Compact Power Share Discussion Threads

[magic198] 10/3/2004 19:19

Will probably get taken out for someone bigger to exploit the technology.

[katylied] 09/3/2004 16:02

They are buying time, but they have been buying time ever since flotation.
They will get some more cash, but will probably still be loss making.
So, what will they sell next?

[magic198] 09/3/2004 15:49

Only a demo plant, was never going to be the main business, if they cannot sell the technology on then they have no future. Future hinges on strategic partnerships etc.

[katylied] 09/3/2004 10:41

There goes the family silver....

[glenlivet] 08/3/2004 09:04

Kevster
They have a long way to go to make the Avonmouth plant profitable. As I understand it, the upgrade is not to the plant itself.

I believe that they have purchased a stand-alone autoclave (steam sterilisation) system that allows them to divert a proportion of the clincial waste they receive to be processed by this method prior to its disposal to landfill. The reason for doing this is that it's a low cost form of treatment and allows them to be a significant player within the clinical waste market.

I don't believe that the so-called "upgrade" could therefore have any positive impact upon the financial performance of the main pyrolysis plant.

It does, however, beg the question what waste streams is the pyrolysis plant suited for and are they available at the right gate fees. If the plant can't be profitable on clinical waste at a gate fee of £220/t then it would appear that this technology has a very limited application.

GL

[kevster] 06/3/2004 08:59

They may be able to get around 10p per share in a rights issue, depends if many of the original investors want to plough in more money. Perhaps some of their partners may participate? However, if the stock falls again by several pennies the rights issue will start to look even less attractive.

Anyhow, one positive is that the Avonmouth project is expected to be profitable now that they have upgraded the plant. But looking back at the previous interim results they had hoped to announce some new projects last year, which clearly has overrun yet again,

This company at £4m+ is way too expensive in my view, given the lack of cash on the balance sheet, and uncertainty over prospects, even if the company do continue, it appears that it will take a while before they generate any significant revenue,

Kev

[magic198] 05/3/2004 15:12

Looking pretty grim today, fund raising, cheap sale or knackers yard, which is it to be?

[katylied] 05/3/2004 14:51

only 4 weeks to end of year, and the buffers.

[glenlivet] 12/2/2004 13:34

Must be too late for fund-raising on the stock-market. Also I can't imagine the current investors are ready for sinking more in - in fact, the lack of volume suggests the bigger current investors seem to have written this one off.

Negotiating a sale of the company to another (politely known as a reverse takeover) perhaps ?

[katylied] 12/2/2004 10:10

Any signs of life at CPO?

[gran] 13/1/2004 17:35

It looks like some people are buying shares though? A good punt, or a dead duck now?

[katylied] 11/1/2004 18:52

Apparantly, at the current cash burn of £200,000/month, the company will be more or less out of money by the end of the current financial year on 31/03/2004 (....as at 12th December 2003 the company's cash balances stood at £1.3m of which #0.5m is committed for the completion of the sterilisation plant...). A more optimistic view might give them a couple more months, but that is largely irrelevant since no auditor will sign off the full-year accounts as a going concern with the balance sheet in such dire straits.

So they must raise more money. They need at least £2,000,000 (or guarantee of) before April, to be funded for another financial year. They have implied that they intend a share issue to to achieve this. The possibility of pulling some new contracts out of the hat (within the next couple of months) that massively increase turnover prospects, appears at the stage, to be vanishingly small. A possible wild-card might be to sell off a large interest in their tangibles (Avonmouth?), but that would be more or less the first step to liqidation and shareholders would probably prefer to have the cash rather than let the company continue to burn it.

This looks to me like a 1:1 'rights issue' at about 10p/share or maybe an 2:3 'open offer' at maybe 15p/share. Getting either underwritten will likely be a major problem. At the current share price, I can't see how they could raise that much cash through selected placings at any higher price. They would have to give away something like 40% of the company to raise enough cash. Anyone who wanted it that bad, would be better off staying on the sidelines and waiting for the fire-sale.

I reckon a 1:1 rights is their only real option and their chances of getting it away successfully are pretty grim. In fact thay might as well go for 2:1 and try to get £4,000,000 otherwise the same problem could easily occur again next year. Even if they do get a 'rights' away and survive, I would anticipate a massive share overhang for months to come and a share price sub 10p inevitable at some point.

If they are planning a 'rights' shouldn't they have called for an EGM by now? I suppose someone might bid to take them private but I doubt small shareholders will get much out of that. I wonder if management is now trapped in a state of paralysis? They look like they could be well and truely up sh*t-creek without any kind of credible paddle and the terminal rapids are approaching fast.

