Member Info for shandypants2

re profitability.
The Turner Pope broker note (which is paid for by Skin) has 2019 rev at £1m and an overall operating loss of £1.8m.
2020 estimate is £4m rev and operating profit of £250k.

Just documenting this in case anyone was hoping for a nice surprise when 2019 financials get published

why does ORPH need money Sharealot?
Placing in Jan for over £5m was to ensure they could get to profitability and since then cost cutting has continued plus a number of 7 figure contracts have been announced.
I suspect we are at or close to break even now.

ShareBag - for clarity net margin is NOT 80%. GB has previously stated that Rinocloud has a 78% gross margin, however, this high level may not apply across all areas of SKIN's business.
SKIN is still loss making., hopefully it will make it's first profit in 2020

Very quiet on here recently.

Hardman has just published a new research note. I particularly like the following comment ....

We believe that the company is in advanced discussions with a number of
potential US commercial partners and that the conclusion of a deal is not too far
away. It is reasonable to expect that any deal will include an upfront payment to
reflect the investment that STX has made to date in de-risking Accrufer for the
eventual partner. This would extend the cash runway and be positive for the share
price.

Dan your 50% profit estimate is the gross profit only - net profit will be after admin/salary and hardware depreciation is also taken into account.
We have spent over £10m on new hardware in 2019, that has recently been installed, and admin/salaries etc were over £3m last year (but hopefully less this year).
I've assumed £250k a month for admin and £350k a month for depreciation.

Based on your £26m revenue estimate and 50% mining efficient (which i feel is a good estimate BTW) that's £13m gross profit and c£6m net profit.

On a PE of 12 that's £72m valuation , at 6 that's a £32m valuation. So a bit lower than your valuations but still the minimum is 100% greater than the current market cap!

Hi, to avoid looking at this depressing share price i've don't some basic analysis on the monthly mining data in 2020 and Q3 and Q4 last year.I've taken the daily BTC price for each day and got a daily average by taking the top and bottom price during the day and dividing by 2. Using these daily averages i can then calculate the monthly or quarterly average BTC price.Now Q3 last year was a great quarter with 73% mining efficiency. During this quarter the average price of BTC was $10,370.Since then the BTC has been quite subdued with only Feb 2020 above $9k ($9,632).Using the mining efficiency % i've calculated an average hosting cost per coin too. Hosting costs in 2020 has been higher as new machines have come on line.Now this should settle down going forward perhaps an average of $4k could be used (hopefully lower as new more efficient machines come online). With BTC currently c$9,500 we should have a mining efficiency around 58%. Also in simplistic terms we are at c Feb prices and share price was c7p during that month. Now we are at 5p - so a 40% uplift could be on the cards once sentiment improvedIf table doesn't format there are 3 columns - Date, av. BTC price during period, mining efficinecy %, and a derived av. hosting cost per BTC Date range Av BTC price Mining efficiency (%) Av. Hosting cost April 7,199 39% 4,391March 6,901 42% 4,003Feb 9,632 50% 4,816Jan 8,347 52% 4,006Q4 2019 8,030 52% 3,854Q3 2019 10,370 73% 2,800

yes indeed - maybe a sign that DTC revenues are performing well.

Also, means that Board has no knowledge of a potential takeover!

in support of Pop's view during the 2008 crash gold initial slumped in price before steadily rising over the next few years to hit a high of c$1,900 an oz in 2011.

In March 2020 BTC had an initial slump (as did gold, but BTC was much larger) but has recovered to previous levels.

With QE etc devaluing all currencies , as was the case post 2008 crash, both gold and BTC should be considered a safer haven.
Let's see how it pans out

Also was on Vox Markets yesterday - clearly a big PR push going on at the moment.

CEO is an accountant so not the most dynamic of presenters and appears to be reading from a script, but it appears reasonable progress is being made re the US deal, which is the game changer for STX.

