Member Info for TheTrotsky

As snafus go that was quite a big one! The sp was still materially under water at c6.4p for the day before the release of that RNS at 4:14pm advising that Chris Akers had INCREASED his stake from under 3% to 3.19%, at which point the sp shot up by almost 1.5p at the close only for the RNS to be corrected at 4:38pm to advise that Chris Akers had, in fact, REDUCED his stake from 3.19% to under 3! The company and its advisors had all day to prepare that original RNS and they couldn't have got it more wrong if they'd tried!

Will be interesting to see where the sp opens tomorrow but, all other things being equal and no newsworthy RNS tomorrow morning, one might expect the sp to open significantly below tonight's close. If I'd bought in after that RNS and the price opens back down at (say) c6.4p tomorrow morning I'd be smarting (at least in the short term).

The constant downward spiral in the sp is becoming tedious, to say the least. In the absence of any material news (not that any is to be expected) there's not much management can do to boost the price but today's LTIP awards are a bit of a slap in the face to the long suffering shareholders. That said LTIP awards are generally worthless unless there is some material improvement in both the business performance and the share price; I'm not sure of the exact vesting criteria for RWS's LTIPs but the status quo is invariably not one of them.

LSIMO, I Iooked at the DNA funds (I believe that there were three) several years ago and decided againts them. In part that was due to access, I didn't seem to be able to trade them through AJ Bell or ii, but primarily due to concern over the resale value of the A380s (this is/was a signficant part of the funds' valuation). Although it was clear that Emirates was honouring its existing leases (despite Covid), it was unclear at the time (and perhaps still remains unclear) whether Emirates would/will extend its existing leases and, if not, who would take up their options and/or buy the planes. The second-hand value of these planes was in the pits at the time because several aircraft owned by other carriers were already mothballed beacuse of a lack of buyers.

The original business rationale for the four-engined A380 has now been superceded by more fuel efficient two-engined aircraft from both Airbus (A330 and/or A350) and Boeing (777 and/or 787) and Airbus has been forced to cease production signficantly ahead of plan. The only thing still currently working in the A380's favour are the well publicised quality issues at Boeing and the ongoing supply chain delays at both Airbus and Boeing, which are impacting production volumes.

I'm not sure whether my origianl analysis has fundamentally changed. Many, but not all, of the mothballed A380s have since returned to service but I'm not sure that they are being used out of choice or necessity. BA does seem to be spending money to upgrade their fleet but I'm not sure whether their decision would be different if more A330, A350, 777, 787 etc were rolling off production lines.

I think the key for the DNA funds will be if Emirates extends (which it may well do). I think picking up alterante operators or selling the planes at the end of their current leases is likely to be far more problematical. You've also got to fatcor in the higher ongoing maintenance costs (both engines and airframe) that will likely arise from having a much smaller operating fleet than originally anticipated.

Https://www.thetimes.com/article/20e5a2f6-bbb0-4d20-82a7-e6aaeee80ca2

Times article over the weekend headlined "US investors drive record number of UK care home deals". Apparently "a record number of UK care homes changed hands last year with investors, especially those from the United States, keen on one of the few parts of the property market where rents still look likely to increase".

Meanwhile the UK market continues to thrash Care REIT's share price (presumably until some US investor comes along to make an offer below its real value). Come on UK! Wake up and smell the coffee!

I think you'll find that this is primarily due to PHX being required to mark-to-market its gilts holdings and gilt prices having been falling as base rates have been rising in recent years (gilt prices have an inverse relationship to base rate movements all other factros being equal). Unfortunately, even though base rates are off their previous peak, they are now also being affected by other economic factors e.g. the size of the UK's national debt means that investors now require a higher "risk" return than they did pre-Covid.

Personally, I think this gives the wrong impression. Firstly, the gilts aren't being held on PHX's investment account; the gilts generate the income to pay customers' pensions and asset price movements are largely irrelevant (the income that the gilts generates is either fixed or index-linked over the customer's life time and is not affected by intervening price movements). Secondly, PHX tends to hold such gilts to maturity, so intervening losses an/or profits arising on mark-to-market valuations generally bever crystallise.

