Member Info for shandypants2

the £70k is the gross proceeds is a very low sunm to raise, god knows what the net will be after costs - maybe £50K?
This money clearly won't last long - assuming further testing is /will be required how will this be paid for?

i would be very surprised if we don't get at least one contract announcement next week - probably on the results day. This has been the pattern over the last year or two. Mo has previously stated contract finalisation can be 'lumpy' and HVO will want a good news week.

Take and LT this is really a face palm moment.

Evidence of cash burn FFS - read the accounts. 31/12/21 £3.46m (after a £5m raise), 30/6/22 £2.56m and now on 17/4/23 £800k.
DVRG owe £1.5m and thus far £100k has been paid - so the repayments terms are very generous. There is a risk that DVRG will go bust before this is paid.
Revenues in 2021 were £900k, H1 2020 £735k so it's pretty obvious 80% plus of current revenues are from DVRG. Yes they are trying to diversify away, but this £2m pipeline is clearly not with existing clients.
I have made a big loss on MSYS so am entitled to state an opinion.
Feel free to average down if you disagree

IMHO the current cash shows the cashburn at MSYS is still too high. They have tried to put a positive spin on it but that £1.4m from DVRG won't be coming in anytime soon, if ever.
The £2m non DVRG sales pipeline sounds impressive but it is a pipeline i.e. not signed contracts, so arguably doesn't exist (yet). As of today DVRG are our biggest customer and so if they go under ....
This is clearly a GB written RNS. Read with caution

GB clearly has blood on his hands, and there were warnings in the last interims - reported £6m H1 revenue but they had over £7m in trade receivables which seemed very high.
However, the previous CFO and the audits need to take much of the blame too. Both completely incompetent.
Furthermore, the chairman Ross Andrews appears a complete waste of space. He should be overseeing things yet from today's RNS seems to think these issues have nothing to do with him.
He was also a non exec at IDP - a complete waste of space there too.

i've got a similar view to you - could be good, could be bad.
However, as a non-exec probably earning c$100k p.a. already out ot POLX isn't he meant to be providing advice as part of his role?
If they want Dan to take a on a greater role, and he does look to have the experience, $300 an hour seems overly generous.

i love the way you state you don't post much and then repeatedly post.

Incidentally i was in a Boom Battle bar this weekend (XPF factory) - it was empty.
Yet it's valuation is £30m ,twice Rev, and has a fraction of the revenues.

You clearly don't like the share, so do one

Dave - the Ardgowan money is not a loan it's a 'strategic investment' so essentially the £3m has been spent on the build.
Hopefully it will be reap benefits - namely a home and visitors centre for Blackwoods and a blended whisky. The blended whisky was meant to be launched in Q4 2022 so will be about 1 year late by the time it hits the shelf. Any new brand needs a marketing budget, something we don't have. A blended whisky will go up against the big boys such as Diageo and their multi million budgets

cash was £948k at H1 so they have burnt through almost half of it in the last 6 months. Not sure how this is a positive.
Even slightly increased revenues are nowhere near what they were a couple of years ago (before the change in distributor) and company is loss making. The current cash won't last long

Trout, not sure if it's an AIM requirement or just good practice but the YE results day are usually preceded with a RNS a couple of weeks beforehand.
HVO/OO has definitely done so the last few years so i would expect the same this time around.
If the SP increases in anticipation, as it did prior to POLB, surely that good for all LTHs - unless you want one last cheeky top up!

was hoping for a RNS confirming a date for the YE accounts to be released by now.
Accounts are usually accompanied by one or two new contracts being announced too.

Come on Mo, we know there is lots going on in the background, time to update the market

re-read the trading update from late Jan 2023 - the business is now profitable and growing. I topped up yesterday

cash is key now as they have to pay back over £3m to cover the £2.5m loan and interest next May and June 2024.
Looking at current assets and liabilities as a whole and not just cash it shows that trade receivables (money we are owed) exceed payables by over £3m and that in total the net current assets (assets - liabilities) is c£5m.
So although cash is only about £1m it should hopefully start increasing as the money due starts hitting the bank.

Also cashflow statement is interesting. Although it states there was a £2m cash outflow during this period the trade receivables increased by £3.9m. We are told this is a one-off. Assuming the receivables increase is indeed a one off and better invoice collection is put in place then the overall company should be in good health as the actual underlying business generated almost £2m in cash in the H1 period before the working capital movement 'hit'.

