Member Info for thegame316

Mcap of only £250m and with a world class oil deposit this is only going one way. I'm just hoping it continues going up a few per cent every day

ive brought in at 41p. Massive upside here. Was waiting for a dip into the 30's but with so many buys and so few sells that doesn't look likely

For once I managed to sell out near enough at the top at 4.9. Couldnt ignore a decent 4 figure profit. This share is still a multibagger in the making though so looking to get back in. Just hoping for a dip in the price.
Fundamentals havent changed here but this is a company operating in Tanzania so expect some delays. Still feel that mining licence application will not be a catalyst in rerate. What the rerate needs is news of funding which should hopefully be announced before the end of the year.
Conservative estimate on news of funding is 10p. But as this is AIM I would also say a spike to 20p+ is also on the cards.

This isn't a get quick rich scheme. Its called investing and if you think that its a case of putting your money in and making loads back in a few weeks then this is the wrong place to be. But if you are looking to invest over the next 12-18 months then yes there is money to be made.
Using the word investors should give a clue that making money from an investment takes time. Its a bit too early to go around saying people have lost money on this share. Back in 2008 same things were said yet who were the ones laughing in 2010. The people who stayed invested throughout the lows and held on till the other side.

Ive followed the lead and topped up with another 3k shares at 41.3p. Cant go wrong at this price, only a matter of time before NY and CAL cinemas open. Its been proven that people will still go out to watch a movie as shown by Tenet making over $300M at the box-office.
Once CINE have all their places up and running then £1 is a realistic short term target especially with the new movies out from November onwards.

This £1 target price is highly unlikely IMHO. That would give a mcap of around £2bn when ITP Aero alone is worth that much. Even if next month the worst case scenario happens and 2.5bn shares are issued that would then mean 4.5bn shares in issue. The fund raise would get rid of the financial uncertainty till at least end of 2021 so would allow the mcap to recover to its correct value of £10bn+ or £2.20+.
Its a win win situation for the private investors. Either it is announced that no funding is required in which case the sp rerates above £3 or a fund raise is confirmed which also allows the sp to rerate above £3. The latter may take more time to achieve its end goal but overall the sp will eventually go back to its correct value.
That is why there are so many derampers on this board. They wouldn't be here otherwise. No one comes onto a board stating this share will collapse without an ulterior motive unless they have mental issues (1 or 2 posters come to mind here, they know who they are lol). Everyone has their own agenda but the underlying common theme is to buy in at their target price and sell it later for a profit. The only issue with waiting for a lower price is that it may not happen and you may just end up on the sidelines watching the sp increase everyday.
The sp is severely undervalued at the moment. The tide may have already turned here, we will just have to see what next week brings

https://www.reuters.com/article/uk-health-coronavirus-airlines-recovery-idUSKBN25Y0P2

"In contrast, Chinese capacity has snapped back to more than 90% of pre-pandemic levels due in part to a summer travel boom, OAG says. It is expected to recover to last year’s levels by the end of 2020, according to industry forecasts.

China Southern Airlines 600029.SS, the carrier with the biggest domestic market share, even returned to year-on-year capacity growth in August."

How does this affect RR. Well there are 45 A330's and 6 A350's that are powered by Trent engines. That's 102 jet engines from just one airline that are bringing in significant revenue from the power by the hour model.
This is just a fraction of total revenue as there are thousands of Trent engines in current service. More importantly the vast majority of them are in chinese/korean/japanese airlines so Rolls Royce is in a different situation when compared to the likes of IAG and Easyjet. Those 2 companies are still in the early stages of air travel recovery but for RR it's a case of maintaining the strong recovery that has occurred so far. In their main markets air travel is significantly higher than 70% of 2019 levels. Of course when you add the other markets no matter how small they are overall utilization is most likely just under 70% of 2019 levels but the key aspect is it is not too much under 70%. This is the magic figure as the base case scenario assumes air travel to be at 70% of 2019 levels in 2021 for there to be no dilution and for RR to have a positive cash flow in H2 2021

As I said everyone has their own strategy with their own risks. Leave it too late and you will miss the ride back up.

