The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
ANDREW LOCKLEY | 19 OCTOBER 2017 Will vanadium be lithium�s nemesis? Recent government announcements have shown it�s beyond doubt we�re in the middle of a dramatic energy storage revolution. The Tories have announced that the electricity market is going to be totally shaken up. This market reformation will permit domestic-scale demand management, and storage. Even the ever-so-sensible IKEA is now flogging home batteries. In a decade or two, you can look forward to driving an electric car, which could have a two-way flow of energy to the grid (if Nissan gets its way). Your car will use its hefty battery to earn you cash, balancing the grid as it charges. Inside your house, your appliances will switch on and off, to take advantage of moment-by-moment fluctuations in energy prices. You can play this batteries revolution � and today we�re speaking to Scott McGregor of redT energy. It�s a very interesting firm, because it�s one of the only companies that I�ve had consistent pressure from readers to feature. When you couple this investor interest with the firm�s interesting technology, and great timing, it suddenly looks like a very interesting investment opportunity. I�ll hand you over to Scott, to explain more. AL: Let�s kick off with your personal story, Scott� SMG: Before getting involved in the renewable energy space, I acquired an MBA from the London Business School; a Bachelor of Economics from Monash University, Australia; and qualified as a chartered accountant through PWC. Before joining redT I worked across a number of sectors, including the environmental, mining, finance and technology industries. These roles have involved advising leading corporations in North America, Asia and Europe, and have included finance and development roles for Rio Tinto, Merrill Lynch and Skype. In November 2015 we chose to change the name from Camco Clean Energy to redT energy, to reflect the company�s core focus becoming the commercialisation of its energy storage product. I�d previously overseen the establishment of Camco�s clean energy project business, focused on biogas and solar projects; the expansion of its carbon credits business; and led the development of the energy storage technology � now the focus of redT energy. In summary, I transformed the business, from just being Camco, to being a market leader in the energy storage space. Now, I�m CEO of redT energy. AL: Please can you tell me a bit more about redT energy? SMG: redT energy develops and supplies durable and robust energy storage machines. This is based on proprietary vanadium redox flow technology for on and off-grid applications. This technology is centred around vanadium�s ability to hold different amounts of electrical charge. Pumps and membranes are utilised to separate or bring together differently charged vanadium solutions, charg
Hi Pinecone, Never could think outside the box doh. Thanks for the google suggestion which I have just read. Mis-quote or not there is an amazing future for Redt if the production and finance is under control. My feeling is that the acceptance and understanding of flow machines is now ramping significantly and Redt will not be able to transform from an R&D company into �200m manufacturer fast enough to capitalise on it. Yes, I know they have 3rd party manufacturing but that will never allow them to compete when and if their competitors catch up. I mean nothing in a negative way because from what I understand their system is the most advanced and lowest cost in the world today. I believe that ultimately the cash will run out very quickly if the ramp is severe. Whether or not Jabil remain their foremost manufacturer they will expect Red to pay much faster than Red will be paid and that leaves a black cash hole to be filled. Great for investors if they are bought out but another great British company going overseas? All IMHO
mc5a: Thanks for posting the link but I am not a subscriber so cannot read. As you say maybe some mis-quoting and clearly the market has not responded in a positive fashion. Jabil are the largest contract manufacturer in the world but they would struggle to meet the numbers if Pincone is correct in his extrapolation and a takeover by a more established company would seam on the cards.
Pinecone: I too believe the softly softly approach has changed very recently, probably since the Australian order announcement or just before. However not sure I have seen any reference to his claim of 'hundreds of millions' of units so would you please provide a link to this article. Thanks S
Sorry meant bid recovers
Just as easily a big buy at a negotiated price. Soon see if the offer recovers somewhat by close.
Certainly seams an odd week with low codes and low to little volume. We are well off of the radar of PI's for sure.
Must say it crossed my mind too. If it happens I may become a believer!