I'm not a fan of alternative measurements usually but IFRS is not, IMHO, a suitable accounting standard for insurance businesses because, all other factors being equal, they're not (in normal circumstances) on the hook to make good any of these temporary book losses. I struggle even to make an argument for the mark-to-mark valuation as being reflective of the value that might be realised by PHX if it was forced (for whatever reason) into a fire sale of its gilts (I'd imagine that PHX would be obliged to accept a considerably lower amount if it was to try and sell such a large volume gilts all at once) or the likelihood that the issuer might default at some point in the future (there is an element of "risk" priced in but, by and large, the price is set by the base rate relative to the coupon rate).

QED I don't think the quoted PE, based on the IFRS accounts, is a reliable measure for assessing insurers such as PHX, AV, LGEN etc. and why the insurers place so much store on their solvency ratios, cash generation etc. To add insult to injury, you can't even use the IFRS profits/losses to assess PHX's ability to continue to pay dividends because its distributable profits are determined based on their realised profits/losses and exclude unrealised profits/losses arising from mark-to-market valuations!

NAV is a moving feast. Its calculation includes, amongst other factors, expected long term income projections, inflation etc. and these factors are being periodically updated for near term movements. The near term income and inflation figures have been badly affected in the last couple of years and this has had an inevitable impact on long term projections. However, on balance, I think GSF's estimates have tended to be prudent and reasonable (I think this is born out by the fact that any asset sales have tended to achieve above NAV valuations).

As regards GSF's real etsate. Given the usual locations for such energy banks (tend to be more rural, brown field sites away from city centres), I would hazard that the land itself is not highly valuable, nor is it likely to offer any material alternative development value or to significantly appreciate in value in the longer term. The valuation of GSF's investments (NAV) has more to do with the projected future income they can generate (which would form the basis for any potential purchase offer that might be received in the future) than the land and/or equipment.

Perhaps they should change their name to AIFoams instead; ought to guarantee a 200%+ unplift in the sp ;-)

It seems that making money is a dirty business these days. Far better to have a left-field idea that may never generate any meanginful revenues but sounds brilliant ;-)

I've currently got c35.90pps pencilled in for 2025 based upon a c5% uplift to the dividends paid in 2024 (34.20pps), so that would make c£1,077. Aviva in recent years have tended to pay ahead of my expectations but there is no gurarantee (this has primarily been due to them fixing the dividend pot and conducting share buy backs in the intervening period).

Unfortunately US politics, namely the threat that the potential tax credits due on US projects may not be monetised, are having a direct impact on GSF at present. Can't be ignored I'm afraid.

In principle CRT should see little or no direct impact from NIC increase. It rents properties. It doesn't operate care homes. However, the NIC increase will obviously have a direct impact on care home operators and potentially have an indirect impact on CRT's ability to increase rents in the future.

In recent years care home operators have generally been able to pass on cost increases to residents (care home fees have risen significantly and residents have had few, if any, viable alternatives) but you have to question whether it's sustainable when fees are starting to top £1k+ per week (it varies across the country and in the South East that figure could easily top £2k+ per week).

My understanding is that the IRA allows for the tax credits to be sold for cash to a third party. So, for example, Apple could buy the tax credits (at a discount to their face value) from GSF and offset the tax credits against their current tax bill. So, in principle, there should still be buyers for these tax credits unless Trump makes them non-transferable. In that event, the tax credits may still have some value (GSF could seek to offset them against their future US tax bills) but considerably less and not immediately. Trump would be creating a legal nightmare for the US government (not to mention the US reputational damage it could have).

He's cancelled loans already agreed? The lawyers will be busy, particularly if businesses have already started the projects funded by those loans.

Try learning to read. I wasn't replying to your juvenile post.

I assume I'm the idiot to whom you refer. Please report me by all means. If suggesting that a placing might be the solution to evident cash flow requirements is deramping I'll eat my hat!

F1Driver, Read the RNS. There is no upfront money. Fiinu will receive royalties based on the bank's audited profits from the Plugin Overdraft (one could even interpret the use of the term "audited profits" as suggesting that Fiinu will only receive its royalties once a year in arrears after the bank's accounts have been externally audited; normally you'd expect royalties to be paid periodically through the year based on the profits, without any audit caveat). There is no mention of what the royalty fee will be but royalties tend to be a low-middle single digit percentage of income so it's feasible that the royalty fee might be 10-25% of profits; not to be scoffed at but will in the end be dependent on what profits one (un-named) UK bank can generate from the product (I'd expect profits to be modest in the first 12 months and, hopefully, rising thereafter.