No one has said that negative posters are responsible for driving the sp down. The issue is negative posters ATTEMPT to drive the sp down, which is why I will never understand the rational for doing so. We all agree that its the rumour of funding that is driving the sp down but when people post blatant lies to try and influence the sp then that needs addressing.
The problem with waiting for funding news is that it may not happen. The sp could recover to £1.80 next week and the following week we could get news that funding is not required or will be done without dilution or even a placing at a premium to the sp. Nobody knows and more importantly we all have our own strategy and each strategy comes with its own specific risks.

lets say a rights issue is announced next month at £1 and 2.5bn shares are issued. That then removes the financial uncertainty and also means the crown jewels don't need to be sold in the near future. This would also give RR a liquidity position of almost £9bn so no need for future placings for at least 2 years.
The mcap then wouldn't be £2.5bn it would be closer to £10bn so at least £2.20 a share with 4.5bn shares issue. Long term the mcap would have a target price of £20bn once the pandemic is over so thats £4.40 a share.
Whichever way you look at, Right issue or not, RR will not be going under nor will the sp remain at these levels for long. You need to ask yourself why certain posters continually post dozens of times each day trying to talk the sp down. Is it because they think the company is doomed or is it because they know eventually the sp will recover so are trying their hardest to get in as low as possible. We all have our motives but to be honest some of the posters on here are 2 faced. Deep down they know what they are doing but will still try and spread fear amongst others to suit their own agenda.

@Casajaluma- ITP Aero is not the jewel in the crown for RR nor has it ever been. Its a small part of RR's portfolio that brings in around one fifteenth of the annual revenue but is still worth around £2bn. It does not smack of desperation. The crown jewels are the civil aerospace and the Defence business's.
I get you are trying to talk the sp down but at least talk sense if for nothing else then for my sanity. It gets frustrating reading some of the stuff posted on here especially when its just clearly made up stuff

The question isn't what price a rights issue offer will be, it's whetever it will happen or not. At the moment the official line of communication is that the bod are looking into various options but nothing has been decided yet. IMHO if there was going to be a rights issue it would have been announced by now.
RR has over £6bn in liquidity so its not like they are strapped for cash. They could just be waiting for air travel to improve a bit more before announcing they dont need any funding or they could announce a sale of ITP. Nothing is for certain but the market does not like this hence the drop. The fundamentals have not changed though. If a rights issue is announced then at least we will have closure but again i'm inclined to believe that it is more likely a sovereign fund will provide the debt without any dilution. This is from the FT:-

"Rolls-Royce is in talks with sovereign wealth funds, including Singapore’s GIC, as part of a plan to raise around £2.5bn from investors next month, according to three people with direct knowledge of the matter. "

Also from the same artice-

"However discussions over the equity raise are ongoing and one person cautioned that the board has been determined to push the decision to the last minute. "

This indicates that the bod are hoping for business to continue its gradual recovery so funding is not required. But everyone will have their own opinion on this.

is if there is world wide lockdown again and 90%+ of flights are grounded as what happened in april/may. This wont happen again, at worse there will be a few national lockdowns but overall air travel will be at a level that will still generate billions for RR in service revenue. As long as air travel is close to the 70% level then there will be no need for funding. This is from the latest half-year report:-

Near-term liquidity position

Following rapid management actions to reduce costs and secure additional liquidity, we started the second half with liquidity of £6.1bn (comprising £4.2bn cash at end H1 and a £1.9bn undrawn RCF) compared to £6.9bn at 31 December 2019. In addition, we now have a £2bn undrawn term loan, partly backed by the UK Export Finance (UKEF), announced in early July and finalised in August.

