Member Info for TheTrotsky

Although last week's order announcement was significant (and unexpected), we still have had no update on DVRG's cash position at year end or any update on either MW's or STC/Labskins's order book. Also, as you will no doubt be aware from the many posts on this board, there is still much concern that DVRG is simply burning cash; I don't believe that is the case but, just like the doomsters, I have no evidence to back that up.

Furthermore, we have absolutely no guidance on Glanaco's operating margins. For example, high value, low margin sales shouldn't (necessarily) be shunned but, if they only serve to tie up even more cash in inventory and/or trade debtors, that doesn't necessarily help DVRG's current cashflow issues. It would be good to think that Glanaco can add material sales but only if the operating margins are right and don't tie up even more cash in working capital (ideally we'd want to be paid cash on delivery or shortly thereafter).

Have to admit that I'm still trying to digest the recent Glanaco order announcement. When DVRG bought Glanaco it seemed like a small acquistion with the stated intent of bringing MW's European fabrication services in-house. All well and good.

But now Glanaco has announced a €10m contract (seemingly out of left field). Obviously we have no detail on margins but it would seem that Glanaco is, at least, capable of adding material income to DVRG's business (not something many, if any, of us ever envisaged). It's tantalising.

Bottom line, we really do need more detailed information about FY22 sooner rather than later (we should not be left to wait for final results to be released in June, like normal) and an update on prospects for FY23. There are many aspects of the business that the BoD urgently needs to get to grips with since GB's departure (some of which will take longer than others) but improving the company's reporting to shareholders realy isn't rocket science (it just takes the will to make it happen; after all much of the key information pertaining to FY22, and also internal FY23 forecasts, should have been available to the BoD by the end of January, if not before).

There are quite a lot of buys but they are, for the most part, small beer and although there are some larger buys they are interspersed with some equally large sells. I think we need a bit more of a shove (news wise) to regain upwards impetus. The share price may drift upwards a bit from here (the offer price does seem to be on the cusp of rising to 1.8p) but I don't think we'll be re-testing 2p until we have some clearer KPIs.

I see Tile Giant has entered a pre-pack administration. It caught my eye because it was recently bought by Matt Williams. The Times article was at pains to point out that he was the former CEO of Topps. He left over 3 years ago!

BillBursio, If you look at PAY's recent RNS you will see that it's about facilitating transactions. PAY describes itself as channel agnostic and aims to provide a range of digital solutions to support clients across multiple sectors, including government, local authorities and housing associations (their words not mine). They've also struck up working relationships with banks, such as Funding Circle, to provide loans at the point of sale (for which commission is earned). Their PayPoint One terminals aren't simply cash registers.

You are right to question why you'd need PayPoint because you are privileged to have a bank account (a lot of people on low pay are denied access to anything other than a basic bank account - they are not considered credit worthy). You (and I) would never consider taking out a loan in a convenience store, need to exchange government vouchers or use pre-payment meters, yet a large proportion of the population do because they are denied access to the other options that you take for granted simply because they are low paid and their income is often irregular (to suggest that they are not sound clientele smacks of elitism and somenbody who is detached from, and has no understanding of, reality; bit like Marie Antoinette).

I'm not saying that PAY soley provides a service to the poor but a lot of the transactions they facilitate are for the less well off and it is a (very) large market. Margins are small but volumes are large. Also, think about the sites that use the PayPoint One terminal; they don't want people to simply walk in, cash their vouchers and walk out again. PAY, is providing these sites with the opportunities to generate additional incremental income, which not only benefits both the sites and PAY but also helps tie-in the sites to PAY.

I suggest that you don't invest in PAY because you clearly have absolutely no understanding of the real world is like for tens of millions of Brits (it's not out of choice that they find themselves in this predicament; choices simply don't exist).

Blending hydrogen with natural gas is certainly feasible and all new Bosch boilers are, for example, designed to be able to run on a 20% hydrogen blend. However, the prospect of using the existing gas network to transport 100% hyrdogen is, I think, a pipe dream.

Hydrogen has about 2.5x the energy density of natural gas BUT because hydrogen is about 8x lighter than natural gas you need approximately 3x the volume of natural gas to generate the equivalent amount of energy i.e. you'd have to deliver the hydrogen at about 3x the pressure (to condense the gas) to be able to generate the equivalent amount of energy. You could alternatively reduce the temperature of the hydrogen but that would probably be impractical for transit through unlagged gas pipes.

So, not only are you delivering a far more flammable fuel you are also probably going to need to deliver it at a much higher pressure, which not all existing gas pipes are rated to withstand (you have to think about all the pipework, including pipes in the houses).

Bottom line it would probably need a largescale upgrade of existing gas pipes and, even then, you have to wonder whether the increased risk of catestrophic explosion posed by hydrogen gas could ever warrant 100% hydrogen for domestic use. On the other hand, large scale industrial use where the hydrogen can be delivered and stored in liquefied form would seem far more practical. Storage of hydrogen has always been a problem because its molecules are so small (all existing storage is more or less porous to hydrogen; it leaks) but there have been some exciting recent developments in the graphene field that might make hydorgen leaks a thing of the past.

PAY is a fundamentally different business from pre-Covid. Because of structural changes in its legacy markets (the loss of its British Gas contract in 2020, and declining ATM use and bill payment transactions), in 2021 PAY decided to sell its Romanian business and move into digital paymenst/transactions. Yes, the dividend was cut but has since started to increase again and the current market expectation is that it will pay a dividend of c40p for FY23 (FY22: 35p) although I think that it's more likely to be c38p unless it cust its dividend cover from c1.5 to c1.4 (still within its target range of 1.2 to 1.5).