Valuation is meangingless if you don't have the cash in the bank to fund your outgoings. At 30 June, Fiinu had £0.7m in the bank and a £0.6m tax credit outstanding. IMHO Fiinu doesn't have sufficient cash to fund itself to delivery, especially if the royalties aren't immediately forthcoming thereafter.

QED they have a customer who will pay them at some, as yet, undetermined point in the future once the their Pluging Overdraft product goes live.

In the meantime, Fiinu will need cash and a placing could be the cheapest of the viable alternatives available; no interest or repayments required. You appear to assume that the market would react unfavourably to a placing; I disagree (in the short term maybe but not in the mid-long term).

SunkenSailor, I'm not deramping. I'm just stating the obvious to anybody who actually read the RNS. There is no upfont cash and it's pie in the sky to think that Fiinu won't incur additional costs in preparation for the launch of the UK bank's white-label app.

The customer will want the app fully tested before launch. Just imagine the publicty for both the customer and Fiinu should the launch of the new app cause an outage. TSB, Barclays and other major UK banks have all suffered outages following an "upgrade". That is not a desirable outcome for either party, particularly Fiinu.

So, I'm suggesting that Fiinu will need to spend money to ensure a positive outcome and I'm speculating that it will probably spend at least a £1m (that's fairly small beer considering what hinges on this launch). That is in shareholders interests and, looking at the interim balance sheet, I don't think Fiinu has sufficient cash (even if the R&D credit has since been paid). A loan is a possibility but an unsecured loan might be difficult and costly.

When I saw the RNS last week it seemed likely that a placing would logically follow and, to be honest, I was surprised that Fiinu didn't announce one last week (at that point they might even have got away with a placing at, or above, the sp; they are rare but I have seen them and, based on the news, it seemed a possibility). I have no idea whether or not a placing will be announced tomorrow or subsequently but placings can be one of the cheapest sources of capital for growth companies; the investors may not get a dividend but get payback from subsequent sp rises.

I don't think that I'm advocating a particulary large placing at this juncture; the company should have a good idea what it needs to get the white-label app successfully over the line (and also prospectively raise additional capital to fund further deals, not necessarily in the UK, in the meantime). IMHO the last thing Fiinu should be doing now is skimping (it needs a successful launch) but nor does it want to over discount any placing or over dilute the existing sharholders.

I never said that the placing would/should be at a discount; I simply said that a placing was logical and then set out why I thought that a placing to raise the regulatory capital was a "bridge too far" at this juncture and set, IMHO, a more modest, achievable target. I accept that a much larger follow on placing later this year, or early next, could never be guarateed and would, amongst other factors, be reliant on a very significant sp rise in the intervening period (that doesn't preclude the management from looking at other favourable alternatives).

Given that you've taken umbrage with my comments, I can only conclude that you are a short term investor who is not in this for the long haul. That's fair enough but at least be honest.

Sharemans, Sjoblom could avoid dilution by stumping up £20m+ (if the placing was £50+); most director/shareholders tend to invest alongside the new investors plus take up shares in the pulic offering. That said, I'm not sure he has that kind of moolah, so I'd agree that a placing of £50m at this time is highly unlikely.

As to the rest, please do the maths! Do you really think that any large investors are going to stump up (say) a £50m+ loan for free? You may think that Fiinu is a dead cert but there's no such thing in business and any large investor would likely want to charge a punitive interest rate (at least 15% wouldn't surprise me - these sort of rates used to be charged when the base rate was below 1%) plus they'd probably want warrants and the loan to be convertible in the event of non-payment.

The whole point of the plugin overdraft is that it's supposed to be, not only flexible, but also able to offer customers a lower interest rate and if your (mixed) cost of capital is already c10% (assuming £50m investment at 15% and £150m of fixed term desposits at 4%, with £150m being lent out to customers) then your competitive advantage is signficantly eroded from the outset (not to mention the impact on furture profitability and what that might mean for the sp).