There is an inherent uncertainty over the severity, extent and duration of the disruption caused by the COVID-19 pandemic and therefore the timing of the recovery in our key markets, particularly in the civil aviation sector. In our base case scenario (further details on page 24), where there is assumed to be no second wave and we see a gradual recovery with Civil Aerospace returning to around 70% of the 2019 level in 2021 we consider that we will continue to operate within our current available committed borrowing facilities for the next 18 months. In this scenario, in order to provide sufficient liquidity headroom, we would replace the £1.9bn RCF following its expiry in October 2021, with replacement funding of a similar amount.

Based on our base case scenario we expect the following significant cash movements over the next 18 months:

· Anticipated H2 2020 free cash outflow of approximately £(1)bn and £(400)m further cash costs related to the restructuring programme;

· Targeted return to positive free cash generation during H2 2021. However, for the full year 2021 we still anticipate a free cash outflow, albeit at a significantly reduced level year-on-year;

· Expected additional cash costs in 2021 outside of FCF, including restructuring costs as well as the final DPA payment of £(148)m due to be settled in January 2021; and

· Debt maturities of approximately £3.2bn will take place between now and the end of 2021 comprising: £1.9bn additional RCF (currently undrawn), £0.3bn COVID-19 Corporate Financing Facility (CCFF) commercial paper, and two bonds of $500m and €750m respectively.

The biggest markets for RR in terms of jet engines are the A350's, A330's and the 787's and these are currently the first choice for most airlines when restarting air travel as they offer the best fuel efficiency as well as passenger capacity.
£1.40 is the bottom for this share as just ITP Aero alone is worth almost £1 a share and that is worth less than 10% of RR's total mcap.

As long as air travel is over 50% of 2019 levels then there is nothing to worry about. In RR's base case scenario they are assuming air travel will reach 70% by 2021. If this happens then no further funding is required. At the current rate of about 1% increase every 2/3 weeks then 70% will be hit by the end of 2020.
There is an article of flight tracker that states that out of the 3 major engines the Trent 7000 is being utilized the most on the A330 as that is the engine that most carriers in Asia Pacific use.
As everyone know air travel in that region is near enough back to 2019 levels and guess which aerospace company is the market leader over there when it comes to supplying jet engines....

From fr24news.com

At present, the outlook for the civilian aerospace division of Rolls-Royce is very uncertain. Fortunately, Rolls has several other valuable businesses. The one that interests me the most in today’s environment is the defence sector, which manufactures engines for military aircraft, helicopters and nuclear submarines.

Defence activities last year generated underlying operating profit of £ 415 million and turnover of £ 3,546 million. New orders totalled £ 5.3 billion, a record performance. The company says the outlook for 2020 is unchanged, suggesting a stable result.

With the Rolls-Royce share price hovering around 300p, the market capitalization of the entire group is only £ 5.5 billion. In my view, the value of the defence firm alone should cover most of this assessment.

In my opinion, anyone who buys the stocks today receives the Rolls’ civil, maritime and research aerospace companies at extremely low prices. Although these operations are facing cyclical downturns, I see no reason why they will not recover.

Rolls-Royce share price: the right time to buy?
Will Rolls Need a Rescue Plan? The group does great engineering, but its financial history is mixed. Fortunately, I don’t think shareholders should be too worried this time.

When the coronavirus crisis started hitting airlines, CEO Warren East acted quickly to cut spending. In May, East said saving measures had freed up an additional £ 1 billion this year. In total, Rolls has access to more than £ 6.5 billion and unused credit facilities. I think that should be enough.

Indeed, I think the company’s stocks offer decent value at current levels. Rolls has a large market share in several key sectors, each of which, I believe, will gradually recover."

IMHO people will look back and regret not buying at these levels. Tomorrow RR could give their civil aerospace business away for free and still be worth more than twice the current mcap. Just need to get this news of funding put to rest one way or the other and then we can all relax.

