||EPS - Basic
||Market Cap (m)
|Oil & Gas Producers
Real-Time news about Rock Solid (London Stock Exchange): 0 recent articles
|multibagger: I am beginning to toy with the idea that RSI may be re-listed sometime in the future, once the company is clearly back into profitability, having good revenue visibility/ order backlogs and may have even paid a maiden dividend. This would "soften" up the market as would be attractiveness of the share vis-a-vis the likes of THAL and GTC from a valuation point of view. I hope my other seismic imaging play VIY comes good by then as well....waiting forever it feels like.
The sectoral valuations of the likes of THAL and GTC, compared to RSI would be attractive to investors. This period of de-listing though painful and frustrating as we have effectively been locked in, has been important to allow the company to focus on re-inventing their product offer and approach without being under the spotlight of relentless share price drift. The company seems energised and gaining rapid traction.
Our backers (Sector, East Hill) will be wanting to take profits, I imagine, after a decade of pumping funds into the company and keeping it afloat. Dividends though sweet, won't be enough ROI. Hence, my view that they will get RSI to re-list, sell off part of their stake for a tidy profit.
The alternative would be for the company to be put on the market to be bought by one of the bigger E&P outfits / Private Equity. Both scenarios are becoming increasingly possible given the recent recruitment activity and major deal with Pemex. I am fairly confident that we will soon have another major deal(s) announced with another NOC / SM - could be the likes of a BP, Statoil and/or a Chinese NOC.
May be actually time to be buying some shares in RSI....I never thought that I would be saying that ever !|
|multibagger: Hi RBonnier !
I guess many are looking for an exit (including me) at a break even or better share price. Re buyout, your guess is as good as mine as we PIs are such a small minority that we cannot influence in any meaningful way and hence may not figure in their calculations.
The report is a good 70 pages...so I may give it a full read when I have nothing better to do (which is not often the case !) and post if there is anything of significance or possible interest to PIs.
I take some comfort from " a cash generative business" by end of 2013, but as always shall believe it when it happens :) Good Luck !|
|multibagger: Hi RBonnier !
THAL and GTC have seen significant upward movement in share price over the last year or so...though my darlings in the sector( RSI and VIY) are clearly dredging the bottom. The sector is seeing so much new exploration related activity that it appears that companies are able to get contracts quite easily. I am hopeful that by default some work will turn up. You too must have got an email about a buyer on britdaq, but I have not bothered signing up to gold membership as yet - any idea what is being asked/bid ? Good luck :)|
|multibagger: Approx 14.86% have changed hands since the announcement - I guess a fair few would have been bought by the party acting in concert. That could theoretically bring them to the 66% holding range (guesstimate) - 75% is not too far away.
'Shall wait to see the holding declarations with interest. At the current share price, the risk/reward ratio is fantastic, if the estimates of a 1.4p EPS by Aug 2013 come through. Cash burn is a major issue, but contract payments should start coming through. Why else would there be a 30 Sep 2012 time frame for the secured one million dollar credit. The insolvency risk may be overdone - the major backers have a lot more to lose as they have backed this over many years at many multiples of the current share price. The company is deemed to have sunk and this is reflected in the current share price.
Some are brave or stupid enough (like me) to take a punt....once you have gone under, does it really matter whether you are 6 inches or 6 feet underwater ? May still pick up some more :) Each to his own....|
Depends which way you look at it.
It's a sell from a private investor but the Market maker fox Davies bought the shares off them at 1.25p so fox Davies are now long that 150k shares so will look to offload them at 1.5-1.75p no doubt. Some would say that is strange as fox Davies are the ones with a 13p target here.
This strategic review is starting to annoy me now to be honest. The share price is now below, nearly by half what it was when they started it, for the reason that they thought the Market wasn't valuing the company properly.
Well I await the result of the strategic review but what on earth are they doing?
If the Market is not going to value the company at what the company thinks it should be I imagine the directors will be buying millions of shares each when we conclude the review. I expect them to be issuing options at multiples of the current share price I expect them to get on the presentation trail and start getting the word out. I expect them to be meeting with institutions and increasing the shareholder base.
Anything would be better than this!!!|
|christianf12: I think the company must be livid with this current share price They started the strategic review when the share price was around 2.5p as they thought the market wasn't valuing it properly, yet the share price is now 1.5p.
People selling at 1.25p. I hope they can justify starting the review when the outcome is released as it has got to be worth 4p imo if so.
Not long to wait now as company stated:
Disappointingly, despite the significant progress made since November 2010, our share price appears to be completely disconnected from the current and future potential of the business. The difficult capital markets, has meant that raising equity funds to build on that progress and take the Company forward at speed did not appear to management to be palatable option. For these reasons, the Board decided to explore the strategic options available to RSI and accordingly on 9 November 2011 announced the appointment of Simmons & Co International Limited to assist us in that review. When completed, the strategic review may result in proposals to stay as we are, restructure, sell part or sell all of the Company. This process will continue into the first quarter of calendar year 2012 and I look forward to reporting on the results in due course. In the meantime, as can be seen from recent contract awards, the RSI team is very much engaged and pursuing commercial opportunities.|
|christianf12: Best bit, are they basically saying the market cap should be around £14.5m? That would be 9pps!
