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On 15 October 2019, in response to an unsolicited question posed to him by another member on this Board, Scott Richardson Brown set out in a post his impressions of Nick Trew when he was CEO of PFP, as they related to certain past negotiations conducted on behalf of PFP with third parties that had failed to bear fruit.
In his brief ‘off the cuff’ and incomplete observations in reply, relating to these past events, incidentally Scott made certain references to Richard Jennings and his role in those events and also, tangentially, to Align Research Limited.
Scott wishes to take this opportunity to withdraw unreservedly all of the observations made in his post. With hindsight, he regrets having made them and acknowledges that they may be open to misinterpretation.
Both Scott and Richard wish to record the fact that they have settled their differences in this regard amicably and look forward to doing their best to improve the fortunes of PFP and its shareholders in the future.
I’m afraid I’m at a loss to understand why you think I’ve been disingenuous Richard so you’ll need to spell it out.
I’ve never doubted the licence has considerable value and still believe it does even though I accept some people don’t think it does and others think it has huge value, I’m in the middle given I’m normally quite conservative. Better to under promise and over deliver if you can.
Very good question based on today's RNS I would say a crude way of valuing the asset might be along these lines, clearly lots of reasons for people to disagree and pick holes in this and have their own view but one logical way might be along these lines.
Peak valuation of PFP I think was about £70 or 75m in 2011, let's be generous and say £75m, but they had £10m cash in the bank. Clearly the market was very different then, as people have pointed out, Kenmare had a lofty valuation but has struggled over the last 8 years and clearly our asset whether or not we like it has been tarnished by the last 7 years of struggles. So even if we were to get it back 100% logic would indicate that it shouldn't trade anywhere near as high as before because of the uncertainty and market conditions having changed etc..
So let's say if we got 100% back we only received half that value on the market, that would value the Company at £37.5m. So let's call that £38m, and that might be generous as we haven't discounted the previous market cap for the £10m of cash we no longer have.
Now if we only get back 30% of the licence in some form of minority interest as is being mooted here then that would indicated a value of £11.4m for 30% but then you should discount that a little further as a minority interest is always worth less. So you could be talking £10m or less easily.
I would find that depressing as it only gives a value of less than 3p a share but it's only one way of looking at matters. Equally if more capital is required to get to this point it will clearly dilute the share price further.
Anyone in the industry will tell you that although our NPV is great and the $1bn+ value shows the huge future potential it equally isn't risked for where we are today and how much capital has to be raised etc. and it's difficult to use this as a measure of current value as it's to do with the future and total future earnings not today, it's a very optimal number. You only have to change one number slightly in a spreadsheet and the outcome can change wildly.
Saying all this you can also argue that past market cap is irrelevant but I do think it's how some investors will look at matters. On the flip side you could say the NPV is now higher than it was back in 2011 so we should assume a much larger number than the previous market cap but that logic should also work for people like Kenmare where I would argue it doesn't and I think you have to assume shareholders will be lucky to see the full value being returned until there is confidence that nothing is going to happen to the asset again and that will probably take years to convince people of.
Logic2 in answer to your questions some thoughts here, but clearly I'm on the sidelines now the Company know the latest etc..
So to your question about the Veloso's, as announced yes I think they were very keen and see no reason why they still aren't to conclude something. In theory it's rationale for all parties to want a solution, it's been nearly 8 years of nothing which doesn't help anyone. However the two shareholders are very different parties with possibly very different agendas.
AFG might help, but all evidence indicated to me that continuing to use them wasn't a professional way to move forward. Once you can't trust people it's should be time to move on but some people are very good at pulling the wool over others eyes.
Addressing some of the nonsense from HChanster who is in touch with Richard Jennings by the looks of it a lot of what has been posted there is either untrue or shows a complete lack of understanding as to what is actually going on.
What for example has Hong Kong really got to do with anything, if you knew anything about AFG or the situation you'd know virtually nothing. It's like saying that just because you have a registered office in London you must know someone else in London.
I've no idea why you have mentioned Nick Trew, what's he got to do with anything, all we have both wanted is a resolution for shareholders. If in any doubt I have in black and white clear evidence of false invoicing and a document we were told was fraudulent being produced and in my view this was probably the tip of the iceberg.
It's obvious I failed because the Company didn't get the licence back under my watch so thanks for stating the obvious, however equally I can't force a Board to do what I believed was the right thing can I so if it's going off the rails you need to get off the train.
