Member Info for Xenor

Is there a summary of this presentation? I am unable to watch as I am on holiday with limited data. I bought in here a week ago at just under 16p and it's starting to feel like yet another investment mistake.

Last year they did a business update in August, they don't have to wait for the interims to be posted. They also don't have to wait until the last day of September to post the interims as that would send another bad message to the market. One of my other AIM shares released the interims already on Thursday. Share price dropped but it's nice to see them getting them out quickly. I still expect our H1 to be good so there's no reason to wait for them.

If all JW can do on the 25th is a rehash of the presentation from late April then we're all going to be very disappointed - even though that was a pretty solid presentation at the time. We need cold hard facts on figures for H1, how we're going to meet the guidance and where the 2024 revenue is coming from. JW needs to reassure the market that his plan is on track and that the debt is manageable. If he can do that then sentiment will change again for the positive.

I also think we've had a bit of bad luck with timescales for new contract awards, likely slipping beyond when JW expected announcements by. No doubt they will be like buses when they do start arriving.

Of course there will be an RNS prior. How else will they give a detailed business update? I would expect it to be market sensitive and require an RNS prior to the interview and AGM. Not necessarily the same day but we should get one.

It's not even today's RNS that has annoyed me here. The company announced start of gas production 8 days ago and it has been plummeting ever since. AIM is just sell on news, good or bad. Only difference is bad drops further.

I bought some of this a few weeks ago around 7.7p thinking it was a decent AIM stock to own because it's cheap and has revenues with new gas project ready. Turns out it is no different to the rest. I'm 25% down already. Getting out when I break even and not putting a single penny more into AIM again. I'd do better at the casino.

We are meant to have some wind demonstration projects ready for 2024 that form a large chunk of our 2024 revenue. I would like to know more about this and when we expect to see the contract awards. Hopefully it is mentioned in the interview.

It depends what ypu define as substance. For me the most important update we can get right now is how H1 went. Given the LinkedIn comment and other signs I suspect very well.

ForrestGump, nonsense.

In July we will be getting a detailed business update via the LSE interview and AGM. We also may see contract wins as we know the Scilly contract is being decided this month. No guarantee we'll get that but I fancy our chances.

Shorts are down to 6% on IG, probably explains why certain cretins have gone quiet.

I can't believe I'm saying this but I agree with you completely.

I think the initial RNS a couple of weeks ago was forced. People kept emailing the company asking where the results were and spreading rumours that they would miss the deadline and the share would be suspended. Anything to suit a trade I guess.

I really don't think things are as bad as people are making out. We all expected a huge loss and debt to rocket post December 30th RNS and yet people have reacted like it is a surprise and like the company will go under because of it. There wasn't anywhere near this reaction to the initial confirmation of a terrible 2022 at the back end of last year. Yes the share price plummeted on opening the next trading day but it quickly recovered.

People need to stay calm but at the same time we need to be asking tough questions to the BOD and JW in particular at the upcoming sessions.

I still believe 2023 has gone well so far or we would have ran out of cash by now, and JW has said cash flow is fine right now. Sentiment will return here in time and when this eventually gets profitable I expect it to go from loss making to big profits quite quickly as our books are dealing in the 10s of millions and eventually 100s. 2025 will likely see a profit higher than our current market cap. Before 2025, I have low expectations. Anyone hoping to get rich quick then this isn't the share. But medium to longterm (2025 onwards) I still believe in the story.

Lots of people sold to take us down to 9p and they will all have one thing in common. They will want the cheapest possible re-entry price. So expect lots of FUD on here until positive news arrives. I suspect the bottom will be in soon if not already today, and people will want back in before the AGM, LSE webinar and possible Scilly contract award. Even the shorters and traders will soon realise there is more upside potential here than downside after a 50% drop in two months.

Certainly JW has a lot to prove and it is essential that the 2023 target is hit and 2024 target maintained.

Is this one of the large contracts we expect to win in the short term? (JW's words in the financial report)

This is madness. Almost like no one expected a big loss for 2022 after reading the RNS at the end of last year.

It could be that the H1 update we all are asking for isn't quite ready and this is an early update to try calm the nerves of shareholders. I welcome it.

JW should commit to quarterly updates like a lot of AIM companies do. That way we will know when to expect an update. We've had a lot of good social media posts and a brilliant interview with LSE but nothing substantial in an RNS since March 1st.

Going back on my word of not posting on here whilst I'm on holiday as this important matter popped up and I've had to dig into it.

I don't actually know what to make of it. JW said in the results that current cash flow is ok so we don't need to rush finance, and has said no placing in interviews recently. And then this.

I have said it before and I will reiterate that I will lose all respect for JW if he does a placing at this level. Not that he cares about my respect, but it would be the final straw for me here. I have no issues with an equity raise further down the line to pay off a chunk of debt - at a sensible level above 100m market cap. But down here would be disastrous for shareholders.

One could say an equity raise down here is already priced in given the plummeting share price over the past couple of months and especially the past week.

The silence from the BOD on just about everything other than the finances is making me unhappy. We know current cash flow is ok as JW said as much in the report, and we are apparently still on track to treble our revenues this year, and yet the BOD have nothing to update us on.

