George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Glad to be of service unhooked!! Unfortunately I chased the price down and am sitting on a large loss. I sold some at 70p recently for which I had paid 75p - goodness knows how I wished I had sold the lot. To think a few months ago we were at £1.50 let alone 2 years ago and here we are now staring at a penny share. And the crazy thing this is without large volume selling - just shows the impact of PIs running for the hills and Armistice short selling. They can only have enough funding for another few weeks so the end could come quickly. $8m from Jefferson Capital wiped out in 10 months - pretty sure Tony J will be asking a few questions from his pals at Mount Sinai. That said he's probably part of the team eyeing up whether to take this private - although they will need to commit a lot of $$$ for the next few years - and that's possibly what's holding things up. Next RNS sure will be interesting......can James M pull a phoenix out the flames??? SB
What a fall from grace - a complete investment disaster. It’s not just PIs who have been burnt - core shareholders, II’s and bond holders all virtually wiped out. James M - highly paid I’ll give you that - has lost $30m in paper. Cant see all that value and potential going without some attempt to capitalise the company / but it’s looking very grim. Armistice have made a packet - and that’s the name of the game. We all hung around in hope and that’s not good investing decision making. Another stock for the AIM cemetery. SB
Prior to yesterday SRC had spent £600m acquiring businesses which had a market cap of c. £350m and net debt of £180m. The new deal will increase net debt to more than £600m. Assuming the market places a similar discount on its new acquisition to those proceeding there could be a material medium term slide in the current share price - have to hope new investors are in for the long haul and do not flood the market with cheap shares or this could get a lot worse. SB
Out of interest one of my favourite apocalyptic movies from the 80's starred Mel Gibson. It was called Mad Max (MM). Deal 1 looks like we are paying a multiple of 8 for the businesses involved (745m euro to purchase a business looking to make c.90m euro ebitda 2023). SRC trades on a multiple of just over 3. The scale of debt being raised at near 15 year interest rates is significant (c.7% all in) which will be added to existing overall debt. Still 52m new share options being issued to the management team post completion will ease the pain for some. Shareholders at the end of a long line to see any return here - and from the looks of it there is more to come.....MM2 and MM3 much like the movies. Buy to build. Invest to lose. SB
The end of another rather unhappy week in Renx world. I listened to the Q1 webinar - and in many ways was surprised by the lack of anger from the fund managers invested here - but I guess its not actually their money that has been lost. I have decided to remain a holder (and if you have sold - good luck - and I can fully understand why) given my losses are so large I may as well hang around to see this through to the end. The positives to take from this week - and when I say positives I am trying to justify not selling - focus on three key areas. Firstly we have not seen large scale selling - yes the price got hammered but look like II's have largely stayed in position (we will see if any TR1's come out next week) so there must still be some confidence Renx can get out of this. Secondly there was a strong reference to a financing option being sorted pre xmas. This will be difficult given the requirement of existing core shareholders to minimise any dilution given what they have sunk in so far, the amount of new equity which new investors may require from said core shareholders before committing funds and the cost to the business of additional financing. Lastly, and this is linked to the second point - I believe any new funds being committed will only be done with the express agreement of the business to cut costs on scale - and this appears to have started. Aside from these points there are the updates on medicare and KDIGO due imminently which are clearly important milestones if achieved; and the sales force with a new focus and leadership with highly motivated territory managers are coming on stream albeit not for a few months yet. It goes without saying a huge amount of 'what next' relies on financing to be secured on terms acceptable to the core shareholders; but we have to hope they wish the business to remain a public company rather than a delisted entity. ATB all after a horrible few days here. SB
Have a look at RECI - 9% and loan book looks ok with company almost out of all of ‘risky’ bond positions. I hold but as always dyor. SB
Quick review - declining revenue, failure to deliver expected savings, cash burn still in excess of $10m per quarter. Current cash will last until February 2024. Vague reference to new funding and looking to start physician targeted sales force in 2024 possibly with benefit of Medicare approval in 2024. Expect this will be heavily marked down at opening. Renx is now on life support - I am starting to consider the possibility this is deliberate to allow a delisting to occur. I hope I am wrong. SB
MS remains pretty much the only customer Renx have - and the big issue is that the 1200 tests per quarter which were being pushed through the MS testing contact are no longer being fully reimbursed - so the harsh reality is Renx's revenue is now c.60% of what is was a year ago - it is going backwards. Apart from that we have single test decision's in New York which must cost more to admin than the test itself and the new 'testing' contract with Atrium/Wake Forest which does not appear to have started yet. Apart from that its just 'wind and p**s' as my old boss used to say. Insurance coverage, partnerships, eversansa sales team, middle east distributor, clinical advisory board, patents, real world evidence - I am sure you get the picture but anything to mask the fact no-one is buying the company's sole product. Innovative - absolutely. Desired - absolutely not. In the meantime, short positions are destroying what value remains in the business in a familiar vulture circling the wounded animal scene. We are approaching the 99% club - almost a complete loss of the company's peak valuation. Sorry for the negativity but this is getting very serious imo. SB
No problem Datron - its the Q3 update you are looking for. Share went ex-dividend (1.75p) today hence the drop. Gravis run a few funds - about £3B in total - although currently all valued significantly less. I am also invested in their asset backed fund - GABI - which has also been hammered recently and yields 10%. That business has a lot of short term loans due to be repaid over next three years - and there is a continuation vote in May 2024 where shareholders can vote whether they wish to see that company wind itself up - presumably by paying back capital to shareholders when loans expire rather than reinvest - so it may have a limited shelf life but could deliver some impressive returns. GCP has an average loan life of 10 years so i don't see the same issue arising here - although it is due to receive £300m of repayments in the next four years alone - bearing in mind current market cap. SB