Impairment of goodwill, tangible and intangible assets
The Group is required to test, on an annual basis, whether goodwill and other intangible assets and intangible assets with indefinite lives have suffered any impairment. At each reporting date where there are indicators of impairment tangible assets are also tested for impairment. In this test the net book value of the cash-generating unit is compared with the associated expected discounted future cash flows over a five year period. If the net book value is higher, then the difference is written off to the Consolidated Group Statement of Comprehensive Income as impairment. The recoverable amount is determined based on "value in use" calculations.
One indication of impairment is the Company's share price and the resulting total market capitalisation. At 31 August 2011 the Company's closing mid-market share price was 3.50 pence which gives the Company a market capitalisation of approximately £5.5 million, which is significantly lower than the total shareholders' equity at the same date of approximately £14.5 million.The directors, while disappointed with this low share price despite the significant progress made by the Company since November 2010, believe that it is disconnected from the current and future potential of the business. However, the Board of Directors recognise that the low share price means that a review for impairment should be undertaken.
The use of the "value in use" method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the net cash flows. Discounted future net cash flows for IAS 36 purposes are calculated using a pre tax discount rate of 22% (2010: 22%). The Directors believe that this discount rate includes a suitable allowance for the risk and uncertainty inherent in forecasting cash flows. The Directors determine forecasted revenues and costs for each cash-generating unit over a five year period based on a combination of historical experience and projected growth rates for the WISE and WSS segments which are corroborated by external sources and sales pipeline, wherever possible.
The Directors have carefully reviewed the Group's latest order book and sales pipeline which gives them comfort that the revenues planned for the financial year ending on 31 August 2012 are achievable. Recent investment made in the business and its market positioning (as explained in both the Chairman's Statement and CEO Report) should lead to significant levels of growth into 2013, 2014, 2015 and 2016. However, as with any forecast, there is bound to be a degree of uncertainty which increases the further into the future forecasts are made. The markets may not grow as predicted and the Group's share of these markets may not follow the Directors' plans for any number of reasons. A further analysis of the principal risks and uncertainties facing the Group is set out on page 8.
The Directors have determined that the Group has two largely independent cash-generating units, the Well-driven Integration of Seismic and Electromagnetics business (WISE), and the Well and Surface Seismic interpretation business (WSS). These cash-generating units correspond to the Group's business segments and further information describing these is set out in note 4.
The WISE market is forecast to grow by between 25% and 30% pa. (2010: between 25% and 30% pa.) over the next five years with the Group's share of this market increasing from approximately 15% (2010:15%) to approximately 50% (2010: 50%). The Group's WISE revenues are forecast to increase by between 50% and 60% pa over this period (2010: between 50% and 60%). Assumptions relating to the high growth of the WISE market are based on projections made by the Directors and reflect the relatively small level of revenues and low market penetration in the financial year to 31 August 2011. High growth levels are also supported by the increasing rate of adoption of EM technology by oil companies, particularly national oil companies and the Company's position in the market as the only independent integrator of EM, seismic and well data.
The WSS market is forecast to grow by between 5% and 10% pa (2010: between 5% and 10% pa) over the next five years with the Group's share of this market increasing from approximately 5% (2010: 5%) to between 10% and 15% (2010: between 10% and 15%). The Group's WSS revenues are therefore forecast to increase by approximately 40% pa (2010: 40% pa) over this period reflecting the Group's new focus on the South American market and the fledgling market for geophysical services to oil companies investing in un-conventional reservoirs. The Company is developing a technical leadership position in the market for consulting on un-conventional reservoirs.
The calculation of the value in use for each cash-generating unit is most sensitive to assumptions for:
(a) the forecast rate of growth of the Group's revenues in the WISE and WSS markets over the next five years;
(b) The growth in the market for hydrocarbon potential of un-conventional reservoirs such as shales and tight gas sands; and
(c) the discount rate used.
The Directors consider the value attributable to net cash flows generated from the WISE and WSS businesses to be higher than the current carrying value of goodwill, tangible and intangible assets and consequently no impairment adjustment is required. However, attention is drawn to the risks and uncertainties in arriving at this conclusion.|
|christianf12: The startegic review was announced on the 9th November when the share price was at 2.25p because the company were not happy with the share price as it didn't reflect the value of the company. Since then all we have had is contract wins yet the share price hasn't budged.
I would say we are due for another run North v.soon. The sellers seem to have finished now.|
|christianf12: Very upbeat! I did wonder why someone was very keen to get in yesterday by paying over the offer price!
I like these 2 bits:
· Continued sales of a 79 well multi-client rock physics study in the Barents Sea and commencement of a 61 well multi-client rock physics study in mid-Norway;
Disappointingly, despite the significant progress made since November 2010, our share price appears to be completely disconnected from the current and future potential of the business.
RSI obviously think the share price should be much higher, like us!|
|christianf12: Best thing about RSI at the minute is that it is still completely off most investors radars.
Take a look at the various messgae boards, Fool, lse and iii and see how many posts are written on RSI, hardly any. There have been less than 500 posts on here since the thread was started just under a year ago. Some shares get 500 posts a day : )
I think people will want in as it comes on to their radars as the share price keeps rising and the company continues to issue good news. That will have a massive effect on the sp, as we know, not many buys are needed to send this up.
Then they will see the Fox Davies target price and compare to the current 2.75p and see that this share price could and should increase by over 400% just to get to that target.
Fox Davies are conservative with their targets so we should climb over the 13p.
Interesting times ahead!|
Rock Solid share price data is direct from the London Stock Exchange