Rm2 Share Discussion Threads

[lentjes] 17/3/2016 08:17

Would have been nice to have some numbers and who the selected vendors are but its a step in the right direction

[masurenguy] 01/3/2016 09:41

A very interesting link Pugugly. However, RM2 have some interesting Executives and investors (like Woodford) who must be aware of this history and yet still see some credible potential, otherwise why would they get involved. However, potential is one thing and realization is another. It is the latter which constitutes the major risk factor allied to the amount of investment that may have to be made in order to ramp up production and obtain a growing market share.

I'm happy to watch from the sidelines until some catalyst indicates a genuine breakthrough with both their product and logistics. If this subsequently happens then I reckon that there will still be some time to jump aboard in order to get a decent return here.

[pugugly] 29/2/2016 14:49

Masurenguy:> Long time no talk - Interesting that you are watching this one. Agreed not very friendly to major potential investors as well - I got out with my shirt luckily mostly intact.

Since then I have been doing sporadic DD but have not found a compelling reason to invest here.

Recently found an American site which you may find interesting on the major players in the pallet market and ways in which they appear to have blocked and or disrupted new entrants (I cannot verify the facts in the link so DYOR) as usual but I would be interested in your feedback if you have time.

[masurenguy] 29/2/2016 14:11

There has been no news here since the September interims other than Woodford has slightly upped his stake from 27.0% to 28.1% since then. There was no post year end trading update last year and the results were published in June. Therefore unless there is some meaningful contract news, or some other significant development in the meantime, it would appear that it could be another 3 or 4 months before there is any further information issued.

Not a very PI investor friendly attitude with no updates now for 5 months, especially following some of the product problems that have surfaced during the course of last year. This has been on my watchlist for sometime as having a potential disruptive impact in this sector but there are major still questions relating to both the credibility of the product and the management that first need to be overcome before I might be tempted to invest here.

[pugugly] 29/2/2016 11:59

Nothing yet in the way of news - seem to be keeping a low profile and avoiding contact with the press/city. Not sure how to read - on balance possibly negative.

Next certainly would be the preliminaries - if follow lst year's timetable in May but would have hoped for a trading update before the publication of the accounts as account year (unless I have missed a change of accounting date) ended 31st December 2015.

Could it be that they are waiting (in hope) for new contracts to be agreed before issuing a trading update ?

[lentjes] 19/2/2016 18:18

Late flurry of share action. Could we have the long awaited update next week

[lentjes] 02/2/2016 16:04

I think the increased interest on this board and LSE and the share price recent dealings is a sign that the share price has slipped as far as RM2 or its big II's will allow before intervening or it has reached the pre agreed level.

The information related to contracts and the business model discussed on this board and over at LSE is far more than RM2 have announced in 2 years or is available to the market other than the big II' so whilst not exactly issuing RNS as maybe there not in the final position to do so I'm almost certain that some of the info is being drip fed from reliable sources within either RM2 or the II's to support the share price

We may even finish blue today

[pugugly] 29/1/2016 08:29

Lorentz7: Thanks - I cannot improve on Lentjes comments - All now down to cash flow and financing + of course product quality of the new improved pallets and level of next funding - If they do an ITM still quite a lot further to fall. (NB ITM just announced an open offer at 15p having initially floated at 50p many years ago)

[lentjes] 28/1/2016 22:04

Lorentz7

I thought I was a RM2 pallet freak but you have just smashed it !

On a serious note congratulations on your research and the best post on this board to date.

I think the share price games being played over the last weeks are nearing an end and as you say the next placing is not far away and therefore the II's are getting their share price price as the buy in conditions. The plus point in relation to the cash burn if confirmed would give a good indication the production rates have increased and the pallet pool is increasing.

PS I still have a dream that one day I will be sat in a traffic jam on the M25 and look to my left and see a wagon full on those yellow blocks on the RM2 blockpals lol

[lorentz7] 28/1/2016 19:21

So I'm quite happy that they have a good product (much more to say, but it was already an essay). My main concern for now is that they get the funding they need. The plan is to securitize the pallet pool, in other words (as I understand it) the lenders get the rights to some of the cashflow from the assets (pallets) that are collateral on which the loan is secured for a certain term, so repayments are more secure than simply having the pallets as collateral. These loans are then packaged and sold to investors. Sounds a lot like the infamous asset backed securites on home loans, but anyway, I read it's an increasingly popular way of raising money.

John Walsh worked in capital markets for many years, so he'll have a better idea than most what's possible. The RNS language was somewhat cautious on that means of fundraising, so clearly not a home run at that point, and obviously impossible til they have sufficient pallet pool size. I would hope he and all the ex-investment bankers on the team have had discussions with potential funders on what is possible with whatever sized pool and so on, and putting another £2.3m into this in the placing with Ian Molson suggests some confidence. I'd hope Woodfood wouldn't just take their word for it either without some checks. Pure speculation, but it may be that they need another small placing to build a big enough pool to get decent terms (I hope not given the current sp!). For one thing they'll want a certain advance rate (loan to collateral on which it's secured) and enough revenues coming in to make their current growth plan viable.