[gran] 06/1/2004 07:59

When will we know if CPO has managed to secure extra funding required?

[magic198] 23/12/2003 18:19

Agree naughty to release results late on Dec 23rd. Guess I was misled at recent meeting, they did not indicate fund raising so soon, not really surprising. They need a deal or two to come through to turn this one around. Not sure if a new management team will make any difference.

[glenlivet] 23/12/2003 16:50

Interims out at last :

1. The "burying of bad news" looks dreadfully desperate and deceitful but ... hey ho.

2. A going concern ... but only subject to a successful fund-raising in early 2004. Really ! who would pump more money into CPO now with such a record of failures to anticipate the market ? Ignorant optimism exceeding blatantly obvious reality.

3. Biomass as the next business opportunity ? If CPO can't be competitive/viable when being paid to take waste(fuel) then what chance do they have when you have to pay £30-40/te for biomass ? Please give us some credit.

How long before a new management team ?

[magic198] 22/12/2003 10:54

Went on recent visit to CPO with UKSA, said they were in closed period, all they said on interims. Suspect they will not very exciting. They have cut costs to reduce burn rate. They did say most of the projects previously annmounced were still alive and it was more a question of when rather than if. They really need more help from Brown to give market some impetus, but politically sensitive. Clearly hige potential if they can break through, as they seem to have an edge in technology. I got the impression cash would last for another 18 - 24 months, then may need to raise further, possibly by JV's as alternative to Rights Issue. Their income from processing high value waste at Avonmouth is growing but that is really only a demo plant, and only contributes to costs.

[glenlivet] 19/12/2003 14:49

At this stage, CPO have been awarded a contract to undertake a feasibility study - guess £10-20k of fees presumably to evaluate the feasibility of installing their thermal treatment technology on board Navy vessels for treatment of wastes (presumably dumping over the side is prevented by marine environmental legislation).

Significance - not high imo. I would expect that this is just one of several projects for which they are bidding currently; the only significance is that they are being paid for this bid.

Magic/anyone else : any views on where the Interims are ?

[magic198] 19/12/2003 14:34

How significant is today's announcement with QuinetiQ, not sure how to read this?

[glenlivet] 19/12/2003 10:43

Garth,
More to the point, how many peeps will buy without first trying to understand who has driven the price up (Rowan Dartington, the broker) !

The market for this stock is very limited. I suspect the half dozen or so big investors who pumped in their £x00k stakes when CPO floated will have written this bet off; they won't be wasting their time playing the market now when 70p of the original 90p float price has disappeared.
GL

[garth] 19/12/2003 10:26

RNS, price up, how many peeps will buy the stock without first checking the finances?

G.

[pugugly] 19/12/2003 10:11

GlenLivet:- Agreed with everything you say - I stongly suspect that without further environmental legislation Compact Power may be condemned to a slow death.

[glenlivet] 19/12/2003 09:24

16th Dec for Interims been and gone ... trying to finalise a financing deal so that there's good news to kick off the New Year or looking to bury bad news just before the Xmas break ?

PugUgly : Considering Juniper Consulting's reputation is largely founded on their expertise on pyrolysis-gasification technologies and so they might be expected to promote such technologies, their submission is therefore quite damning. Whilst opinions such as Juniper's are publicly pronounced then banks will be wary of lending to projects based on such technologies - banks will only lend if their technical advisors assure them that risk of non-performance is low and debt service will not be threatened.

Conclusion, projects only likely to proceed in the near term if equity funding can be found. Also, further working capital funding is likely to be required to sustain technology suppliers whilst they attempt to get sufficient (and good) operating track record under their belt to satisfy lenders and their advisors.

If such working capital funding cannot be attracted then I guess the technology suppliers have to reduce down to skeleton staffing to minimise burn rate or sell themselves into a larger umbrella organisation. In fact, Compact Power are fairly unique relative to other similar technology suppliers in that their operating costs are fairly high (£3 - 4m pa ?), running a plant at Avonmouth and with probably 15-20 (?) or so staff at Head office.

[pugugly] 16/12/2003 15:57

GlenLivet:- Thanks very much. Most useful report - In particular page 11 of the Juniper appendix where the various disposal options and companies involved are summarised. I think that the overall impression I get from this appendix that Compact Power faces a very tough future (as do all alternative new technologies) and unless new contracts are finalised shortly futher funding may be needed at best - there is also by implication (imo) a possible/probable worse outcome. Do you agree?

[magic198] 15/12/2003 16:55

Yes, due 16th, may be interesting, another tick up today