Member Info for vigneron53

Macro economic turbulence is impacting the UK markets and AIM in particular.

There have been enormous outflows in uk equity managers in the UK (£7bn since Jan 23 ). This means most do not have sufficient assets in their funds to buy more stock.

This is going to get more volatile leading up to the US election next year.

Seems to me that private and institutional Investors see risks in equities that is hampering long term investment.

The AIM market in particular has taken a hammering, not surprisingly as generally those companies come with significant risk. This is for sure a drag on SRC.

I can't see anything changing until after the US election and even that may not be a positive outcome.

It's the worst climate I can remember for investing for many years.

Preserving capital is always high on my agenda, but more so than ever now.

I noticed the shout out to Elon on possibly bringing X back to the market via Pershing SPARC.

I think Bill Ackman and Elon are on friendly terms.

Like you say, a lot going on, but apparently little interest.

Just replied to your mail. Letting you know incase it is in the spam folder.

My thoughts on the call.

Baines looked very uncomfortable in the call. It seems pressure has been put on him to assume the CEO position, until the company has executed it's strategy. That could be 2- 3 years.

There was admission that the enzyme expansion program did not go well. It has cost the company extra capex and project costs. I think it is over budget by circa 7m on a 9m forecast.

Baines didn't agree with the observation that this was not a highly complex project. On reflection I can understand why, as for a small company like EKF, this is probably complex relative to what they have done before.

A strange comment was made "perhaps we should have had another PM". Well not really imo, a PM with experience would have been better.

It seems the delay is down to planning to commission the new equipment and bring on stream each independently.

It is now discovered that all new equipment has to be commissioned and brought on stream together. That's a project planning error.

Also it seems the target market is now pharma focus and not pharma plus food etc. Again in a program like this, you would expect all this to be in the project charter and signed off. Not sure whether this was a recent change or not clearly defined up front.

I hope to hey got the message over the concerns over project execution. It appears we will know in about 6 weeks.

They have gone extremely pessimistic on the forecasts, clearly because of the delays they had to declare. That's just about acceptable for 2023, but 2024 is far to cautious.

Cash looks ok, but really depends on them hitting targets, cutting costs and what planned dividends they award.

The FD is a former colleague of Baines from a previous company, both live in the Cardiff area, where EKF have their HQ.

Good to see the usual suspects in the discussion and the newcomers with the identical consensus, almost as if they had cribbed the post.

Only just read the announcements today.

On the CFO, I am glad we finally have someone on board, but less than enthusiastic about the appointee. I could say more but I wont.

As for the progress on the enzyme business, the current situation, with another delay was entirely predictable based on the previous updates. It spells out a company that don't have any capability to manage programs.

To quote from the update:

"The process of validation and verification had not been sufficiently factored into current timescales for installed equipment to become fully operational"

That indicates a clear failure in managing this program of work, to commission new equipment and develop processes that underpin the winning of new enzyme sales.

Whilst Baines stays on as exec Chair, he is not going to solve this.

Managing change is not easy, although this expansion of the enzyme business is low on the complexity scale. It just appears that they just don't have the capability.

Unless they fix this, they will continue to incur time and costs penalties.

I am still invested, but hanging on by a thread.

I contacted Max, yesterday following up on the share price discussion we had back in March.

I got a lengthy reply, which I don't want to share on here, but happy to share by email.

He has offered a telephone call to discuss, so maybe a small number of us could organise a Telco with him to discuss our key concerns.

Big.

Yes unfortunately with Black Rock as a large investor there may well be some games being played.

I thought it came across as an embarrassed and incoherent response from the bod at the meeting, which adds weight to your point.

The question on company valuation was just skimmed over in the investor call. In fact the comments were pretty pathetic in their lack of anything concrete. ( no pun intended)

Looks like another mail to the company required.

Several KPIs highlighting comparison with Breedon.

They were all positive for SRC.

It's an open question on why the market apparently are discounting this.

Let's see what they say on the call currently in progress.

Ash worth Lord each many our sentiments.

They have to face investors on a call in September and it could be a feisty one.

I see the same warning signals. Instead of Q4 revenue from life sciences we are now warmed up for 2024.

The reason being both dependant on contracts and capacity being in place contrary to previous guidance.

And the departure of the key person who going to deliver this didn't warrant an RNS.

As for governance clearly news has leaked (not for the first time) that this was coming.

I like the idea that heads should roll, but ironically we don't have many left on the bod.

Broker update was positive as would be expected with another set of results that overachieved.

On the share price, there is a feeling the market over estimates the costs and doesn't appreciate the capex flexibility.

The view is that a rerate will come as the track record of good results is extended. A continuation of Max's investor presentations should help.

In a pretty awful market, I am thankful for the stability of this investment in my portfolio.

That was a response to my question.

I replied and pointed out that this was price sensitive information, so I disagree with their logic.

I also pointed out the decline in shareholder value over the last year even though the board who have not covered themselves in glory received fat bonuses.

No reply as expected.

Please indulge me with a short diversion into global politics.

A couple of weeks ago news was coming out of US that the Neocons who encouraged the Ukraine war, were becoming nervous. It was going at all to plan and Russia was still in a strong position.

The had discussions direct with Russian diplomats to see if a mutual settlement was possible. It transpires UKR membership of NATO was a red line as it always was.

The neocons put out a message that UKR should not be given membership.

The subsequent NATO conference confirmed no membership until after conflict ended.

This week Biden admin putting out mixed messages, but one that encourages settlement.

What's this got to do with SRC ? The prospect of a settlement appears to have a positive impact on SRC share price.

And why wouldn't it with BlackRock as a large shareholder and having a contract to rebuild Ukraine. I don't necessarily agree with the ethics here, but that's how it works these days.

That's just my opinion.

Thank you for your support of EKF as a shareholder.

The Board judged that it was not necessary or appropriate to announce Mike’s departure via RNS given that he was no longer a director, and that we have continuing access to his knowledge and expertise through a consultancy agreement.

Instead they intend to note Mike’s departure as part of our next significant announcement. Their judgement on this will have been backed by appropriate professional advice.

I am sorry that you feel the Board’s judgement in this matter is not correct.

Thank you again for your support of EKF.

I will be watching very carefully.

I suspect the technology will be sold to someone in the industry very cheaply.

The must think we're fools.

Yes, sounds like he has a grudge if he has posted prior to the official announcement.

It's a case of watch this space.!

I can see no announcements on this ?

New US website

ekfusa.com

The purchase of own shares continues. As it progresses not only does it reduce shares in issue, it also increases the percentage of shares held by affiliates.

They are heading for a situation, where they are in control of the company and future direction, such as alternative or additional listing.