Given the size of the pallet pool matters in this way (my guesstimate is about half a million at end of last year), maybe it's not surprising they haven't (I assume) yet sealed the funding as the bigger the pool the better, though I hope they have done all the preparations for the arrangement by now. Perhaps they could suppliment the pool with PPE as collateral if needed. They had $36m cash end of June, $20m end of August, suggesting $8m cashburn per month (and the same earlier in the year, which started with $83m). With another (guess) $8m cashburn in September, they'd have around $58m start of October. They have been increasing production and workforce (to an extent you can tell from online research too), so I guess they'll have in the low $20 millions currently. So hopefully not too many more weeks before some news on funding. Perhaps worth mentioning that I know from something online what production was in November, and I've read something (the Toronto guy - maybe not reliable on that as the number not plausible I think) suggesting that the ramp up is very much underway since then, which to be honest is the best thing they could do. They'd burn through the cash faster, but absorb the monthly overheads in more pallets, get more revenues coming in sooner and have more pallets to secure the debt funding at the same point in their cashburn, though if that's the case they need to get the funding settled even more imminently if they haven't already. I suppose they could tide themselves over by selling instead of leasing pallets for a while if needed e.g. those due to PPG.

I'm not too concerned that quantity of orders would be a problem, despite announced orders where they've given numbers not adding up to all that much, most numbers not provided. You can find with DYOR online a few more of their customers/extremely large retailers recently announced as accepting the pallets from their vendors who are rm2 customers. More importantly the expensive move to a bigger, high capacity facility and many other things they are doing suggest to me that they have the demand, as well as the expectation of at least 2.5m produced this year. Can't exactly hold them to an "expectation", though it's the first RNS that's had a forward production number so far, so not totally insignificant.

[pugugly] 28/1/2016 08:13

Lentjes:- Very fair comment - What we also need is an indication of "leakage" of RM2 pallets from the system given their much higher initial costs and business model.

One point I had not heard of before was that the fibreglass was shedding splinters but wood does the same - I usually wore leather gloves when handling wooden pallets to prevent splinters- RM2 users should (IMO) do the same - Makes sense from a health and safety position, Jury out on this one (imo)

[lentjes] 28/1/2016 07:57

I saw the same link last year from the PP forum and kept an eye on the updates and whilst they had some complaints this appears to have gradually faded especially related to the friction problem with the acceptance that the RM2 test period is over and the RM2 pallets are here to stay. Also I think a number of the comments came from guys in the mail rooms who had a sideline in selling on wooden pallets but now that they need to return the pallets this revenue stream has now been cut.

One complaint they stated that was a little confusing was that the RM2 pallet was heavier when I thought that one of the advantages of the RM2 pallet was its weight ?

One of the common complaints related to RM2 failure to pick up the pallets although this again appeared to relate to small volume receivers not in a closed loop but something I would think RM2 Clients need them to resolve if the business model is to work.

For the next update my expectations are not for great things as the problem with the friction system will impact revenue until at least Q 2/3 this year but I would like to see progress on production and confirmation of orders including volumes & value

[pugugly] 27/1/2016 20:12

Seems to be some ?? instutional switching at 31p - Too small for a holdings rns unless a %age point is passed but continuing slide in the share price since the last rights issue. Now down some 25% an no statement but if no significant news they could probably claim " Roughtly in line with general weakness of AIM stocks"

Any one in the USA got any direct hands on useage of these pallets ??

A google search has turned up a link but might have been influenced by a competitor though worth reading (imo) however largely relates to the Mark 1 product not rhe current "non slip" version.



Also from Perfect Pallets web site - but then they might be biased !!!

[pugugly] 23/1/2016 12:37

Certainly much cheaper and probably (imo) easier and cheaper to refurbish but not as hygenic - Also not sure how many trips can be expected from a wooden pallet.

But imo new RM2 proposition is not sufficiently attractive for general use - Maybe OK for closed circuit usage - but does this sector offer a sufficiently large market?

Very much in need of a trading update before taking an invest/not invest again decision.

[montyhedge] 20/1/2016 17:25

Wood is better.

[pugugly] 20/1/2016 15:45

Keeping on falling - Woodford must be losing a packet - However if business plan succeeds then good recovery potential-

Any users of these pallets able to give feedback.

[my retirement fund] 09/12/2015 14:17

Only a complete mug would have paid 40p for even more shares in the most recent placing so no point in comparing the present price to anything other than just daily noise.

[pugugly] 09/12/2015 12:16

Can now buy at the last institutional placing price of 40p - (imo) Could still be a lemon - Personally I suspect a number of logistical difficulties and lack of trading update is a worry to me.

Anyone in the business heard anything ?

[pugugly] 08/12/2015 15:47

Could this be another Woodford lemon ? Still looks to be in free fall. Heading back fast to last placing.

[mattjos] 24/11/2015 21:09

I can see the attractions of the market that these guys can see however, I struggle to see how they are going to gain any decent traction against the likes of CHEP.Plastic pallets have been tried many times in the past with exaggerated claims as to their benefits over wood but, have always failed to date.The 'green' claims of RM2 seems rather inflated and I suspect their peer review did not fully take into account the way so many logistics-related companies collect, repair, reuse and recycle wooden pallets before they finally end up as something useful such as compost heaps, Finally, were they ever to succeed, what we do do for kindling wood & November 5th bonfires?Looks like they have a shedload of slippery MkI pallets out there now, which will likely continue to attract American 'push back' towards the product. They certainly know how to spend the money here though.

[hamidahamida] 23/11/2015 09:39

How can you trust this management they have failed to deliver on all the metrics they promised in the admission document. 2014 turnover should have been $16 million failed on that guidance.2015 turnover guidance was $60 million we all know that's not going to happen they'll be lucky to deliver $4 million revenue, they are coming out with Pathetic excuses for their failure.They have burnt through almost $100million since the admission, $25 million burnt in last 6 months alone and yet today the market capitalisation of this failure is shockingly £140million over priced Bargepole overpriced stock