Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Thought id add my view on the current position now i've broken cover.
At 70p, with 70m shares in issue the company was valued at £50m mcap, the analyst note suggested the companies valuation was slightly discounted to their workings based on a 1.1m ebitda forecast for 2019. The valuation range of 73p-89p given, lets use 80p which would have given a £56 m mcap, suggesting £6m upside. The company has since issued another 10m approx shares, we have 80m shares in issue so that gives a 70p price target had they hit the £1.1m ebitda.
Clearly, the advisors felt the forecasts in the market given by the broker were reasonable and achievable hence the company appears to have been forced to issue the rns stating they would fall short. This tells me the broker note, unlike most, was based on real and respected valuation methods and in fact still stands.
From what I gather, the shortfall was actually due to a delayed contract rather than any major problems, a contract that is now due to happen in Q1, so its more a case of bad timing than missed targets, with LVCG year end being December. Taking into account it sound like this may still happen, and giving some goodwill and further discount just because its AIM. This still suggests to me that 20P is actually very cheap.
Have taken a decent look at the company recently, £11m in assets, models bricks etc. Which are now producing free cash flow. Add this to 2019 revenue, the booked revenue for 2020 and the value added by having such world renowned IP partners as Viacom and Hasbro, at £17m mcap this company is looking very cheap.
Pretty sure theres a hefty seller in the backround, and given Miton have been bailing out of lots of stocks across AIM post the woodford disaster id be tempted to guess its them. Ill be keeping a close eye on this and will be looking to add significantly once it looks like the seller is drying up.
Some genuine questions for the fanatics to ponder;
And some genuine answers for everyone to see.
If the business model is so fantastic, why didn’t they raise a significant amount equity at 50p plus last year instead of getting a high interest loan from Riverfort?
This was a mistake, no two ways about that! They absolutely should have lowered the placing price from 65p to attract more money, however, in their defence its clear they did not anticipate the level of demand that followed from the Nickelodeon contract so grossly underestimated how much working capital would be required in the near term. RF facility supported the raise without further dilution at that time. This has now backfired but not a disaster, the company continues to grow at an astonishing rate.
Surely if cash flows are so reliable any number of institutions would be interested in investing £10m at this level? Pay off the debt and not worry about raising ever again.
As per the RNS in December, the company are actively working on such things, and have recently announced EIS status also ''The Company is also pleased to confirm it has engaged finnCap Group plc to advise the Group on securing debt funding to support the Group's growth plans and the Group confirms that it has already engaged a number of financial institutions to assess their appetite to provide debt financing. Further announcements will be made as appropriate.''
If it’s such a steal at 20p, why have no directors bought shares in the last week? Indeed no director has bought since last June...
That's fairly easy, the BOD are almost always inside so very difficult to purchase in the market, The chairman is limited due to his already existing shareholding. Along side this other directors have taken shares in lieu of fees.
Whilst I read this BB regularly, I rarely comment on LSE. Mainly due to the fact theres plenty of people like yourself who spend their time posting all the negatives because you can, and, very often if not always you are not interested in anyone's answers or looking at things from a realistic approach. Nothing anyone says will make a difference, the company will either deliver on their objectives or they wont so you crack on.