The cheapest financing would be a placing with existing shareholders but if they want to raise £50m then the sp would probably need to rise another 8-10x. Now, if you are an existing shareholder, a smaller placing now followed by a larger placing later if the sp plays ball, why would you be complaining? Placings aren't always a bad thing and in fact it's one of the primary reasons (access to fresh capital) why companies choose to list on a stock exchange in the first place; that and the opportunity for founders to cash in part of their original share holdings.

My answer to your question would have to be "No" and "No". I'm not currently invested and am not waiting for a placing before buying in. I'm primarily a dividend investor (ouch) and don't have the spare capital. I do have a couple of growth shares but their performance has been "variable".

If I'm honest, placing or no placing, I think Fiinu's current sp is (perhaps) now in "no man's land"; the sp could continue to rise on all the hype but, if you reduce it to brass tacks, IMHO Fiinu needs more cash if it is to deliver the white-label app and a placing would be preferable to (say) a covertible loan (I've seen more than a few companies and sharholders stung by these in the past). I'm not saying that Fiinu necessarily needs £5-£10m to deliver the UK bank's white-label app but, based on its current valuation, I think it could (quite easily) raise that amount of money now (if it wanted) and, IMHO, Fiinu would be foolhardy not to "max out" now whilst it has the opporunity and the momentum. Raising £5-£10m would give it the working capital to pursue additional white-label deals now whereas raising only (say) £1-£2m would probably only give it sufficient working capital to pursue the current agreement (until it starts to earn royalties).

It's previously been posted on this bb (in the last week) that before lauching it's own branded app Fiinu would need to raise £40m of regulatory capital to get a banking licence . I'm not sure where that £40m figure comes from (it does not appear to be a UK regulatory requirement); IMHO Fiinu could probably get away with half that figure, which in turn would probably then enable it to raise between £100m-£150m in customer deposits (with a view to a solvency ratio of c15%) to lend out. However, it's important to recognise that the regulatory capital couldn't be expended on operating costs and Fiinu would need additional funds to meet its operating costs trhough to breakeven and I think its up front costs, particuarly advertising the app, could be quite significant. QED why I'm suggesting c£50m (including c£20m of regulatory capital) would probably be the minimum placing needed to forge ahead now with both white-label and own branded products. IMHO it would be foolhardy for Fiinu to try and raise (say) £50m via a placing now (the dilution would be too great).

Broom, I think more than a few of us might take issue with Trump being "nobody's fool" but I would agree that he's unlikely to make retrospective changes to the terms of the tax credits.

Ultimately I think Trump will do whatever he considers to be in the US's best interests; he may not want to pay legitimate tax credit claims but if he doesn't it could do serious harm to the US's international credit rating. If the US government is seen to be reneging on its commitments it could not only adversely impact its cost of borrowing but also have ramifications for future overseas investment.

Trump might try to claim that this is a one time only change but once he's crossed the Rubicon who's going to 100% believe him? Nobody 100% believes him now!

IMHO the US has more to lose than gain if he tries to make retrospective changes to the terms of the tax credits and for that reason I don't see him reneging.

Based on its current c£24m market valuation, it seems unlikely that a placing could raise (the supposed) £40m of regulated capital Fiinu would need to get a banking licence and launch its own branded app.

Not only that, assuming that the regulated capital can't be used to pay operating costs, I'd hazard that Fiinu might need to raise an additional (say) £20-40m to cover the costs of delivering white-label products and/or its own branded product plus covering initial operating losses until breakeven. E.g. if it launches its own branded product I'd imagine that the advertising and marketing costs would be quite significant.

Even with some conservative tweaking of the above figures, I'd hazard that Fiinu would probably need to raise at least £50m to be able to simultaneosly deliver both white-label and own branded products and, in all likelihood, would need to seek a large proportion of this funding from new, large investors, which would result in its existing shareholders being very heavily diluted (especially if the placing was further discounted from tonight's closing price).

IMHO any placing should only now be looking to raise c£5m-£10m at most; sufficient to get the UK bank's white-label app successfully launched and to enable Fiinu to continue pursuing other opportunities. Once the white-label app has been successfully launched later this year, Fiinu could then look to return to the market to raise the additional regulatory capital it needs; relying on the sp rising in the meatime to make a second, larger placing more palatable to existing shareholders.