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From what I hear a couple of institutionals are selling at any price - they are post-IPO investors and they need to be cleared

New CFO Steve Winters (ex WPP) has brought rigour to the budget forecast for the remainder of the year and has guided numbers he's confident to meet or beat.

They have 75% visibility on 2H revenue with the rest being risk-weighted pipeline - very little speculative new business in there. 2H guidance is very likely to be met, by the sound of it.

The sales function has been re-integrated into the operating/delivery divisions with vertical heads taking responsibility for hitting revenue numbers again, which is key as most of their business is recurring client business and it is thus essential to maintain/grow ongoing relationships. Huge error to separate sales from delivery - lesson learnt at much cost!

The business is back on an even keel it sounds like. It's safe to buy, at your own risk ;)

Could someone share where mention of this JV or partnership was exactly?

TPX is a people business not a physical asset business, and it has in part grown by acquisition, which is why intangible assets are high. It doesn't matter. So long as their people are busy generating revenues, i.e. consultant/engineer utilisation remains high, this is a profitable and cash generative business. It is a 30% gross margin business and new business growth last quarter was back to a forward trajectory, £26m in the quarter - the company is generating a good level of cash from its clients and is growing.

That said, TPX has published their new EBITDA margin expectation, which is now 12%, down from 15%. This amounts to circa £3m more cost, annually, into core functions that support their business, primarily sales and marketing and finance, I believe. There have been new hires, but also I speculate that some senior consultants are now doing more sales work to keep the new business trajectory positive, which can't be billed to clients. In effect, fixed costs have risen and this has eaten into profitability.

1H was worse as the integration caused issues with new buiness volume that resulted in lower client billing alongside higher costs. The trading update confirmed that situation had stabilised, as a result of new business generation normalising, thus £26m won in Q2.

As I said in an earlier post, this sort of share price reaction could only be justified by a continual decline in new business volume - that is not the case.

Dustbin please explain your assertion that they will need to raise capital? I don't think you can, in which case you're just noise in the background. Please bow out of this board.

For those who are actually doing some analysis, the new business TPX has been writing this past quarter (circa £26m) is at a gross margin of circa 30%. This is not a business burning through cash. Yes they are investing in their sales and finance functions, but they are not going to do this at the expense of negative cash flow. Why on earth would the company load up on central costs to the extent that they need a capital raise and undermine the equity value, not least when leadership and senior employees own circa 30% of the company? They wouldn't. Funamentally, this is a cash generative business so long as consultant utilisation is adequate and that requires the trajectory of new business to be positive and stable.

Insiders and pre-IPO backers sold a slug (circa 10%) of the share capital at around 230p in October last year to institutional investors. At the time the business was flying. Since then the (ex) CEO and CFO continued to receive some shares linked to acquisitions, which in my view should be returned to the company because they've obviously not done a good job with the integration and the share price. At the very least they should be reinvesting all the proceeds from that share sale at current levels.

The last several acquisitions have been in part (a large part) paid in shares, most recently at 225p and 264p - in other words the founders of these companies have seen a large part of their investment in TPX fall roughly 80%. Another reason why Neal and Oliver had to go - they're not going to be very popular with their own senior leadership team right now, who are heavily invested in stock and seen their wealth go up in smoke. Grant Harris owns more than 10% of the stock, acquired via Keep It Simple in early 2021 at 180p. He must be livid.

There hasn't been any significant director purchases - indeed management let go of stock end of last year at circa 230p. I'm expecting (as in they had better!) management to make purchases now the profit warning is out in the public.

In my view the figures weren't fully understood back in July as management information systems haven't been joined up (no cross-group universal financial control system) and some of the acquired companies weren't even monitoring staff utilisation accurately. I believe this is why they report so long after period end, as it takes time to compile the information and check it. I believe new MIS is now operational and this has also been a factor in the central cost investment. Frankly ex-CFO Rigby should have been on top of this from early doors, and surely a factor in his shifting of roles.

This is a low volume collapse of share price and knee-jerk reaction to a poorly understood trading update in my view. As I said, I drew a sigh of relief when I read the RNS and saw new business wins at £104m annualised in Q2.

