Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
So peel are building the FOAK this year, 4 more in 2021,who knows how many in 2022?
Hi Mat, yes you are right.
Thanks for that Kenny.
This is interesting
"This variation of the agreement is as an interim agreement pending the acquisition by PHE of the whole share capital of W2T - the final 6 systems in the co-operation agreement are unaffected by this variation- this agreement enables Peel to accelerate the program significantly and it is anticipated that Peel will build out this second tranche in 2021."
So if the second tranche of 6 units are to be built out in 2021, does that mean that the whole of the first tranche of 5 will be built out in 2020?
If so that is faster than most people would have envisaged and will affect the sp quite significantly.
You're welcome said telephoneman.
Here you go operastar you can contact him here howwhite@hotmail.com
I don't think that the W2T buyout is just about Protos.
All long term holders will recall this paragraph from the 23-12-2019 RNS re. negotiations to acquire W2T.
“The directors of PowerHouse believe that the post-acquisition enlarged company
will be better understood by its customers and investors, with rights to
markets and developments in-house, and will be able to present a clear and
unambiguous message about its innovative British technology which provides a
solution to the increasing problem of unrecyclable waste plastic.”
My guess is that the possibly very lucrative talks that W2T are in with Toyota are being hampered by the complications of the PHE/W2T relationship and so we had the 23-12-2019 announcement to solve the problem.
I know there are various posters on here who advocate giving 90 days notice to W2T and reclaiming the rights to distribution.
The Japanese are a very honorable people and after being in talks with W2T initially in the UK and then Japan for the past two or three years I am sure that they would not be too happy with PHE if they took that route.
And don't forget W2T have done a lot of work on a business model in Indonesia that not only helps remove the waste plastic problem and make electricity available to villages who have never had it and towns with unreliable supplies but will also give a very good income to those who wish to collect the plastic and deliver it the the DMG sites.
This rise is far more likely the result of the last RNS re. Peel taking over the first 5 sites for the PHE DMG, ergo funding is now sorted.
PHE have been punished relentlessly by the market over the past couple of years as they struggled to find the funding for the FOAK, now it is in place for the first 5 and we are re-rating to where we should be.
I can not say with 100% certainty but I really DO NOT expect a placing to raise cash...we do not need it, in fact the PHE coffers have just increased by £100,000 with a payment from Peel.
But there will be new shares placed to buy W2T, this is already factored into the share price.
One further point, we do not need monies for a factory, PHE will/have appointed engineering companies for the manufacturing.
Hi Gadams, yes we should be back to a fair valuation quite soon.
The support from Peel is massive and shouldn't be underestimated.
See my post at 8:17.
For what it's worth, my thought's are that we should be approaching a similar market cap to AFC Energy, £100m in the short term.
In the medium term, once the first unit is up and running at Protos we should be approaching ITM Powers market cap.
All IMHO.
So, stokey and newboy, why don't you talk to W2T instead of speculating.
It just doesn't make any sense that stokey in-particularly spends so much time writing long messages on this board that are incorrect....just contact W2T and talk to them.
A very well thought out post Piltick.
Pretty much as stokey says.
If you think about it, PHE will have low overheads, so what's left over after those overheads direct a percentage to dividends and the rest to re-investing in SPV's for further income growth.
Hi Piltick, yes absolutely.
For every 10% stake they took in a H2 plus electricity 35t/d DMG project it would bring in an extra £447,000 profit per year.
Hi Kenny
I think you will find that the 683,000 tonnes is an annual export total, not a weekly one.
So the amount that is no longer being exported would require 56 35t/d DMG's to dispose it.
If they were electricity only that would generate annual income for PHE (on a royalty only basis) of at least £22.4m.
But it is highly likely that a good proportion would be H2 plus electricity producing.
For arguments sake lets say that all the 56 units produced H2 plus electricity, that would generate gross income of circa £7m per unit, based on 35MWh of electricity per day at £70/MWh and 2 tonnes of H2 per day at £7.50/kg.
After deducting a generous £1.5m opex that leaves a 20% royalty for PHE of£1.1m per unit and as said for arguments sake they were all H2 and electricity producing that would be £61.6m per year for PHE.
So PHE could expect somewhere between £22.4m and £61.6m per year royalty from said 56 DMG units.
Hope that helps.
Hi Kenny, how do you get 3,902 DMG's?
Yes, they will collect revenues for the waste, something like £80 per tonne, possibly more.
That's £2,800 per day for a 35t/d DMG unit, £980,000 per year if operated for 350 days per year.
After deducting the power required to run the DMG unit there are 81.6MWh per day for export, for the first one at Protos this will be fed into the Protos private grid and I expect this to be at £70/MWh.
So, £5,712 per day, £1,999,200 per year, again based on 350 days per year operation.
That adds up to £2,979,200 per year. It is also possible that the heat recovered from the process could be sold for circa £300,000 per year.
So for an electricity only 35t/d DMG the operator should be looking at earnings of £2m to £2.3m per year after operational costs from which they would pay PHE a royalty of 20%.
Thanks for that BB.
So I assume the ammonia will be derived from steam reformation of natural gas for the H2, the nitrogen separated from air and then the two combined using the Haber process?
It would be interesting to work out how much energy was required (and CO2 produced) to produce 1 KWh from the AFC EV charger using ammonia as the energy carrier.