This message was posted by Playful on ADVFN this morning and I must say having read it all bodes well for the future. Trading update presentation... APC lighting has a substantial pipeline at advanced quote negotiation stage with 12 FM / property management companies. A year long strategy to achieve preferred supplier status with leading FM companies has resulted in the signing of preferred supplier agreements (PSA) with 3 of the largest global real estate services firms. What's attractive for me with our lighting division is the 5.5M quotes in progress. Looks like the spade work has been done in getting on the PSA acceptance list and now we should see the benefits. hTTp://apcplc.com/hideout-app/app-uploads/2017/09/APC_InvestorPresentation_Sept17_CP.pdf
L123: Does vanadium or some type of hybrid possibly have some future part to play in the automotive industry? Thanks, S
I have heard that there is a broker note out which values APC at �12m or 9p/share but I cannot verify this. Looking again at the unaudited results it is very clear that the decks have now been well and truly cleared and any further increase in revenue should feed directly to the bottom line. Assuming this to be the case it is quite feasible that with the new product lines reported we could see a healthy jump in profits this time next year. The trading update given in April (interim report) indicated extremely strong growth in component distribution but judging from the revenue figure given last week this does not appear to have been shipped in the second half; either that or the LED lighting business has severely declined. If the LED business is stable then we must be in a very healthy backlog situation which is why the broker is giving a higher target. All IMHO
Understand your reasoning as have been there too. Three major positives: 1 At last the management are obviously not afraid to talk to outsiders in a positive light. 2 Strong buying from smart investors. 3 Returning to roots and what they are good at.
Where is growth coming from? As mentioned APC are an established company with c.£18m turnover per annum via a number of longstanding suppliers and end customers. With the cost base realigned (£2m costs removed on annualised basis) the company is now profitable & indicated during its release of H1 2017 results that March 2017 bookings stood at £2.1m and hopefully operational gearing should now be emerging. The first signs of the growth strategy emerged in the RSN Reach released last week with the appointment of a Business Development Director & securing 3 new distribution agreements in RF & Microwave and also High Reliability products. Worth mentioning some other snippets, such as their launch of APC Smartwave last year to provide Internet of Things (IoT) products. APC also highlighted via their web site the growing requirement of companies to meet MiFID II legislation by the Jan 2018 deadline & the increasing focus on subsidiary APC Time's relationship with supplier Meinberg to meet the requirements. HTTP://apcplc.com/news-posts/apc-time-attending-mifid-2017/ Forthcoming trading update? I believe that the company may issue a trading statement in the near future in respect of the 2017 year end which occurred last week (31.08.2017). Any update will hopefully confirm the progress highlighted in the interims, indicating the business both stable & profitable, while confirming the growth drivers in 2017/18. If APC can drive growth, maintain gross margins of c.35% & generate cash, then with operational gearing kicking in I don't believe it fanciful to think that APC could generate profits of £1m+ EBIT moving forward. Such performance would bring the company into sharper investor focus, although it looks as if a number of focused investors have already taken positions. Well, I hope that proves to be the case!!! Disclosure I have a modest holding. Please DYOR Kind regards, GHF
I've subsequently spoken at length with APC & v impressed with CEO Richard Hodgson who I believe is implementing the steps that will lead the company into a period of sustainable profitable growth. What do APC technology do? "APC Technology Group PLC provides design, specification and distribution of specialist electronic components and systems, lighting technologies and connectivity products to the defence, aerospace, industrial, real estate, logistics and healthcare sectors." They describe themselves as a “design in” distribution business focused on the high end electronic components sector alongside a division delivering LED lighting. HTTP://apcplc.com/ In English, my understanding is that APC's engineers engage with their UK customer base to "design in" the products that are supplied by a distribution base that comprises companies from throughout the world. We are talking product lines where the, "end-use equipment is operating in extreme conditions or is running applications where component failure would be catastrophic." Think power components for the military or aerospace or....the ExoMars Trace Gas Orbiter launched from Kazakhstan by the European and Russian Space Agency in 2016 that used the DC-DC converters supplied by APC. HTTP://apcplc.com/news-posts/apc-hi-rel-modules-on-exomars-trace-gas-orbiter/ The companies (suppliers) that APC distribute on behalf of may be small in size or operate in niche markets which negates the need for a UK distribution & admin base. In other words, APC provides a number of value-added functions that not only includes the supplier with an end market to sell into, but also the addition of value added services such as the modification or design-in of the products supplied to meet the end customers requirements. It may also include the provision of an admin, importation & logistic function