Agree the acquisitive growth model has been challenged by the integration complexities, but not beyond fixing. Before the integration, each business was growing very nicely. As I see it, the integration of teams and introduction of better financial control has introduced an administrative headwind and snarled up smooth functioning as teams are broken out of their silos to work together. I guess the decline of business wins that impacted revenues in Q2 resulted in headcount cost being reallocated to marketing expenses, hence opex as % of revenues ate into profitability. The improvement in business wins as confirmed in Q2 will be booked as revenue thereafter and reduce opex dilution. The business model has a large fixed cost base if one considers that consultants not utilised have to be paid - that's what happened to profitability. As utilisation improves into 2H, operating margin will also rebound. That is what has been guided for and it comes across to me as entirely logical. I've seen this before with similar companies such as EPAM, Infosys, TCS.

I'm not happy about today but I stand by my analysis, that this trading update could have been A LOT WORSE. Had new business wins come in lower than forward guidance, the current share price would be justified.

What I meant is that their new business won in Q2, which will largely be booked in 2H, accounts for circa half of 2H revenue guidance; and committed client spend is 75% of 2H guidance.

£26m quarterly new business, assuming representative of what's repeatable, indicates they're going forwards again. It represents £90m in annual revenue adjusted for seasonality, which = growth.

We know Q1 went backwards, that was clear at their last (in effect) profit warning when it was admitted that new business wins had stalled, although obfuscated. That resulted in 1H organic revenue growth being a negative when one extracts acquisitions. That is why the share price halved from circa 230p to 115p.

The same analysis today confirms they're back onto a growth path - namely quarterly new business wins. 75% of 2H revenue guidance is already committed by clients. Visibility for 2H is good, much better than it was at the last update, when the trajectory of new business wins was unclear. That trajectory is now positive again.

As for profitability, we don't know what additional resource has been added, but a handful of expensive hires raising fixed cost will move the needle unfortunately. So long as this increased in fixed cost is on-off, so be it. It will be diluted as the top line grows again. Importantly gross margin is alright. This is really key. I would be really concerned if gross margins were falling. Again, 1H gross margin was weaker, but 2H will be stronger and visibility should be pretty good on this front. With all the inflation around, I was relieved that they didn't take a knife to gross margin.

In all, I'm reassured by this turnaround, albeit at some short term cost regarding overheads.

2H EBITDA is visible and is guided to come in at circa £6m; annual of circa £12 over next 12 months taking into account recovering revenue trajectory, which is reasonable. Hence EV/EBITDA closer to 5x.

1H was a **** show - but that's history now. Most importantly profitability and revenue generation recovery are in sight - we're half way through 2H so these numbers for 2H are credible.

Disagree on mgt changes - exec team needed a refresh. Although there will be additional dilution from stock incentives to come.

I would have been terribly worried had new business wins and revenue generation for 2H gone into reverse - that didn't happen. And most importantly, it's a cash generative business, so no issues on debt management.

My take:

Annual run rate revenue generation now circa £100m
Annual run rate EBITDA recovered to circa £12m
Still a cash generative business
Bolstered management and finance team and sales function, which was necessary - annoying yes but puts them back on the front foot
Huge business opportunity in secular growth sector

I read the results and expected the stock to open UP this morning on the basis of 1. the big positive rebound in top line and 2. management changes with beefed up team and credible new CEO

The share price fall makes no sense and has been on very very thin volume

In my view, anything less than 10x EV/EBITDA for this business is a bargain - we are at around 5x

Consider that their last two acquisitions were in large part paid for in shares at >200p just a few months ago. Those businesses intimately know the business TPX operates in and wouldn't have joined at such a valuation if they didn't see a great future for TPX. The pace of revenue generation underscores the opportunity.

I've purchased another 100k shares. Best of luck everyone.

Now a solid 7.2% dividend yield net of Nigerian witholding tax - one benefit of the crumbling GBP, an improving dividend yield in GBP terms

The longer no news the more likelihood the polticis is being settled privately for a positive outcome in my view

I've said it before and I'll say it again, the Exxon deal is a side-show and not the primary fundamental reason to own SEPL. It's not the primary driver of SEPL's fair value.

The primary fundamental value of this stock is organic production growth of blocks already under licence alongside the delivery of ANOH next year, which will produce north of $50m annually in free cash flow to SEPL.