£30m rev for year looks pretty nailed on so this does look oversold IMHO

however, they did have £17m cash this time last year and are still loss making. If they can turn a profit this looks great value. If they just keep spending their cash to prop up a loss making business then maybe not.

The H1 cashflow is interesting, especially as these accounts are the first which split out the (new) core business and the security business, which is up for sale.
When i saw cash was now c£600k i was a little concerned, however, the cashflow statement makes better reading. This is for the full company and show cash generated from operating activities was £755k during H1. Almost £1.5m was spend on acquisitions and related costs and c£500k for financing, the majority of which was the dividend. So the £2.5m cash at the beginning was reduced to £1.35m of which almost £750k is earmarked for Vigilant and £600k for the remaining core business.

So when Vigilant is sold (over £30m rev and maybe £1m EBITDA to take into account the new contract win in 2023) it will also have £750k cash.
I am now hoping the total sale valuation will be c£5m rather than £3 to £4m.
This will give Croma a decent war chest for further acquisitions and possibly even a special dividend - a 7p special dividend would be 'only' just over £1m in total.

yes £1 seems very conservative IMHO. Good finish to the day

for someone who doesn't hold RBG you sure post a lot Ocean.
Not quite sure what your point is - are you saying the £8.3m capital spend was purely financed from the rights issue in May 2021? It clearly helped their cash position but in the 2022 accounts (July 201 to June 2022) the cashflow statement clearly shows they generated £25m from operations and spent £8.3m on capital purchases and £10m on financing. So overall in the period cash increased by c£6m.
This supports my view that RBG is cash generative. Unfortunately EBITDA is not profit and that seems to be the issue here. Buying Peach with borrowed money seems a big risk

Rights issue was in 2021 and used to pay back loans, i think.

In 2022 accounts (YE 30/6/22) cash generated from operations was over £25m.
Below is the excerpt from their accounts:

Operating cash flow and net bank debt

The Group generated net cash flow from operating activities in the period of £25.9 million (2021: utilised (£2.3) million) as a direct result of positive trade in the year, whereas the prior year had significant cash strains during periods of closure.


After positive cash flow from operating activities, capital expenditure payments of £8.3 million, bank loan interest £0.9 million and loan repayments of £1.0 million all contributed to a net cash inflow in the period of £6.7 million improving the net bank cash position to £4.1 million. This is in comparison to 2021, where capital expenditure payments of £2.0 million, lease surrender payments of £1.7 million, bank loan interest £1.1 million and loan repayments of £52.7 million offset with proceeds from fundraising of £34.0 million and drawdown of borrowings of £44.0 million all contributed to a net cash inflow in the period of £9.6 million decreasing net bank debt to a closing position of (£3.6) million.

a decent update. YE numbers have been met and cash is in a much better position. Also 2023 has started well.

Cash is at a point in time so trade payables and receivables will always have an impact but just in the last 6 months cash has risen from £600k to £1.9m so that's a big positive IMHO.

No profit in mentioned, but I wouldn't base my investment criteria on the current PE. Firstly covid has had a massive impact so when a company moves from loss making back to profit the PE is almost irrelevant in that first year, it is the momentum that is key (yes i know 2021 was profitable but that included covid grants etc).
Also H1 was a £300k loss so even just breaking even for YE says that H2 made £300k. For 2023 just getting to breakeven in H1 would have a massive impact on 2023 PBT. A £300k PBT for 2023 gives us a low single digit PE BTW.
Also look at 2019 numbers as a guide. Revenues are still well below that. If we can get back to that level and report a profit this should surely be valued north of £5m.

Ocean a lot of posted on a share you don't appear to hold.
FYI last full year of accounts (YE 2/7/22) does show RBG did return to profit and also spent over £8m on capital expenditure in that period, mainly refurbing bars.
Clearly H1 results aren't great (although train strikes had a big impact) and after getting the balance sheet sorted spending £16m of the overdraft facility on Peach pubs seems a big gamble. I also don't like that RBG use EBITDA rather than PBT for their guidance and in their accounts they use 2 different EBITDA measurements.
However, as has been said the gross profit margin is high and are cash generative. At weekends these bars are pretty busy so that's a big positive for me.