to assist the supplier e.g. the UK defence & aerospace market is highly regulated & requires accreditation and certification which APC can progress & gain on behalf of the supplier. Worth mentioning that the company may be a beneficiary of BREXIT as the complexities of dealing with the UK end user market of the UK may be more problematic for ROW companies without a UK base or specialised distributor like APC In the 2016 Annual Report the company indicated exclusive distribution agreements with over 60 manufacturers of electronic components and systems for the UK market. This included components for flight critical systems, power distribution in civil aircraft, high voltage components for power supplies, custom filters for harsh environments, satellites and space exploration, transportation and hybrid vehicles and extreme temperature oil and gas components. The following presentation from April 2017 provides a summary of the APC proposition & their addressable markets in p4 & p5. HTTP://apcplc.com/hideout-app/app-up
Glasshalfull5 Sep '17 - 21:06 - 680 of 694 5 0 EDIT - A paragraph went AWOL concerning the recent management teams investment into the company while copying draft write-up over onto ADVFN. Now included. APC Courtesy to mention that I've been a buyer in APC. It's been harder to find value in the market recently as momentum trading appears all the rage, but I've been suitably impressed with the drive & ambition of the new management team & hope this proves to be a rewarding long term investment. Background APC is a well established company of over 35 years. The share price reached the heady heights of 68p in November 2013.... & it's been downhill ever since, with the shares bouncing off 5.75p in June 2017 - fingers firmly crossed this was the low! This followed a couple of placings to shore up the balance sheet over recent years with the current share price of 6.75p equates to a market cap of £8.8m. At the end of H1 2017 net debt stood at £2.9m at (28.02.2017) for an EV of £11.7m. The company had plenty of headroom as the £2.9m net debt comprised £2.5m drawn on invoice finance facilities (£6m facility), £0.6m of loan notes (due July 2018) and £0.2m cash. While I would prefer the balance sheet to be stronger, the new team appear to have turned the business around & have slashed costs by over £2m on an annualised basis. Indeed, the H1 2017 results marked the first glimpse of a new dawn that followed change amongst most managerial positions. This concluded an extensive 18 month restructuring period which included the disposal of a loss making business & progress on refocusing the company. H1 2017 results highlighted the company delivering a pre-exceptional operating profit of £0.4m on turnover of £8.3m. Gross margin was 34% with net debt reduced by £0.3m. So, why invest now? Well apart from the first sign of a company turnaround & buying at what I hope is close to a low (share price is on its knees) my attention was first drawn to the stock when I noticed that a well respected PI had taken a notifiable stake in the company (>3%). I also noted the share register included notifiable holdings with the likes of Bob Holt at 3% (Chairman of Mears Group); Mark Blandford via Rockridge Investments now at 11.4% (Sportingbet founder); the savvy small cap investors Hargreave Hale now at 16.6% & Octopus at 6.6%. Quite an enviable list for any small cap company. The CEO, Chairman and some other notable investors recently subscribed for shares in the company. They invested £125k & £250k into APC during March & May 2017 respectively (at 6.75p), thus showing their confidence in APC while boosting the balance sheet at the same time. I've subsequently spoken at length with APC & v impressed with CEO Richard Hodgson who I believe is implementing the steps that will lead the company into a period of sustainable p
Or pension fund? Whatever the reason I do not believe it signals anything to be concerned about. Did you guys see the excellent write up last week on ADVFN by Glasshalffull? If not worth a look. Very positive and straight from the horses mouth!
The jury is out on the codes. Sometimes whether by coincidence or fact they do ring true but I believe that the brokers can sell any amount of this stock to the larger holders hence the prices way above the bid they are paying. Thanks for posting the chart Fred.
Share your frustration but a lot of those RNS' last year were related to placings and their related holdings announcements. Also a contract win but the updates this year have indicated improved trading in the bread and butter distribution division so not too gloomy. I find it extremely frustrating that whatever the results this year we have nothing to judge the performance on. The house broker and advisor has issued nothing and therefore I wonder what sort of advice he is giving to management. The only sign of hope I see is that there is no major seller and the companies largest shareholder is still adding. Sadly you are probably correct in suggesting that we will wait until the year end for news and I see that being the case for many years to come unless there is a policy change. The market in general seems to have lost interest and unless this is quickly addressed it could be a very long road back.
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Agree with Fred and those 6.375 trades are definitely buys. Can understand you selling dactions if you consider you have better options but think APC has hit the bottom. Why else would an educated investor like Mark Blandford and the Chairman be buying? With no analyst following the stock I doubt many PI's will be buying unless gamblers and cannot see much happening to the SP until the company get an analyst on side. GL