Evening Dartron. Try this - although I had to register but perhaps that was for the live on the day option. https://www.graviscapital.com/webinars
Still dividend hunting eh - this is a good one to buy and hold imo. Especially if you've just paid off your mortgage :-D SB
I guess I'm just writing down the risks here as I see them Hawker - we all know PI's are the most likely to get shafted here if it goes down. Not that we are there - and perhaps there is a plan which will become apparent (new investors, rights issue, placing, debt, partnerships - lots of options) - but time is not on their side. $25m in the bank in June 2023. $8/9m net spend per quarter - takes us into Q3 2024 (Jan - March 2024) - although that is based on an estimated spend rate with the announced reductions and a sub $1m per quarter revenue. Could be grim on Tuesday without any significant announcement's. SB
I just managed to listen to the webinar and echo your comments ragged. Phil came across well and articulated in some detail the NAV issues and the remedies which GCP are undertaking to resolve - accepting the wider funding market is negatively impacting to a much larger degree than the business can fully resolve. It was interesting to hear that more clarity can be expected when the full year results are published in December. One area which could be explored imo would be linking the dividend to some form of inflation uplift - the current yield is fantastic - but time doesn't stand still. It was also interesting to hear the business articulating it is an equity holder in some of its projects rather than a 'lender' - I assume where they have triggered contractual step in rights on projects in distress or where risks were mounting and their expertise could be brought to bear. Well done on your timing deepjoy - plenty to look forward to in 2024 here. SB
So looks like M+G have been in serious offload mode in last few weeks - north of 30m shares sold into market which would go some way to explaining the recent declines here. Why they are selling shares in a business which is trading at an ebitda multiple of 3 is known only to them - and is perhaps more reflective of funds moving into cash positions to take advantage of current macro opportunities (interest rates, bonds, gilts etc). It does continue to remind the business that shareholders need a reason to remain invested here - and they cannot overlook the disconnect from SRC's peer group - where Breedon is trading on a PE multiple almost 2 times SRC. I also wonder if some PE teams are not having a look here - the upside would seem considerable if all is as we are being told. SB
One scenario which has not been discussed is to let the company go bankrupt early next year and the major shareholders effect a pre administration deal to buy the IP and business assets for a fraction of what they worth now - not that there is much value left in the business. A horrible scenario but cannot be discounted anymore. I’m pretty sure next weeks conference call will largely focus on short term survival - we already know Q1 revenue will be disappointing because the business is simply not able to issue billable invoices for a substantial portion of test sales. Has there been a material reduction in quarterly costs - with so little cash there needs to be clear evidence management are stripping back all costs and focused on sales - what on earth are the current sales team doing. SB
They are listed as C Mills because he is a director (chairman) - but it is the two Harwood funds who own the shares (NAS and Oryx) on behalf of investors.
There are a number of other smaller funds who hold positions - Randy Bartons pinnacle for instance - some of whom upped their stakes in the summer after FDA roadshow. They will be seriously p***d if this goes private. SB
Morning both. What a share!!! I am trying to convince myself to remain invested here - don’t get me wrong I would be selling at a huge loss but I’ve been in similar situations where I ended up with a few pence per share and there is the potential this is where we are headed here. I sold some a month ago and we have lost another 50% since then. I saw the team at the kidney convention and it was all smiles and high fives - but behind the scenes there is a looming reality which is now being priced into the business. We have to hope that the core shareholders remain supportive of the business and are prepared to put more capital into the business to keep it going. Q1 2024 numbers were covered previously - 1200 test sales I think - but not all were billable so poor revenue. Update end of this month? Possible shareholders are waiting for any evidence of an uptake before further commitments - or pushing the button on a fund raise. The option to take the operation private grows - and bring it back in a few years if/when revenue materialises - but that is disaster for PIs. Wish I could be more positive but it’s been downhill big time after the FDA high. SB
Just a point of clarification - the capital markets day is scheduled for 16 January 2024. GCP will be hosting a webinar on 3 November at 11:00am - day after latest BOE interest rate decision. We should have heard by then on timing for the next interim dividend. SB
Well spotted that JRC increased their position Hawker - still holds them at 8.8% due to increase in overall shares in circulation but at least it shows they are still interested here. Would be great to see some positive news on the Medicare determination - although for the time being it looks like market is waiting on funding being addressed before it decides on where to go next with valuation. SB
Dec dividend has not been announced yet - will be early next week - will go ex dividend about two weeks later - not next wed which is probably just a publication best guess from previous years. SB
That's probably not far off the mark Tagvil - a 9% yield seemed to be sensible with interest rates at 5% and a 4% premium for risk adjusted assets. But fair value in the current market has lost the plot - and shows no sign of any improvement in the near future. GCP have evidenced the prudent valuation principles in their portfolio with the recent biomass transactions and yet we are still approaching a 50% NAV discount and a 12% yield. I have been a buyer in the 90's, 80's, 70' and 60's based on the underlying strength of the assets (short term power price adjustments aside), managements conservative approach and the volume of loans which will be redeemed in the next three years to repay the RCF, continue buybacks, improve capital returns and make selective investments at higher rates of return where available. The markets will hopefully return to some degree of normality in 2024 and GCP should benefit from this in time - in the meantime - c.12% yield at current pricing seems too good to be true.....SB