Current bid/offer is 122/125p so hopefully a tick up soon

yes sentiment has clearly turned here. At these BTC prices , c25% up on April average price, ARB will be making decent mining profits.
Sentiment will change - this should at least be nearer 7p, the price it was at when BTC was last at these prices in Feb.BTC just back to $9,300 as i type.
Enjoy the ride!

The new buyer appears to still be buying so maybe he knows something?

IMHO with no current revenue guidance it is difficult to say what a fair value is, maybe c80p.
It is likely that retail revenue in Q4 will be almost zero so the hope is that DTC remains strong.
If so this could give us may £12m rev and £1m profit for YE.

IDP last updated in early April. Maybe they are waiting for Boris's lockdown update on Sunday but if retail remains restrictive maybe a % of staff could be furloughed and some wages deferred.
In terms of covid i do think IDP is better positioned than many other companies - it has no debt, lowish wages and has an impressive DTC channel.
The downside is that the impact is during the peak sales period. This will impact cashflow - money spent in H1 on R&D and inventory is usually recouped in H2 when inventory is sold.
Having less cash to go into 2021 could limit expenditure and growth on IDPs other brands, and essentially we will remain a one brand company.
It might make sense to sell off the life science side (Prolong and Growlase). This was always Haris's baby, revenues have been limited thus far and i'm not sure IDP has the money and desire to focus much time and effort on these brands.
Nuthing appears the obvious one to focus on going forward IMHO.

revenue per headset will be lower not the cost!!

they do like a placing don't they.

IMMO was a great little company and was definitely on the right track, however, covid has really impacted business.

Can't see a massive bounce too, yes zoos will be ok but aquariums is their big earner and there could be restrictions on internal spaces for quite some time. With social distancing and need to clean headsets more frequently etc the cost per headset will be lower once lockdown is relaxed.

I think IMMO know this that's why fundraise is so large

Another proactive interview - US accounts for 70% of global iron replacement market

https://www.proactiveinvestors.co.uk/companies/news/918974/shield-therapeutics--us-talks-ongoing-with-progress-being-made--918974.html

at these prices BTC is c30% above average price in April - share price must adjust for this eventually

US - a number of interested parties. Negotiations not impacted bu COVID. Already started manufacturing in anticipation of an US deal.

https://www.proactiveinvestors.co.uk/companies/news/918859/shield-therapeutics--very-active--on-us-partnering-discussions-with-significant-interest-918859.html

i am not happy with clear overspending and overpaid directors with little skin in the game (the Argo business model is so simple what do they do?) however i agree things should be calm down in 2020 and we should be operating from a lower cost base.
Also - and this is why i am in ARB - the company has made money in EVERY month of the year to date.
Based on £250kpm admin costs and £350k pm depreciation ARB has generated a net profit from Jan to April of c£1.2m.
This is during a period when BTC has been all over the place and started the year at quite a low value (c$7k).

Although i was disappointed in April's figures (the other 3 months have been quite encouraging) BTC was quite low for most of the month and only jumped in the last day or so. For May BTC has been c20% higher than the average April price so this should be clear profit.
If we can make a profit at $7k then current price of $9k should be generating decent numbers and i personally think we will see $10k in the next week or so.
Obviously halving will have an impact and May's figures might be a little confusing, but hopefully from June onwards things should see ARB making consistent profits every month.

2 other things looking at accounts. Net asset value is £23m and current market cap is £15m - 50% upside when people wake up. Also 2019 H2 FX movement (due to strong pound following brexit i presume) was £1.02m. If FX hadn't moved so strongly ARB would have reported it's maiden profit in 2019.

generally costs for 2019 seem to be c £1.5m wages/consultancy and £1.5m admin. FX loss was 0.4m amd crypto movement £334k. That's the bulk of the £3.8m.

Edwards was the highest paid at over £340k so hopefully wages may reduce in 2020. Also £200k loss of office cost won't recur in 2020 according to company. Similarly some costs such as travel and subsidence at c£170k (was £200k in 2018) seem excessive for a loss making company - should reduce as no travel at the moment.
In the small print some of the office space is hired from a company owned by the CEO too. Whilst cost is low, i'm never overly comfortable when i see such things. Similarly we are paying a non execs company for crypto portfolio mgmt - see below. Based on April figure sit appears we are selling on the day we mine so not quite sure how this is adding value.