These are my thoughts anyway. I am taking a break from these boards for a bit because I am now in the USA on holiday and won't have the time. I wrote this on the plane. Make of it what you will. I'm not debating this. You either belive in JW's master plan or you don't. I do. I think the company has a bright future. Once certain people get their target entry prices they will go quiet. With the poor news out of the way the trolls will revert to the old "placing coming" remarks. Good luck!

So we know that current cash flows are fine. Revenue is covering costs. Hence taking their time with finance, an approach I support because getting a better deal is the important point here. The debt package is 200m, backed 80% by UKEF and the other 20% will be covered by some of our assets. Assets including IM which is worth high double digit millions and shipyards with 77m of investment from the FSS contract. This strategy has been backed by Grant Thornton.

We have a lot of debt... Yes. This is how companies grow and scale up quickly. Once we hit that 500m revenue target JW keeps mentioning then servicing that debt will not be a problem. This is why it is a 5 year deal. The lenders understand the plan. Yes there may be some equity involved in the future, I wouldn't rule out shareholders having to pay down some of that debt in the future. But it makes far more sense to do that placing when the market cap is above 100m than down here where anything other than wiping out existing shareholders would not be worth the effort.

Given that current cashflow is meeting needs, a new debt package is a couple of months away and JW's comments on placings in recent interviews it seems extremely unlikely that there is any need to take 20-30% at this market cap. The money generated would be insignificant. Let's remember that the BOD also own a lot of shares here as well, and have bonuses related to achieving a higher share price. It makes no sense, but people who want to see the company fail will say otherwise.

2023 is clearly going well so far if current cashflows are meeting needs and covering costs. Ideally, we would get a report for H1 sooner rather than later, even if the numbers are unofficial. That will put people at ease.

Upcoming Contracts

Nestled in the report are these snippets of information:

"We are seeing significant traction in contract fruition going into Q3’23 and beyond, giving us confidence of achieving further growth as I have outlined in March of this year."

"We expect to keep building this core base of skilled personnel in 2023 whilst we prepare for the FSS programme and other large contracts that we expect to win in the short term."

"expect to win in the short term"

This is a bold statement to be making. JW must be confident about certain bids, and I suspect they are quite far advanced to be making that comment. He alluded to multiple large contracts in H1 back in November, but timescales do shift. With everyone now focused on the JR result and finance which are likely to be September, we will likely see contracts coming to fruition between now and then that catch the market out.

Some people are having fun highlighting big numbers, so I thought I'd give my understanding of them.

Revenue: 28m | Operating Loss for: 58m (Total 70m)

Debt: 82m

Here's how the business works. We sign a contract for example the M55 one for 55m. We have a profit margin on that contract, let's assume 20% here to make it simple. That means it costs us 44m to make 55m with 11m of that profit. What this means is a 44m hit to the balance sheet over the life of that contract, but the revenues from the contract will more than make up for it. This is true for all of our contracts.

What happened in 2022 was outlined on December 30th in the RNS that stated there had been delays to several contracts. What that meant is we spent money servicing these contracts but the revenues had no arrived during that reporting period. These were said to arrive in H1 2023. There was around 35m of missing revenue due to these issues. Had they been on time, that would have made a substantial difference to the figures in the report. They would have looked like:

Revenue: 63m | Operating Loss: 23m (Total 35m)

Debt: 82m

Still a big loss there but as a proportion of revenue it is far less. This is the issue with a set reporting period January to December. Had we reported April to March I suspect the finances would have looked far different.

Now on to 2023:

2023 should be more balanced. Assuming we hit the target revenue of 100-115m then our losses will be far less because the revenue is coming in to offset the costs. It is easy to spout big numbers, but this is a business aiming to hit 500m revenue in 2026. To make that 500m our costs will increase to around 400m and we will have around 100m profit assuming a 20% margin (which is less margin than the company is aiming for).

People concerned about cash burn in 2023 should understand that yes we may well be spending well over 1m per week (sounds scary on its own right? That's the idea behind the deramp there), but we also stand to bring in 2m per week average revenue if the 100-115m target is hit. We will more than treble our revenues in 2023, which is quite an achievement for any company. The market understandably may have to see it to believe it after 2022

JW has stated in the report:

"We are now at an advanced stage in our negotiations with UKEF and our lending consortium. This is a five-year deal and it is important that we get the economics right. Our current cashflows allow us to take the time and get the best possible deal for the Company and its shareholders. We will be making announcements on this deal as it matures and comes to fruition."

So we know that current cash flows are fine. Revenue is covering costs. Hence taking their time with finance, an approach I support because getting a better deal is the important point here. The debt package is 200m, backed 80% by UKEF and the other 20% will be covered by some of our assets. Assets including IM which is worth high double digit mi

"We are now at an advanced stage in our negotiations with UKEF and our lending consortium and expect the refinancing to be completed in early autumn 2023. This is a five-year deal and it is important that we get the economics right. Our current cashflows allow us to take the time and get the best possible deal for the Company and its shareholders"

Not worried at all about company finances. Companies take on debt all the time to grow. It's only a problem for those who want to see the company crash and burn to help their trade.

That said, we will have to pay this debt down eventually. JW is probably going to do a placing eventually at a much higher share price after we're turning a profit. Not something to be concerned about now.

Share price is on it's rear end right now, this negativity is already in the share price. Time to look forward to the large contracts that we expect to win in the short term - that was mentioned in the report.

Monday I'm expecting a few panic sells on opening and then the vultures who sold in May/June and are busy deramping everywhere to swoop in and take their shares. Job done.