If you would like to ask our webinar guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund a question please submit them here.
Fantastic news , well done AFC!
Hi Daz , the Middle East is the common term for a region consisting of countries in "southwest Asia" and, usually, at least part of North Africa. So no need to worry there.
Hi Git.
I just wanted to say thank you for sharing that information on Group Relief , because I learnt something and it helped me think things through some more. It was very useful information.
Hi Git.
Yes, I know what it is, thank you. You are just digging into the bones of the Speedy and AFC joint venture (JV) and finding interesting information that you could interpret as bad if you are pessimistic or optimal in another sense. Here is the explanation of what you are talking about for others who may not have seen this https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm80105 . In other words the shares in the JV may be more than 75% owned by Speedy Asset Services to allow group tax relief for Speedy Hire. That needs clarification though.
To me if this is correct it is still a very sensible thing to do. I would interpret it as Speedy being able to invest into AFC during the preliminary period of the JV knowing that if the JV is initially loss making, they will at least be able to get some tax relief on their investment? Why would you not do that, as it helps both companies? Speedy investing and getting tax relief. AFC sell into the JV and get money for their sales.
I do not really understand your surprise that the first year of the joint venture may not be profitable. This is the year they need to spend and invest to build up a stock of towers and fuel cells to 'hire out'? Does it really, really worry you that there will not instantly be a profit? It does not bother me one iota.
I would say realistically this is the beginning of operational production for AFC rather than development. Amazon started operations in 1994 and did not make a quarterly profit until Christmas 2021. Their first full year profit came in 2023. And they have done OK. So, if you are hoping for instant profit, I fear you will be disappointed.
But on the plus side there are many more irons in the fire and together they are a reason to be optimistic. We all look forward to the first sales and rentals to confirm the show has finally started, of course. Hold firm.
Hi Git. Thank you for that. Yes it makes sense now. The right thing to do for the team basically. It all helps.
Hi Git. I understand what you're saying. We will need to await clarification on the actual ownership and profit and loss split.
Hi Git and lastly I am very, very happy for Adam to use the funds I have given to AFC to go to COP and talk to TAMGO and other potential clients in the region and the rest of thew world. I can't think of any similar event where so many potential clients would be gathered in one place. A fantastic marketing opportunity. Business is largely about the relationships you build with others isn't it?
... and I just meant to add I doubt Trowers and Hamlins would mess this up, as it would not be good reputationally for them.
Hi Git. I think you are worrying about nothing. I see it as follows, let me know what you think as I am not an expert.
A PSC doesn't have to be a person it can be a relevant legal entity (RLE) i.e. a company. See example two here
https://www.bclplaw.com/a/web/150130/PSC_rules_-_Your_questions_answered.pdf
In this case (our JV) that RLE is called "Speedy Asset Services" i.e. the company that is formed of two directors from Speedy Services and two directors from AFC. This JV has the same address as Speedy Services. Not sure that is an issue a surely you can only have one address for an RLE? And the RLE has probably 100% i.e. > 75% control
https://find-and-update.company-information.service.gov.uk/company/15264396/persons-with-significant-control
As Speedy Hire itself seems to have an RLE called "Speedy Hire Plc" i.e. not "Speedy Asset Services", I believe this is a completely separate entity purely for the JV i.e. "Speedy Asset Services".
Let me know if you disagree with that, as genuinely I'm not 100% sure.
Thanks for the info Maximillion69, Mucksy and Stock. I'm pleased Adam took the brave decision to raid the petty cash and go to COP28UAE rather than stay home and get his forms sorted. At least he seems to be able to prioritise things correctly. Phew.
Fair enough Daz and Thetruthgb, I hear and understand your pessimism. But I'm not worried.
I am looking forward to the Speedy conference on the 29th and Speedy Hydrogen Solutions launch on the 30th. That will be interesting. I am optimistic that we will have further news before year end too. I think they did well to get the Speedy JV sorted somewhat earlier than we initially thought.
Hi Daz9643. "All hope is pinned on the final few weeks of the year, but why is this?" It isn't. The success of the company isn't going to be decided in the next three weeks.
Success will be built from compounding growth in AFCs rental and sales market over the coming years.
The following two items in the Autumn statement look like probable benefits to AFC energy and Speedy Hydrogen Services.
Hunt commits £4.5bn to manufacturing up to to 2030
=============================================
... Money for "strategic manufacturing". Additional £4.5bn of support between 2025 and 2030. This includes £960m for the new green industry firms ...
Chancellor confirms business tax break made permanent (as gingerT alluded to earlier)
================================================
... Hunt has announced permanent “full expensing” for businesses. For every £1 that a business invests in IT, machinery and equipment, they can claim back 25p in corporation tax ... Companies can do this in one go as opposed to having to offset the cost against corporation tax over a longer period. It's a big benefit for companies which invest heavily in equipment, such as manufacturers. Hunt said this will cost £11bn a year and represents the "largest business tax cut in modern British history".
https://www.bbc.co.uk/news/live/uk-67491863
Thanks red_hornet. I think we are in the same place. Agreed, there are a lot of variables for a what-if analysis. Fingers crossed!
Hi Git. Everyday for the past four years I have read relentless posts stating AFC are awful, Adam Bond is useless, World events don't affect share prices, there is no hope for AFC, there's a short so they'll be 1p by teatime and so on. It was so relentless virtually everyone on this board upped sticks and disappeared because it was unbearably one-sided and frankly unpleasant.
Now we have some good news and plenty of the best posters on here have returned, and a few good new ones, for which the board can only be better. Stock does like to share all of his research, estimations and so on, and if it is too much for you just put him on filter? But personally I'm happy to read it all and make a judgement.
Live and let live and all that. I do agree it's much better when we are polite and we can agree to disagree. We're all different, thankfully.
Hi red_hornet. Some will say it is pointless. The curious will try and understand the missing information, possibilities and make some estimates. But if you believe two x 350bar 420kg NanoSun Pioneer Mobile Hydrogen Refuelling Stations have been bought to power 2 Power Towers that's your view. Others may disagree.
Hi Daz9643. I don't think anything has been plucked by Stock. The question was 'how big is a fleet'. The link shows that when Speedy renewed their diesel generator fleet back in the day it was more than 200 units.
I think it is reasonable to say that if diesel gensets are replaced by AFC Power Towers next year that number could be close to the mark, at least. The initial investment / sales to SHS of £4.7 million also support that estimate of a fleet size.
If we note that the NanoSun Pioneer Mobile Hydrogen Refuelling Stations can refuel 7 trucks (substitute Power Towers) at a time https://www.nanosun.co.uk/applications/hydrogen-trucks in 20 to 60 minutes, then I believe it is also fair to assume that two of these stations would be able / necessary to service 200 units on a monthly basis. Perhaps more?
Hi MPO818: Octopus Energy see plenty of opportunity for Hydrogen in their markets.
https://octopus.energy/press/octopus-energy-and-res-to-swap-gas-for-green-hydrogen-at-andrex-kleenex-factories-in-the-uk/
Hi Oggs. I believe DCF is seen as a perfectly reasonable method to value a startup or early stage company like AFC. The brokers will use estimated figures but of course unlike us AFC will give them the real costs for building the products, financial projections we can't see yet and expected return on investment. So probably not completely pie in the sky. Let's hope they are right!
https://www.ey.com/en_nl/finance-navigator/startup-valuation-applying-the-discounted-cash-flow-method-in-six-easy-steps
Hi Mucksy. You'd hope so. Although it would be fun to hear that they had "just been Tamgoed".