The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Good work Dr.A and thank you to all those who supported.
Howard can't commit one way or the other but it seems a sensible option to consider.
Hi Dodger47, I've emailed Howard.
Great to see so much support from holders on this important issue, as Dr.A says even if we had a new CEO announcement tomorrow it could be 6 months before they take up the position, we need a good interim CEO ASAP, no disrespect to James Greenstreet but I firmly believe that Keith Riley is the right man right now for the job.
Please send your support to Dr.A if you haven't already.
How's the running total Dr.?
Hi Dr A, that is exactly the sort of thing that I would like to see. I will contact you privately to confirm my support and holding.
Hi GustavK, good post on Monday regarding our new Non- Executive director Keith Riley, quite a CV and just what we need.
It strikes me that he would make an excellent stand in CEO, much better credentials than James Greenstreet, until we get the elusive CEO we have been promised for so long.
And another thing, we don't have a single full-time Executive member on the board, we are being run by a group of part-timers, surely we need this to change urgently, after all this is probably the most important time in the companies history.
Just to underline how good the PHE business model is I would like to highlight ITM's full year results.
ITM had earnings of £4.3m but made a loss from operations of £27.7m.
For PHE, operational costs will be covered by the royalty income of 2 to 3 DMG units, so when we (in the not too distant future) have similar earnings of £4.5m from 9 DMG units in operation providing royalty income of £0.5m each there will be a profit after, operational costs of £1.5m (max), of £3m.
Hi Dr. A, I'm pretty sure that the 3.6Mwh/86.4Mw per day used on the HUI groups post is on the high side for a 40t/d unit producing 2t of H2 too.
When the DMG can produce 3 tonnes per day of H2 the remaining tail gas will generate a lesser amount of electricity too, maybe somewhere nearer to 1.8Mw which is 43Mwh/day .
Hi NutHazard, as far as I am aware the rating of an electrolyser is the hourly rate, so the 24Mwh unit you quote would actually use 776Mwh in one day to make 10 tonnes of H2.
Electrolysers use between 50 an 60Mwh of electricity to make 1 tonne of H2, hence the current high cost of H2 from electrolysers.
Hi z-cars, it's an interesting concept, one that I put to the company a few years ago and it could possibly be economical at certain price points.
We know the price of electricity is going up and the price of H2 is expected to drop, so initially i.e. over just the next few years whilst the cost of electricity and H2 are around the current price it could make sense.
The DMG model looks for £60 to £70/Mwh for electricity selling to private-wire and so the owner could earn £4060 per day for 58Mwh at £70/Mwh.
That daily output of 58Mwh could instead be used to generate an extra 1 tonne of H2 via an electrolyser, which if sold at £10/kg would be earn an extra £10,000 which looks enticing at more than twice the earnings of electricity sold to private-wire.
But if sold at £5/kg would only earn £5.000 which would be worse than selling to private-wire as there are capex and opex costs to take into account for the electrolyser.
And at the target price of £3/kg of HUI it couldn't even compete with selling the electricity to the grid.
It could happen but I have my doubts.
Nicely put Dr.A.
Hi Hypermarlin, yes the 40 tonnes per day is per single DMG unit.
Aw Piltick, I was waiting to see if he could get it himself.
Tatty, read the RNS again........maybe slowly:)
Hi dd, I'd like to think that as long as PHE stick to the business model there should be no danger of such an occurrence.
Once the FOAK is up and running next year and interested parties from multiple countries/regions around the world step into the ring PHE as a company should grow faster than any single licensee.
Lets say that the average return after allowing for capex, opex, PHE royalty and taxes for a 40 tonne DMG unit producing 58Mw of electricity and 2 tonnes of H2 per day, with £80/t for waste, £60/Mwh for power and £5/kg for H2 is circa £2.5m (and from that they will no doubt be returning dividends to their investors, at least in HUI's case).
We have a scenario where Peel and HUI will eventually (due to the three steps in commissioning) have profits of £2.5m each on their first unit and PHE has revenues of £1m (gross).
Now lets skip down the road a couple of years and proof of concept is history and DMG units are being built and commissioned in less than six months and are able to immediately gain revenues from sales of electricity and H2 (and heat) unlike the Foak and there are now 10 licensees.
For simplicity lets say that Peel and HUI now have 10 units each in operation as they had first mover advantage and the other 8 licensees have 6 each.
We have Peel and HUI with net profits of £25m each and a further 8 licensees with £15 each but at the head of the pile is PHE with £98m gross, around £72m net.
Skip down the road a tad further to 2030 where TY predicted 5,000 units world-wide and Peel has established 70 units in the UK that gives them £175m net, lets say HUI has got a few more (but not all) countries in Europe and has 150 units to it's name giving £375m net.
But with royalties from 5,000 units world-wide giving gross revenues of £2.5bn, maybe £1.85bn net PHE should be a tough target for the suggested predator.
That's not to say that we won't eventually be snapped up by a multi-national some time in the future but hopefully not too soon.
All these numbers are arbitrary, one thing which would make the biggest difference though is the rise in production of H2 from 2 tonnes per day to 3 tonnes per day which would have a dramatic affect on a licensees profit but I am sure that PHE would also raise the royalty fee to compensate.
AIMHO
Thanks Piltick :)
Hi Aldebaran, when PHE got the backing of Peel it gave us credibility, we had a large independent UK company who had vetted our technology and wanted to play a major part in the UK roll-out.
Now HUI, our licensee for three countries (so far) in continental Europe is ready to sign a deal with the worlds largest gas producer to provide engineering services to them.
Linde have also thoroughly vetted the DMG process before entering into this agreement which again gives PHE's technology great credibility.
The Peel deal opened up the UK to a speedy roll-out, yes I know there has been an annoying delay as plans were altered for the FOAK to maximise H2 sales, but those delays will soon be behind us.
The HUI/Linde deal opens up the whole of Europe to a fast roll-out, in my opinion, a market 10 times larger than the UK's.
It will also ensure the success of the HUI IPO where W2T struggled.
IMHO over the next few weeks we will see the share price back into double figures.
Reading between the lines it is possible that the enhancements to the FOAK design that Peel requested were due to investors concerns about H2 revenue streams in the early stages of operation if the H2 was only available and dispensed on site.
The enhancements facilitate the distribution of H2 to customers further afield thereby potentially maximising revenues for the project investors.
If this creates a short delay to the start of the on-site build it is of minor consequence as this stage should only take 2 to 3 months to complete, whilst the DMG itself will be built off-site at the chosen engineering company ready for delivery as soon as the site works allow.
Let's not forget that HUI in Poland are moving forward at great speed and Tim has already said that it is touch and go as to who delivers the FOAK, so if the UK planning snail were to delay Protos more than expected HUI are well placed to deliver the FOAK early next year.
It is without doubt comforting to have two projects in different jurisdictions running in parallel.
Hi Dr. A, many thanks for sharing your notes on the HUI IPO.
It looks pretty conclusive now that the German engineering company that Tim Yeo mentioned in his chat with the Americans earlier this year must be Linde.
It just gets better!!