Augean Share Discussion Threads

[cfro] 24/6/2019 16:02

Great news..

..perfect opportunity to buy a few more on the unexpected dip this afternoon too!

[interceptor2] 24/6/2019 12:25

Excellent update cerrito.

RNS released today confirms the optimistic outlook for North Sea decommissioning work.

[brummy_git] 23/6/2019 15:59

Yes 30-50-20. I hadn't included the HMRC retro tax charge, because no one yet knows the outcome. Plus I suspect it will be lower than £10m anyway, and I understand landfill taxes are also corporation tax deductible. Moreover, some of the disputed gates fees should be recoverable from the original customers, such as local authorities, etc

[thirty fifty twenty] 23/6/2019 13:19

hi Brummy… I agree with your estimations except that you have allowed nothing for the HMRC fine. I am allowing 20m to be conservative. This knocks roughly 20p from your figures. I think the max is c.35m / (35p) and possibly as low as 10p. So I see only modest upside in the short term.

All IMHO, DYOR + BoL
AUG is in my portfolio

[brummy_git] 23/6/2019 11:26

Shares are still pretty cheap. Indeed at 150p, I estimate the stock would trade on a 6x 2019 EV/EBITDA (assuming £21.9m EBITDA and 2019 closing net cash of £24.8m) multiple, and at 170p if 7x.

[cfro] 23/6/2019 10:35

Thanks very much for the AGM report.

[revoman] 23/6/2019 07:30

Thanks for taking the time Cerrito.

[cerrito] 22/6/2019 23:00

A good AGM which went on for 75 minutes and all questions well answered by the Chairman, Jim Meredith(JM). First time for about 7 years I have made an AUG AGM-I have been to 2/3 meetings years back and I was the only shareholder there, so it was a bit of a waste of time.
About 8 shareholders there. Just one NED- I have no problem with that and the COO, who is not on the Board. JM, who handled virtually all the questions, did something that set the tone in a positive way and is not often done-namely welcome and shake hands with shareholders when they registered.
All resolutions passed 90 pc or above.
64m out of the 104m shares voted ie a high turn out ,which one would expect given the shareholder base.
HMRC
Hardship for the South has not yet been granted.
They are still going on the basis that it will go to the Lower Tribunal early next year but warned that with the Tribunal’s backlog, this could be delayed. JM did not want to comment on how long the Tribunal would take to make a decision and then one has the scenario of either party appealing. That said, I have concluded that we need to brace ourselves that by the next AGM there may be no resolution-either because it is in Appeal or that the Tribunal have not decided.
He said very little chance AUG and HMRC would cut a deal. AUG felt they have done nothing wrong and HMRC want a definition. Had no hard intelligence if other companies in this space are in the same situation with HMRC.
Agreed that not needing to spend as much management time on this now and have strengthened the way they control tax collection/assessment. AUG act as tax collectors for HMRC and required to assess tax payable. As highlighted in the last trading update question of penalties. Depends on how cooperative they have been with HMRC - ie they have done an extensive internal audit and did come up with some genuine errors on which the level of penalties will be modest one assumes.
I went into the meeting assuming until this is sorted out AUG will not be undertaking major initiatives and this was implicitly confirmed. Basically running the company for cash and non maintenance capex focused on removing bottlenecks ie in Port Clarence treatment.
General business conditions.
Commented that ash volumes had been lower than expected as delays in getting plants on stream-something as an ex IRV shareholder I am only too well aware of.
North Sea going well and very pleased with the Curlew deal. The Scottish Government has the ability to steer that decommissioning be done in Scotland. There are five ports who can do it, one of which Lerwick is not very functional. AUG are in Dundee and Aberdeen. Curlew will take 3/6 months.
That said JM did say that while big picture is great potential in North Sea, in the short term revenues can be very unpredictable.
As they have stated in their previous two Trading Updates, radioactive doing well after all the frustrations of recent years. North Sea has naturally occurring radioactive waste.
JM was very good at not letting the cat out of the bag in terms of how good things were going and I was surprised to see Friday#s TU.
I got a clear takeaway that there will be ups and downs in trading and it will not be a straight line. He said he had to stress to the City that it is not a utility business with predictable revenues. I also gathered that N+I Singer had done a research report with a sensitivity analysis of differing levels of revenue.
Brexit
Not much of an issue. Going on the basis that they will continue to operate under the current EU regulations and that the UK Government will have, in the short term, other things on their minds and so will not change the guidelines. JM did comment that EU regulations based on tonnage are not fit for purpose for the current environment climate.
They do send some waste to the EU.
Management Structure
To me interesting the pay gap between JM and the FD-respective total compensation is £271K:£354k. This reflects that JM works three days a week. Now that they have finished the general restructuring and indeed the HMRC he is now more of a traditional Chairman.
Ps
Forgot to ask if they have now collected all the cash from the East Kent sale but no doubt we will be told on July 17 in the interims.

[woozle1] 21/6/2019 10:17

Quite extraordinary really. One just questions, what was previous management up to? The HMRC liability is no longer a problem and can not bankrupt the company as was previously the worry. No wonder management and Chris Mills were filling their boots when the m/c was £30m. I'm very glad I followed them in!
w1

[cfro] 21/6/2019 07:40

Another ahead statement! :0))

Cash in bank a now at £20m. What a turnaround!

[revoman] 14/6/2019 07:15

AGM isn't today, it's next Thursday 20th.

[cfro] 11/6/2019 18:28

Cracking end to the day! :0)

[woozle1] 11/6/2019 14:42

agm friday. maybe something is leaking. w1

[revoman] 11/6/2019 12:24

A bit of action going on today.

[woozle1] 17/5/2019 15:58

felt like a tree shake
w1

[cfro] 17/5/2019 13:45

Lovely chance to buy the dip today.

[woozle1] 09/5/2019 17:22

If they retain the cash and don’t pay for decommissioning then it’s no good for Aug

[woozle1] 09/5/2019 17:20

Db, was that you making fun of the royal family !

[danny baker] 09/5/2019 08:35

Woozle, decommissioning costs are immensely important for the 3 oil companies I mentioned. Yes they are oil producers but their market value depends on how much cash they receive for taking on these liabilities. Look at RRE's current purchase of Marathon to get an idea of the numbers involved. By potentially controlling decommissioning costs the oil companies can retain more of this cash as windfall profit. Therefore AUG and companies like it become very important and valuable in the process.

[woozle1] 01/5/2019 11:32

DB, just wondering why you are comparing AUG to ENQ, SQZ and RRE. The latter are operators and are buying up oil/gas fields, presumably for extraction purposes, and are commodity price plays. AUG may end up as an oil services businesses.
w1

[danny baker] 01/5/2019 09:20

Woozle, I don't think the underlying core business was doing as badly as what the share price was suggesting at 25p. Investor sentiment was badly affected by the landfill tax demands. Augean is in the right place at the right time with its North Sea business. Decommissioning costs and the money paid for them is big business now for companies in the North Sea like ENQ, SQZ and RRE. Augean has increasing strategic value so it could still perform well from here.

[woozle1] 01/5/2019 07:30

What were the previous management upto? I've never seen something turn around this quickly!
w1

[revoman] 01/5/2019 07:26

That TU will do nicely. Explains all of the buying being done by insiders during the period.