Remember at the AGM the resolution to allow the issuance of shares for cash was rejected so I believe the Company would need shareholder approval for any future issue unless they get a new resolution passed at a General Meeting.
Well Logic2 you should be very interested "in your bet with Richie" as you put it because people should be held to account for their actions. Actions speak louder than words. So when they claim to be one thing and turn out to be another doesn't that information help all concerned to form an opinion or is it best left untold so people only hear the nice positive parts where the largest shareholder drives his own agenda and everything is rosey?
You are right in that as CEO I felt my main role was to advance and to protect shareholders interests but when you realise that you can't do this and the people around you are blind to the truth then you can't help any longer. I've spent my career sniffing out BS, fraud and other nonsense and this had it in spades, I needed a strong board and had a weak one. I never want to be somewhere where I can't add value or I don't trust the people around me. Nothing was forgotten in what we said, there was no mention of the other partner as they weren't being talked to but my strategy was that this was absolutely the next step but it never happened. The information I was being fed was limited and increasingly I became more and more concerned about AFG via Heine van Niekerk ever delivering. I hope to be proved wrong still but so far I haven't been, all goals/timelines etc. sailed by with little happening and almost no flow of information and with all the antics going on I had little faith shareholders would be delivered with a fair and timely solution, they've been working for the Company for nearly 18 months now on something that was supposed to take months. I've not seen much to give me any increasing comfort that things will change but hopefully the new Directors who are I think well intending can deliver a cracking deal asap but if that AFG contract is renewed I fear we're in for the long haul and all going to be disappointed.
Longandwrong, I obviously can't speak for the Company as to where they are now etc., but when I was involved the Company, via AFG, had in effect an agreed position with the Veloso family which was announced but as you say they are only half of the issue. There wasn't any position agreed or even contact with Cavaco but maybe that has recently changed but this caused me concern as you can imagine as as others have pointed out you need to get back 100% of the licence and anything less will be unfinanceable and therefore unconcludeable. No contact ever seem to be made once there was a position with the Veloso family to move onto the other shareholder to join him into the proposal but hopefully that has all changed now or they have a very good plan if not!
I don't know what is happening to half the posts that appear to have been deleted but I'm certainly not requesting it, I'm more than happy for the facts to aired if Richard seems to want to although he does like fiction.
I'm more than happy to address in details any of the accusation Richard has been throwing around, as you'd expected there is no context and often limited if no truth in what he's being saying about me, at all times I did what I believed was in shareholders interest, did I get everything right, no, would I have one things differently, with the benefit of hindsight yes. However as Richard well knows because I wouldn't let him bully the Company into doing some of the things he wanted, I was always trying to do what was right for shareholders, and by that I mean all shareholder not just the largest or large shareholders. To the point where I was so very unhappy with what I uncovered and other people's actions I had little choice but to leave given the support being given to those who I considered up to no good. I warned about this in the first quarter of 2019 as Richard knows and because he and others wouldn't take any action, which he's entitled to do, we are where we are today. I take no pride in being right as shareholders are suffering as am I but someone needs to listen and sort this out asap. I hope with the changes to the Board this might be possible as it was entirely dysfunctional when I was there but you also have to be very careful about overtly large shareholders who only act for themselves.
So let's move onto the bet then which Richard is now trying to alter. Richard as we all know loves throwing bets out there, he's done it on numerous forums to many people and in private too. He's tried to make all sorts of bets with me in the past. Why does he do this, in my view he must think it shows some sort of power or assumed wisdom that he must be right because he's prepared to make a bet and put his money on the line. However we now know he isn't, he's demonstrated in our bet where there can only be one winner that he isn't that man of his word and trustworthy and so pious as he always claims, he's actually sanctimonious and totally hypocritical.
I didn't want the bet, he was the one that threw it out to me. Again he probably did it as some power play because he of course is always right! Either he would win or I would win, there is no draw possible. You also can't change the bet after the event as now seems to be the case. He made the bet, we agreed the terms which I was very clear on to ensure clarity and then we waited to see who would win. I hoped for shareholders he would win but as I suspected the end of September arrived and I had won the bet.
He's now not honouring it, as I've said before that tells you everything you need to know. He can try to change it after the event as much as he wants, £500 to some animal charity etc., but a bet is a bet, you word is your word, or not as the case mayb