Member Info for Scoobydoo321

A reminder of what was stated in the Outlook per Interim Results released on 7/12/20. I'm sure LTH know the BYOT story more than me.
Seems that 2 months plus AFTER the end of H1 (30/09/20), the management are very confident of the outlook, i.e. does NOT sound as if the management are expecting to simply "meet" market expectations.

Outlook
This was an extraordinary six months and we think the post COVID-19 world will look significantly different compared to pre-COVID. Notwithstanding that vaccines seem to be close to readiness, we expect sales to settle at levels significantly higher than pre-COVID, and our order book remains consistently higher now than at any other point in our history.

Our commercial opportunity has certainly increased in magnitude and continues to be supported by the changes we have been talking about for many years - increasing global demand, reduced supply as regulations bite and resultant industry structural change. However, we can now add to that a new awareness of the damage viruses can do if uncontained, and an increasing understanding of the risks that individuals and society run if not protecting themselves proactively. The opportunities for growth are now numerous and sizeable.

Within Byotrol we have effectively gone through several years of growth in 8 months and have had one eye at all times on scaling in a controlled way that supports long-term growth. We have done all this whilst the team has been working within the lockdown rules, at their most stringent in the north-west UK where our labs and many staff are based. Despite these constraints we have made significant changes to our team, management structure, processes and supply chain and have now started investing in marketing, advertising and promotion, PR and product proposition development research. We will report more on those initiatives at the year end.

We are pleased that the financial returns on our investments are now starting to come through - as shown by these interim results - and we remain very confident for our year end results We are now carefully investing some of the returns in Byotrol's future and remain very confident in our outlook. These are exciting times for all Byotrol stakeholders and we look forward to further progress in 2021 and beyond.

So I'm new to BYOT. Does anyone think they smashed FY 2021? i.e. results above expectations / broker forecast?

The Analysis is as follows:
According to Finncap - broker forecasted rev for FY 2021 (ending 31/3/21) is 11.5mn with PAT 1.5mn, giving EPS of 0.3p and P/E (f) of 21.7.

For H1 - they already did £6.7m (£2.2m in H1 2020) and PAT of 1mn.

So to beat broker forecast - for H2 - they will have to do in these 6 months ending 31/3/21:
Rev - 11.5 - 6.7 = 4.8mn
and
PAT (they have tax losses so no corp tax payable) = 1.5mn - 1mn = 0.5mn.

What do people think? Do you think they will be smashing this in H2?

IMO I think they did + outlook for 2022 FY - very very good. I think personal hygiene product demand has changed permanently both for individuals and businesses.

I think they are referring to the bought forward reserves i.e. as at 1/4/20 - therefore excluding the current FY.

lootgaloot - You almost make it sound that the worst is yet to come. Surely the worst is now over.

SHORT TERM - i.e. existing fleet + receivables + payables.
AVAP currently have a fleet leased out, and they have a number of aircrafts available for leasing (non-contracted).
Focusing on the short term, it would be:
- minimise cash outlay,
- lease out available aircrafts (which is very likely within the next 12 months once demand ramps up (unless you disagree that demand will ramp up)
- maximise cash receipts - collect lease receivables - current and arrears outstanding.

Once some semblance of profit is restored, assuming demand for international travel returns (yes I appreciate impact of zoom on business travel but still we all need to travel), AVAP's credit status should improve.
Does increases in interest rate have an impact in the short term on AVAP? I am not sure it does. Even if it does, it is probably hedged so exposure is minimised.

MEDIUM TERM - future plans
NEW DEBT FINANCING
Once the business model is restored on existing contracts, AVAP may look for further debt financing to finance additional aircrafts to facilitate further leasing to "new" clients or existing clients seeking for additional aircrafts.
Will there be demand for leasing from airlines? IMO yes.
Will higher interest rate charges have an impact on AVAP?
At this time, yes. Fully agree, interest rates for debt financing are likely to be higher, but then again, so would expected lease receivables from new contracts.
So how would airlines finance these higher interest rate charges to pay AVAP? Higher prices for tickets.

Once again, let's return to the interest rate, over the period of last 40 years, the current interest rate + future expected interest rate is still expected to be very very low and manageable. So whilst, interest rate for AVAP's medium term plans is important, they are expected to be manageable.

EXISTING DEBT RE-FINANCING
These are expected to be at a higher interest rate charge, which I'd imagine AVAP will seek to pass on to the lessee.