Protos Asset Management

During the year, the Group obtained services from Protos Asset Management in regards to crypto portfolio management. Protos Asset Management is paid a monthly management fee of USD$5,000 and a percentage performance payment based on the relative success of the portfolio against the market. Matthew Shaw, appointed on 17 July 2019 as a non-executive of Argo Blockchain Plc founded Protos Asset Management. During the period of his directorship, the Group paid £83,553 in service fees.

Sorry table in part 1 looks even worse when post is uploaded!!

Anyway, it appears the wages for YE 2019 are c £1.5m. This includes a a large chunk of the £1m plus consultancy fees paid. So current CEO wasn't a director in 2019 but he still got paid $216k via consultancy fees. (section 28 of accounts)
Key management compensation

Key management includes Directors (executive and non-executive) and senior management. The compensation paid to related parties in respect of key management for employee services during the period was made only from Argo Innovation Labs Inc, amounting to: £413,340 paid to Possibilities Training Group Ltd in respect of the fees and Termination payment of Jonathan Bixby; £343,555 paid to MSE Management Inc. in respect of the fees of Mike Edwards; £17,086 paid to POMA Enterprises Limited in respect of fees of Matthew Shaw; £250,218 paid to Blockchain Consulting in respect of fees of Inderpreet Hothi; £216,639 paid to Vernon Blockchain Inc in respect fees of Peter Wall. Other key management received £19,643. These are not inclusive of the related party transactions disclosed above.

Having emailed the company re YE figures they have provided some additional information.In particular i couldn't understand how costs of £632k for H1 could be over £3m in H2. So although revenues increased substantially in H2 ARB made a loss for full year despite making a profit in H1.Unfortunately the table below doesn't format well when copied - there are 4 columns - from L to R 2018 A, 2019 H1, 2019 H2 and finally full year 2019.Although i am disappointed that wages/salary (key personnel expenses) went up substantially in H2 part of the increase in H2 is related to a FX loss and also crypto asset movement. In H1 these 2 produced a £600k profit and in H2 this was a 1.4m loss (fx in H2 was loss of over £1m!!!). So hopefully if FX can be hedged going forward and BTC doesn't fall during 2020 these losses shouldn't occur going forward.In fact BTC was c$7,200 on 31/12/19 so this should generate a profit if prices remain stable or increase going forward. Income Statement (£ millions) 2018A H1/19A H2/19A 2019AMining Income 0.089 2.903 6.235 8.348Other Income 0.676 0.030 0.239 0.269Total Revenues 0.765 2.933 6.235 8.617Depreciation of mining equipment (0.420) (0.647) (1.437) (2.084)Hosting & other costs (0.341) (0.712) (2.764) (3.476)Headline Mining Margin 0.004 1.574 2.034 3.057% margin 0% 54% 33% 35%Key Personnel Expenses (0.902) (0.407) (1.096) (1.503)Other Administrative Expenses (1.540) (0.802) (0.714) (1.515)Headline EBITDA (2.439) 0.365 (0.327) 0.039Other Depreciation (0.068) (0.082) (0.056) (0.138)Headline EBIT (2.506) 0.284 (0.383) (0.099)Net Interest 0.026 0.005 (0.040) (0.035)Headline Pre-Tax Profit (2.480) 0.288 (0.423) (0.134)Crypto Asset Movement (0.235) 0.037 (0.371) (0.334)MaaS Juicing Expenses (0.415) 0.000 0.000 0.000Provision for Unpaid Shares (0.834) 0.000 0.000 0.000Foreign Exchange Gains/Losses (0.153) 0.621 (1.022) (0.401)Reported Pre-Tax Profit (4.117) 0.947 (1.816) (0.869)