PAY isn't a business in decline. PAY is a business in transition (moving from declining cash-based to increasing digital-based transactions) and I think the market is yet to wake up and realise that. Also, the acquistion of Appreciate Group opens up a lot more opportunities to cross-sell (PAY is anticipating Appreciate customers coming in-store to top up their Xmas savings and/or buy gift vouchers, which should be beneficial both for PAY and terminal customers, reduce churn and help acquire new terminal customers).

Where I own shares (ISAs), I don't have any available funds.

Where I have (potentially) available funds (SIPP/trading account), I don't own any shares!

Story of my life ;-)

I suggest you actually read the FY22 preliminary results because you appear to fundamentally misunderstand the business and its dividend policy.

Cash transactions and top ups are no longer not the core part of the business. It doesn't matter whether the customer uses cash, card or mobile phone (channel-agnostic), the PAY terminals handle all these transactions and a lot more besides; and PAY takes a cut of each and every transaction processed. PAY's target clientele are the c60% of Britons who earn less than £30k pa who are often reliant on government, local authorities and/or housing associations for benefits, accommodation etc. These are often the core customers of corner shops and the whole point is to make it easier for these customers to be able to exchange their vouchers, access their funds/benefits etc. and (ideally) spend in shop (to the benefit of all). These are also the same clientele who are most likely to join Xmas savings clubs and use discount shopping vouchers, and PAY sees yet another opportunity to cross-sell (to the benefit of both PAY and the corner shops).

Essentially PAY is creating new and expanding incremental sources of income for their terminal customers; which helps tie in terminal customers and drive revenue.

Don't necessarily disagree but the sells don't generally appear to be spread bet closers (not round thousands of shares). I closed my spreadbet at a small profit at midday on Wednesday (could already see the writing on the wall) and the share price has been creeping down ever since. I'm still none the wiser as to who the seller is (the big sales don't look like spread bets); if I was selling and trying to maximise my returns (minimise my book loss) I would sell into rises but I wouldn't keep on selling when the price started to drop. The selling has been going on for months, with no real let up.

We really need more cohesive information from the BoD now (rather than the scraps that we've been fed uptil now). GB was bad at keeping the market updated, in a timely manner, with the KPIs and the current BoD are now beginning to look like just as inept. We need quarterly trading updates (revenues split between Glanaco, MW and STC, orders, EBITDA and cash at a minimum) and if this BoD can't manage (even) that then maybe a few more heads should start to roll; it's really not rocket science.

Okay, GB wasn't good at setting future sales forecasts (sometimes I just think he stuck his finger in the air and spouted the first number that came to mind) but at least we had a baseline target. The BoD has made no real utterances about current year prospects, other than some vague utterances about significant contracts (much of which could easily be accounted for just by the Glanaco contract). It's this uncertainty that's now undermining the share prcie.

Seller(s) still lurking. It looks as if the 1.7p bid price is about to break. We need more financial information if we are going to force out the seller(s).

SOS's ability to raise bank debt is very limited because it has little, or no, tangible assets on which loans can be secured (it's the downside of being an on-line retailer) and the cost unsecured loans would likely be prohibitive. Therefore SOS is forced to have to go back to the market if it wants to raise additional funds until such time that it starts generating cash surplus to working capital requirements (at the moment it needs to reinvest its cash into acquiring new customers and inventory)

When are people going to realise that OXB is not just another Covid vaccine stock? Yes, OXB made money during Covid using its manufacturing facilities but OXB is not simply about Covid vaccines. OXB manufactures "drug delivery systems" and was simply in the right place, at the right time, to take advantage of the need for Covid vaccines but its manufacturing facilities were not built for Covid and there's a lot more to potentially come.

ii is owned by abrdn. Does that help?

... well that was the theory. In reality the MMs are twisting the knife.

MRX is still reducing the offer price and there are still some chunky sells; I think it could be going lower again. I decided to close by spread bet (nothing showing in the buys/sells) at a (very) small profit and stick with my shares (did a small top up yesterday) for now.

Can't for the life of me work out who is selling.

The one large seller theory seems impractical (they'd either have had more than 3% to start and would have been obliged to make disclosures or would have run out of shares to sell by now). Nor can I imagine that (multiple) individual PIs would have ever have acquired several hundred thousands of shares before the placing. From an investment perspective, I can't see any advantage for one, or more, of the investors who bought shares in the placing to wanting to sell at a loss (they'd probably need c2.1pps minimum to cover their outlay and costs). There might be a commercial angle (trying to keep the share price depressed to enable DVRG to be bought "on the cheap") but that could backfire.

Shorting is a possibility but without any disclosed shorts it would seem unlikely that one individual would have built up such a large position especially given that the downside risks (share price rising) would seem to outweigh the upside risks (share price crashing). I know that there are a lot of doubters currently but DVRG is not an insubstantial business and if they can manage their cash better (balancing revenue growth against cashflow) then they have a very promising product portfolio.

In theory the price should open at c25.95p, allowing for the existing 221m existing shares and current market value of £58m, and the proposed placing of an additional 18m at 22p (about £4m) but I guess, as is normal, a number of participants in the fundraising might look to sell existing shares and this will drag the price down further.

One can only hope that the additional cash will enable them to accelerate revenues via additional inventory and customer acquisition to offset the near term detrimental impact on the share price.

The timing and price would suggest that it was a sell and explain why the Offer price sat at 1.9p-1.95p for most of the rest of the day (the MM was trying to offload the shares at below 1.975p).

I knew I shouldn't have bought yesterday! The price always falls after I buy, couldn't make it up ;-)