These two fundamentals along make SEPL is an extremely cash generative machine.

Even at $70 oil and without ANOH, SEPL produces around $100m of annual free cash flow after growth capex.

By the end of 2022 the balance sheet will be almost debt free, which in my view will justify, indeed require, the board to aggressively raise the dividend. The current level of dividend ($0.10) costs the company circa $58m annually. Given that at $70 oil, and without the contribution of ANOH, SEPL can afford to almost double the dividend, suggests a dividend raise is going to be the direction of travel in the very near future.

With ANOH's contribution from next year, there will be no excuse not to aggressively hike the dividend.

The balance sheet will be debt free and the company will be at maximum capex for projects announced. A total dividend of $0.20 annually would be more than easily covered with cash generation at $70 oil with ANOH operational.

In my view the board should take steps in this direction soon, ideally flagging this fundamental catalyst to the market in advance.

What will this mean for the share price? A $0.20 dividend would mean a 12.5% yield at today's share price. But there's no chance the share price won't react to such an increase. IMHO SEPL will trade up, and a yield of 7% is not improbable given it's traded at that for a long time - sometimes lower, sometimes higher. At 7%, a $0.20 total dividend would imply a share price of around £2.10.

That's the real prize. And in my view, inevitable, bar a major collapse in the price of oil, below $70, which is extremely unlikely for any sustained period of time.

Meanwhile if oil stays at circa $100, pressure will build to pay special dividends on top.

The Exxon deal will be lovely if it happens, and IMHO has a high probability of happening, but it's not the core reason to own SEPL. I don't think many of you reaslise this. SEPL will be trading north of £2 by this time next year without Exxon - that's my wager.

Well, SEPL's dividend yield is notching up again as the GBP slides, which is something. Back to around 6.5% ish or thereabouts.

https://www.thecable.ng/seplat-mobil-deal-well-do-everything-to-protect-our-commercial-interest-says-nnpc/amp

The CEO of NNPC doesn't sound as righteous as he did a few weeks ago, IMHO. Could be a softening of public stance as he realises the odds are stacked against him.

Correct, the AEP will suffer fewer periods of downtime to repair vandalism and less theft, but also there will be an improvement in yield as there will be fidelity in the measurement of oil they inject into the AEP which is then sold at the other end, whereas I believe with the previous route there was mixing of oils from other users and somehow a reduction of volume sold at the other end. I don't know the exact detail but I am sure this was expected to be a material efficiency improvement in addition to the enhanced reliability. But ANOH is the really big near term kicker, especially at high oil prices.

Roger Brown told investors last year that when ANOH is complete there will be a dividend raise. ANOH will generate >$50m in free cash flow to Seplat once operational, whch will cover a doubling of Seplat's dividend. That aside, the rest of the business will also be throwing off cash at these oil prices, more than enough to fund new (unannounced) projects in renewables as well as M&A (such as Mobil).

I've been in this stock a few years and find it bizarre it's still around 125p with the oil price where it is, the AEP up and running, new independent chairman and strengthened board, and ANOH commissioning around the corner. Even when oil troughed to zero SEPL maintained its dividend, stoic and forthright! Since then we've entered another oil super cycle and are touching $100 again, but the share price remains where it was three years ago. I put it down to liquidity, limiting the entry of institutionals, the stock's esoteric geography, and of course a total lack of UK marketing to retail punters! But those factors won't weigh it down indefinitely. SEPL's consistency will be recognised eventually; liquidity will continue to improve (as it has done significantly already), and we might even see a surprise stab for FTSE 250 inclusion.

There's all to play for...oh, and did we mention Mobile Producing Nigerial Unlimited?

https://www.thecable.ng/report-exxonmobil-shell-chevron-to-withdraw-multi-billion-dollar-suits-against-nnpc

Leak explaining the minister of petroleum's position:

www.newstimes.com.ng/exclusive-memo-reveals-how-sylva-attempted-to-undermine-nuprcs-regulatory-power-in-seplats-1-28bn-deal-with-mobil/amp/

Points out that the regulator is, ultimately, a lower authority than the ministry, as well as stating these OMLs still fall under grandfathered Petroleum Act 1969 laws despite the PIA 2021. Quite right!