HIGHLY LEVERAGED
My understanding which could be incorrect is that, if AVAP default on payment to bondholders, then bondholders may under certain T and C grab the aircrafts and then seek to sell/lend them out themselves to raise proceeds. That sounds screwed to me because I do not think any bondholders want to go through this process. I.e. Sell at firesale prices is even worse. So I beg to differ that AVAP's situation is "perilous". The bondholders for the May 21 tranche has already been resolved - done deal.

So overall, this is my take on the situation.

Thanks guys.

If granted this Wed -
450 shops x up to £6k each = possible £2.7mn additional in the kitty

Very nice boost to liquidity.

Just a gentle reminder to everyone that CF announced that w.r.t first dividend in specie - "not long to go, 4 to 6 weeks" (or words to that effect) on 3/2/21 (if my notes serve me right).

Come 3rd of March - that would be the END of the 4th week.
So guys, first div in specie - very likely to happen in the next 17 days.

Very much looking forward to it!

Per Jan 21 TU, PGH will be publishing accounts in late March 2021.
This reinforces the notion that PGH will be issuing their "Dividend and Notice of Results" RNS very very soon.

In a normalised year - using 2019 for e.g. - divies werer 23.3p. At current SP, that translates to a yield of circa 10% p.a.
Of course there is not guarantee that future divies will be at this level and most likely divies may be reduced in view of covid. However, this reflects the general generous div policy of PGH.

In any case, given today's SP, that is an excellent div yield
+
Huge cap gain potential.

Typically around this time - PGH come up with "Dividend and Notice of Results" RNS
I'd expect a possible SP increase post announcement to reflect new PI buy-ins.

Thanks for that lootgaloot. I like your take on it - the "inversion" perspective - i.e. "what if it does not ...scenarios". Many of the "what if" cases your laid out are not unreasonable.

My guess is that the big boys are / have been in the process cost rationalisation and survival more than a focus on gobbling up more market share. Thus, right now, they are more focused on their own patch rather than the next door neighbours.

6 / 12 months on - who knows? But by then Avation, SP should reflect a more positive market sentiment to AVAP assuming international flights resume. LTHs of AVAP may have an more extensive view than possibly both of us.

It's not "rosy" for AVAP - agreed. Then again, it never is for recovery plays. GL

Thanks Chester

Hi DNL holders. I am considering an investment into DNL.

Looking back I noticed in 2018 - "...DNL has received the headline data from its European Phase III trial in CAH, which showed that Chronocort was not superior to standard-of-care, thereby failing to meet its primary end-point. Given the strong Phase II data, this outcome was unexpected. "

I assume, that DNL are awaiting for approval after a re-application in the same jurisdiction. Could someone please tell me what is different to the application / data that justifies a superiority over the existing standard of care. Would very much appreciate it. Thanks guys.

Topman and top answer Matthewsdad.
Brings me back to my revision for ACA exams many many moons ago!
Yes, P and L reserve = distributable reserves for dividends payable (if the company decide to do so).

Appears that much of recent CPO rises benefitted DKL as opposed to MPE or AEP (I was in AEP pre-Xmas). At least MPE has a broker coverage! Given the excellent CPO prices, the 2020 FY, at least, will be a stellar one for all 3.

Why the capital reduction?

I am an accountant who has not kept up with the times! IMO, the capital reduction is simply a paper exercise - for accounting purposes to tidy up the accounts. Probably recommended by their accountants? So the cap reduction should not have any impact on business activity or impact on P & L .

It's seems to be contra-ing off (cancelling out each other) so called reserves (these are not "cash" reserves but reserves to make the accounts balance ultimately). Prob. best to ask the management if u guys want clarification. You could always send an email to them.

lootgaloot - Great points you mentioned, I'm not a leasing expert. Would love to pick your brains.

U said, "Bond yields in US are rising fast and that will increase interest rates globally. "
Are AVAP's interest payable to bondholders based on a variable or fixed basis ?
If fixed basis. Why should they be concerned on increasing interest rates?
If variable, would they not have T + C with their airline customers citing that payments would be additional if the IR is X% above Y? (I am speculating but surely they can not be stupid to be left overly exposed). Or does AVAP hedge / lock in the IR payable ?

U said, "Can AVAP generate enough cash to pay interest on loans going forward."
Surely this goes back to what I said, provided international travel returns = bums on seat = revenue coming into airlines customers = money payable to AVAP for obligations both current and in arrears?

