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Yeah, it’s kind of like driving past a car crash. You know you shouldn’t look because what you will see is pretty horrific, but you just can’t resist.
Well put Jimzi "Historic accounting and tax accounting are different". The capital reorganisation was just an accounting/legal technicality to reclassify the share premium account as distributable reserves. It does not affect historic tax losses forward.
Ricky, ORPH can pay a dividend tomorrow if it wants. The capital reorganisation has created enough distributable reserves to allow dividend payments even if no profit is reported for 2021.
Regarding tax losses, the Open Orphan group had £18million in retained loss at the end of 2020. I would think that most of this is available to offset any tax on future profits. The capital reorganisation merely converted the share premium account into distributable reserves - it shouldn't have any impact on the ability to utilise tax losses forward.
Hi Elrico, I don't think too many of us will be able to make it to Leicester for the event. Will there be a livestream or recording available for those who can't attend in person?
Not sure about H2 revenue but I predict a H2 profit of £8.5million. This would create distributable profits of €38,388k as disclosed in the RNS of 13/04/21.
Not necessarily Christo. ConserV and the Prep minority shareholder will also want to grant freebies to their top management. It’s quite possible that they will agree with CF to do this in proportion to their respective weightings.
Green, I agree that the numbers for the first spin off are not massive. We might be looking at around £300k in free shares for CF which could be looked at as one year’s “proper” salary for his management of the ORPH group. My main point was that it’s a bit ironic for CF to be banging on about his minuscule remuneration package and then awarding himself free shares which, if this precedent is repeated in subsequent spin offs, could be worth tens of millions.
Padrock is getting a ferocious kicking here but he does raise a valid point. At every presentation over the last year (apart from yesterday) CF has highlighted how little he pays himself and Leo Toole - around £120k total package each if I remember correctly. No share options or free shares, if ORPH staff want shares they buy them on the open market just like us. But now it appears that he is awarding approx. 5% of the first spin off (and maybe the next three) to senior management with himself getting maybe two thirds of this 5%. If predictions of a billion dollar value for the spin offs come good then that’s $50 million in free shares for management with CF getting $33 million.
Don’t get me wrong, CF has done a fabulous job for all shareholders and I think he should be remunerated properly for this. With over 6% of the shares in ORPH and spin offs he doesn’t need any further incentive to maximise profits and shareholder value. Therefore, in my opinion, the appropriate way to normalise his remuneration package would be to significantly increase his basic salary. Maybe £500k per annum would be the right level?
However this pans out, I don’t think we’ll be hearing any more from CF about how frugal he is with remuneration for senior management!
Eh, jonesrichard, you do realise existing Hellenic Dynamics shareholders would own the vast majority of shares in the new enlarged £50 million company? I’d say at best the SPC shareholders would get the equivalent of £10 million - a uplift of approx. 50% on the current share price, not 10 times!
PadRock, there's no point trying to engage with Earache. He's a buffoon who has been clogging up this board with unmitigated piffle for a while now. Best to ignore or filter him and he will eventually go away.
Lankylad, I’m not expecting much, if any, of a cash dividend will be paid for the foreseeable future. CF might throw a 1p or 2p per share bone at us just to keep some investors happy and maybe entice a few income funds (like Invesco!) to take a position in ORPH. All I was trying to do was use the reported distributable profits figure of £38,388k to calculate ORPH’s profit for H2.
@Crusader5, you are correct - the RNS doesn’t specifically state that the £38,388k retained earnings is at 31/12/20. I was assuming that the Court application to confirm the Reduction of Capital would be based on the audited accounts at 32/12/20. Does anyone know if a Court can consider an application based on unaudited management accounts?
Regarding the possibility of ORPH generating £8.5m profit in H2, I will leave comment on that to wiser heads. I don’t know how much ORPH expensed in H1 developing the COVID human challenge study model but, with the signing of the UK government contract, that could all be reversed in H2 and would flow directly to the bottom line.
Any comments on my calculations Lankylad? Share Premium account is very relevant when it is converted into distributable profits, as approved by ORPH shareholders today.
Is it possible that ORPH have already indirectly published their 2020 results?
£44,495k Share Premium at 31/12/20 per spin off RNS 13/04/21
(£39,388k) Less Distributable Profit 31/12/20 per spin off RNS 13/04/21 (after cancellation of Share Premium account)
(£5,107k) Implied Retained Earnings as at 31/12/20
(£13,692k) Less Retained Earnings 30/06/20 per ORPH H1 results
£8,585k Voila - ORPH’s profit for H2 2020
(£6,490k) Less H1 loss
£2,095k Overall profit for full year 2020
Good morning Earache, this is definitely my last post on the subject. I’m sure the BB has had enough of our debate by now!
Our second discussion relates to the ability of an insider (CF) to escape the long arm of the regulator by first placing his personal investment funds inside a limited company. I’m not going to be able to convince you that you are wrong without engaging a high powered battalion of lawyers so we’ll have to agree to disagree on that one.
However, on our first point you are 100% wrong, bigly. Mathematics doesn’t lie and you can’t argue that 1+1=3. A hVivo shareholder had something worth 11.62p the day before Open Orphan offered to buy the company. In Jan 2021 they had something worth 64.22p. That’s it, end of story. You are only embarrassing yourself with incoherent rantings trying to convince yourself that black is white.
Regards, Rod.
It’s getting silly now. Your last post is contradictory but let’s assume that we are agreed that you now hold 2.47 ORPH shares instead of 1 HVO share. There’s a really big hint in the offer RNS “Under the terms of the Offer, hVIVO Shareholders will be entitled to receive 2.47 New Open Orphan Shares for every one hVIVO Share”. That’s the numerical difference in old shares v new shares. Would you care to put a monetary value on those 2.47 ORPH shares if, say, a single ORPH share was trading at 26p in Jan 2021?
Thanks for the reply Earache, let’s try and simplify this, shall we?
Dec 2019 You have 1 HVO share which you can sell for 11.62p
Jan 2020 You get 2.47 ORPH shares in exchange for your 1 HVO share
Jan 2021 You sell your 2.47 ORPH shares @ 26p each = sales proceeds 64.22p
Profit to you is 52.60p or 453% of your original holding 11.62p
All clear now?
Ok Earache, let’s tone down the personal stuff and continue the debate, shall we?
Firstly, you state that my post on HVO return from the ORPH takeover was wrong. I set out my calculations so would you mind pointing out where I was wrong?
Secondly, my posts from yesterday were not attacking CF. In fact, I’m in love with CF and I think he’s going to make me very rich! I was merely pointing out that using a limited company as a vehicle for his personal investments would not protect him from pesky regulators. He has recently been bemoaning the fact that he is currently not allowed to buy more shares in ORPH due to his insider status. If your wizard scheme was so foolproof why doesn’t he just use Raglan to beef up his ORPH shareholding?
All the best, Rod.
I’ll leave it there so, Earache. No point in feeding the troll any more. Have a great weekend!
Not sure I agree with you Earache! I don’t know the exact structure of Raglan Road Capital but CF’s wife is the same as CF in the eyes of the regulators and it is probably safe to assume that between them they control any of the company’s investment decisions. Therefore, Raglan Road Capital is CF when it comes to enforcement of insider trading and conflict of interest regulations.