Member Info for Tapp

No change other than to increase debt projection.

Report is for personal use only so you need to register with Cenkos to receive it.

See my post 30 Jun 2023 20:50.

I wonder if Arun/the company will advise the market of the net debt figure at half year so headroom in facility is known and urgency of increase facility/raise can legitimately be allayed.

Taking on more debt to service debt is not sustainable. Given directors track record, whilst they may have a plan, delivering it is another matter.

Whilst I respect that Xenor is not debating their post regarding understanding of the financials for those 13 that recommended the post I’d highlight:

1. The business had a Gross Margin% of c20.6% in FYE Dec 22, they project this will be 20-23% this financial year and aspire to 24-27% thereafter. A 20% EBIT/Operating margin % has never been mentioned by directors or broker for that matter only by Xenor.

2. The underlying Xenor outturn mentioned:

Actual - Revenue: £28m Operating Loss for: £58m (Total 70m)

Xenor re-stated - Revenue: £63m Operating Loss: £23m (Total 35m)

This example shows a 100% Operating Margin % not Xenor’s 20%.

3. Accrual accounting principle – Xenor’s suggestion of inappropriate accrual accounting in relation to contracts i.e. all costs and no revenue suggests the CFO and auditor are fraudulently misrepresenting the underlying profitability of the business. I do not agree.

4. Current cash flows – are not fine the business is heavily loss making and burning through so much cash an increased debt facility/equity raise is needed. Revenue is most certainly not covering costs.

5. H1 23 is going well – if this is the case all the business has to do is provide Q1 MI to evidence this. Simples.

I think that figure includes leasehold interests, excluding, my estimate of “bank debt” is c£78m so v little headroom.

More debt will not do anything to improve the c£50m insolvent balance sheet, in fact, it will only make it worse.

An equity raise would or selling an asset with hidden reserves to pay down debt would.

You ask me "show the maths how you were %60 down and made a profit"

I've no idea what your talking about - maybe I will leave this conversation now.

No one's running away, I'm just not going to trade insults and if you don't understand how businesses are valued something for you to research. Best of luck.

Of course nothing to do with them running out of cash. Good luck.

The information was all there at the time - see if you can work it out.

The £6.4m of costs for discontinued contracts, I assume is in relation to the Saipem contract, looks like an operational disaster.

£62m of debt as at Dec 22 plus pro rata, Cenkos projected cash burn for FYE Dec 23, of c£16m puts debt at c£78m now (against a facility ceiling of c£79m) so sorting out new debt deal or an equity raise as auditors confirm is “a material uncertainty and may cast significant doubt on the group’s ability to continue as a going concern”.

Looks like market valuing business at c£102m is pretty generous on this update.

I tend to post when financials or a trading update has been made available, there is no link to share price. My view is formed from the few facts that are available to the public, you can interpret them as you like.

Cenkos their broker and “advisor” less than two weeks ago was advising the market they were expecting a loss of of £57m ouch with a management team proven at not delivering forecasts.

Is this business worth c£100m?

John Wood has now taken Cenkos and Astra Asset Management with him. I’m surprised but is a very interesting business to monitor from a safe distance. If you can accept break even will always be next year this opportunity is definitely for you - good luck all.

When a 70 million facility has been agreed legally and perhaps more importantly reputationally it is very hard for a lender to row back from these things.
Committed facilities are on balance sheet (RWAs) versus an uncommitted which are not so usually have a benefit to borrower in that they do not have to pay some fees e.g. non utilisation which are appropriate for this type of facility.
It's a not entirely clear whether it's a good or bad thing.

IM has a value of £35m-£50m the market currently values the remaining business at minus £5.5m or positive £9.5m.

"Tapp,one creditor is gone for 15milion too,did you see that?? haha"
No which one?

Stokey not negative just realistic one can’t polish a t**d but you and some here do like to roll it in glitter. GLA.

Hello dilution and c£44m debt.

My mistake you’re right it’s about this discussion board.