U said, At what point does it make more sense for carriers to invest in their own fleet.
During the presentation today 26th Feb, the management alluded that airlines with their burnt balance sheet are very unlikely to use precious capital to buy their own carriers outright. Instead, they would choose to use companies like AVAP. It'll require airlines too much capital and from my limited memory of finance/operating leases and impact on the P & L would not be entirely advantageous for them (ie.. on a Return on Capital Employed basis, hence "off balance sheet financing via lease appears to have advantages).

U said, "Just like buy-to-let housing, the business model only makes sense in a low interest rate environment."
So if the environment has higher interest rate, why can't AVAP not pass this on to the airlines (provided they are agreeable)?
If airlines are not agreeable, they will have to do a capital raise to buy airlines outright
or
sell bonds themselves at similar high interest rates to fund purchase (on balance sheet which with my limited knowledge does not appear optimal for airlines)
or
bank financing - at similar interest rates

Any sense in what I say or have I just made them up as I go along? Probably the missing piece could be the interest rate coz I am useless with bonds / yield etc. Currently, I see a simple equation for AVAP, if international travel back = AVAP is back. Simple as that at least for the next 12 months. If so, SP should recover significantly. Look forward to your reply. Thanks

Agreed Bozi.
Here goes with Vince's new vid.
https://www.youtube.com/watch?v=S6lzERra9Ho&feature=youtu.be
Hence SP is supported. It's not about raising the SP - it simply is supporting current levels.

Sure with end of lockdown in sight - PGH are going to be a beneficiary. Their staff could not get to see their clients for insurance proposals but with the end of lockdown, they will be.
+
For the past 2 years, they have proposed a dividend around this time (mid to end of Feb time) - I am expecting circa 3% yield. I am hoping within these few days time they will be announcing ( Don't let me down Deborah!).
Putting my head on the line - at the end of the 2021 - 300p? + divies whilst you wait.

Also, any one reading this BEFORE 8th March, may want to take a look at the most recent proactive investors video
https://www.youtube.com/watch?v=TFqjdVAqbgs
Where Deborah (CEO) CLEARLY says that they will be announcing to the market a very big contract win of a retailer but not until 8th March when the retailer themselves will announce it to their staff first. I reckon this big win via RNS will be warmly received by PIs.

Furthermore, what is more encouraging is that they now have an additional 180,000 customers to target compared to 2020. So in 2020, circa they had 450,000.
In 2021, at end of lockdown, they have 450,000 + 180,000 = 630,000.
Surely, their customer base is going to increase for 2021.

Also, there has been NO dilution from fundraising.
They are completely cashed up.
They pay divies - pretty healthy yield at current SP (on top of my head 5% ? )
And 2020 results were excellent given that 4-5 months were lockdown months

This is not a sexy share. However, I think it will play a quiet but major role in any PI's pf.

I bought into PEN , CRL ; EQLS ; RBGP ; IXI when the market disregarded them. Made very healthy returns. PGH is very very similar. No one fancies them right now.

As soon as people think of end of lockdown, they think of NEXT, ABF, SHOE and TED (the latter 2 I bought too for trade) but they do not think or know about PGH. Shame really coz over 2 years, I reckon PGH will return back to 400-460p level translating to a 100% - 130% return over 2 years (in simple non compounded terms 50% - 65% per annum).

What's more, is that given zoom, their salesforce have been added a new dimension to selling insurance to clients AFTER the initial introduction meeting = savings in time and higher level of customer contact = higher customer retention. This means higher sales for 2021 and 2022 thereafter.

Larus - delayed sells
09:12:57 126.50 90,000 113.85k
15:03:00 128.55 76,662 98.55k

Thanks MPE should do well this year.

Been watching MTR for a long time. Back in sept 2020, when SP got to 28p, I thought that was kind of hard to sustain given that SFR at the time was way down. So IMO, at that time, MTR SP was a wee toppy and this was reflected in the retracement subsequently.

However, this time round, there is a big big difference, the so called supercycle for commodities has literally started, and MTR are right in the middle of it with one of the most richest resources on the planet in KCB. Also, Sandfire Resources Ltd SP is rocketing on the back of copper prices. So I hopped in a few weeks ago.

McNeily has been quiet in the past months. I do not think I have seen an interview with him anywhere fro the past 6 months. So more publicity would be good. It astounds me that such a rich resource like the KCB where MTR can gain via Cobra + Sandfire is not shouting this out loud when copper is at ATH.