecting against forest fires as it makes the scrub commercially valuable. In an ideal world, with high enough carbon prices, they would tag on CCS and turn the end to end process into a carbon sink.
Preefty, I’m in (and excited about) AEG too. The fundraise de-risked the company (as well as showing confidence amongst its institutional backers) and it’s reaching an inflection point this summer with its ‘coalswitch’ product aiming to substitute coal with biomass from forestry waste. Potential big green impact and mixture of rapidly growing wholly owned factory and licensing revenue.
Spev. Maybe an SPV with a project funder? Or debt or equity. Unless they sign a lot of licences before then it’s hard to see how they could do it without new finance.
Thanks Aladdin! Hadn’t seen that. Balance sheet and P&L look great now. Projected Ebitda in 2023 (when the main factory revenues kick in) is what will drive value for shareholders.
Let’s hope so. Feels like it could be laced with opportunity.
That’s a great market to get a foothold in! Let’s hope it’s not the sole deal.
We'll get there and you'd deserve it after holding a risky share for a while. Good to see upward pressure this morning.
I'd guess late February through March will be when the sustainable move happens but who knows. Totally agree that it's a very exciting share to be in at the moment. I'd really like to understand how they expect to solve the problem of the capital intensity of new coalswitch factories. EQT do it by setting up SPVs with partners for each new facility and then they can take a proportion of the equity in each project according to how much work they've put in and how much capital they want to absorb in each. Licensing is great but it does mean you miss out on profits so a lot depends on how many of these factories you need before you effectively start competing against your licensees. The last thing we want is to fund more of the big factory costs by diluting current AEG shareholders when you could raise capital through SPVs and/or licensing.