IAG's problems are due to Boris "the knob" Johnson. The idiot can't see that we need to introduce airport testing asap. All other major countries like Japan, Germany and France have got some sort of testing in place. This has led to an increase in air travel in those countries as people are more confident of travelling. For some reason despite the air travel industry pleading for this he has refused to implement it.
That is the main reason why IAG is as bad as it is now as its main base is Heathrow. RR on the other hand is not just dependent on UK air travel. Worldwide the number of flights are steadily increasing and that is what counts. There is still a long way to recovery yet but that is exactly what this is, a recovery. At the height of the pandemic when all flights were grounded and there was no idea when they would resume RR's price was at the £2.50 level. Now air travel is at over the 50% level at a world wide level and RR's price is £1.50. If this isnt an irrational price then I dont know what is.
If we can get to november with no funding and then we get a trading update saying civil aerospace has recovered to the point where no further funding is required then a rerate is definitely due.

Comparing IAG to RR is like comparing apples to oranges. One is a business limited to air travel and geographically constrained, the other has other businesses that are hugely profitable and has a world wide presence. Its a bit like saying my local newsagents closed due to covid so the tescos down the road will be closing too as it also suffered a downturn in business.

@Casajaluma- so you are saying the sp will be under £1 soon. That will not happen. It is easy to look at the current downtrend and assume this and its also easy to call people dicks for buying in at a higher price and thinking they did so blindly and assuming they were getting a good price. I hate to burst your bubble but you really haven't got a clue especially on your views of other investors. Most of us have done our research and have brought in based on the fundamentals. Fact is we are in an irrational market and as long as the investor can stay solvent and wait for the market to become rational again then there is nothing to worry about.
The issues with Trent were long known. And if you do your research you will find that there have been more other engines from other competitors that have also had teething problems in the past 20-30 years but these companies are still around. Jet engines are complex machines and things can and will go wrong These issues are being resolved and the cash impairment due to this was incorporated into the sp way before the covid situation.
The market is currently fixated on the civil aerospace business and is neglecting the fact that RR has over £6bn revenue and over £700m operating profit from other business's. I agree the funding news is a major issue but this could also be a blessing in disguise. Right now every deramper is harping on about a heavily discounted rights issue that will decimate the share price yet not one person can prove that this will happen other than rumours on click bait sites.
For all we know they could be in talks with a sovereign fund who would provide the money without issuing new shares. Fact is nobody knows. For me personally ive got no worries. I can afford to wait this out for a year or two or more and I can also average down if the sp does go below £1. But in the end the sp will go back over £5, it could take 1 month, 3 months or 5 years.
And just as you say people can come on here saying positive things and trying to affect the price similarly people coming on here posting multiple times the sp will go below £1 are deluding themselves as well if they think they can influence the sp too

https://simpleflying.com/which-aircraft-types-flying-most/

"Modern twinjets such as the A350 and the 787 families are utilized significantly more often than other airframes. More than half of the global A350 fleet has flown at least once during the last week, with the 787 family being utilized at around 45%."

This article was from May so since then the % quoted has gone up. The A350 is powered exclusively by Rolls Royce and close to half of the 787's are as well. In these times when airlines can pick and choose which aircraft to use, they are going for the ones that provide the best fuel efficiency and these are the ones that are powered by the latest Trent engines.
if you look on Flightracker then nearly every A350 is being flown with decent utilization rates. That is close to 700 engines alone that are contributing to the Power by the Hour revenue model. Add another few hundred engines each from the A330, A340, 777 and 787 along with the regional and private jet engines powered by Rolls Royce and it is clear that RR will weather the storm ahead.

Just filter him. Its not like he has anything useful to say. All he does is post personal insults and wishes people to lose money. Probably because he hasnt got a clue how to make any himself so cant stand the thought of others succeeding. Classic definition of an Inferiority complex.

"Inferiority complex is a term used to describe people who compensate for feelings of inferiority (feeling like they're less than other people, not as good as others, worthless, etc.) by acting in ways that make them appear superior. They do this because controlling others may help them feel less personally inadequate.

With his ego he probably thinks he is doing everyone a favour by imparting his so called wisdom. The more you try to converse with him the more egotistical he gets. He has got the mindset of a child. Best to filter the toff. It will make the board a much better place.