Augean Share Discussion Threads

[velocytongo] 13/1/2020 10:43

Perhaps people were hoping for an upgrade. It's exactly the same as last year.

[johndoe23] 13/1/2020 08:38

Usually a good sign. Surprised at drop upon positive news?!

[bluebelle] 13/1/2020 08:32

I do like stocks with quiet BBs !

[volsung] 17/12/2019 15:40

Cheers sf. Was a bit risky what with the Hmrc shennanigans but the business seems sound

[scottishfield] 17/12/2019 15:38

Well done Volly, I saw this at 80p and did nothing!

[wind dancer] 10/12/2019 16:41

Not sure I understand? We don’t have £28m we have £21m after paying the LTIP
So we now have £20m of actual interest bearing debt against the HMRC theoretical debt!
Tax treatment accounted for it does not make sense to me.UNLESS you really don’t fancy your chances at the Tribunal.Easier to finance this now than in the full glare of a negative or part negative decision.
Watch out for a deal on a 50/50 basis materialising in H1 would be my guess.

[jlloyd] 10/12/2019 09:40

"As a Group, we are now in a position to use our cash balances (c. GBP28m at the end of November 2019), together with the Facilities, to pay all HMRC assessments received in full. These have been paid to stop any further accrual of interest from today"

Doesn't this remove some uncertainty?

[cerrito] 10/12/2019 07:32

An interesting RNS.
I would have thought they would have waited a couple of days to see the election results.
I am assuming that HSBC charge less interest than HMRC.
I see they get some immediate tax relief but I am going on the basis that if they win their case this will be reversed next year.
My first reading is that it does little to change my perception of the business uncertainty.
Look forward to hearing how all of you read it and will be interesting for me to see the market reaction.

[cerrito] 08/12/2019 22:18

I went through my notes on the AGM and I see that all resolutions were passed 90pc plus so those who studied the remuneration report were obviously happy.
I also see that my notes said that Meredith works just three days a week so he knows how to negotiate.

[velocytongo] 05/12/2019 15:07

It's called "heads in, tails you loose" capitalism. I agree that the company should not be paying that amount of cash with HMRC pending and I do hope there is a claw back mechanism if the tribunal ruling goes against the company.

[wind dancer] 05/12/2019 14:20

So we give away 25% of our much lauded cash buffer in LTIPS,to mainly two directors.
Hope they’ll give it back if HMRC win their case and we are strapped.
Poor scheme that did not link it to successfully defending our position.

[woozle1] 18/11/2019 16:03

IC from 7/11 has waste sector focus at the back. Although no specific referral to AUG, it talks about the investment in Energy from Waste. The number of incinerators has risen from 33 in 2014 to 47 at the end of 2018 with another 15 in construction. I would expect this to be good news for Augean; despite the questionable environmental efficacy of these facilities.
w1

[woozle1] 18/11/2019 13:54

Anyone know what's going here.
w1

[neg] 08/11/2019 06:54

Tipped by IC this morning.

[site manager] 25/10/2019 12:07

It`s due to the dispute with HMRC.
Once that is sorted out I would expect them to recommence, especially if the outcome is favourable to AUG.

[woozle1] 25/10/2019 12:05

To preserve cash to pay down debt and in the event the HMRC lands them with a big fine

[cflather2000] 25/10/2019 00:23

Hi all, anyone know why these guys stopped paying a dividend?

[morton2011] 21/10/2019 14:19

Poorly written note from Edison but provides a lot more detail so they are clearly well briefed by Augean. Agree with Woozle that it says nothing about the future & keep remembering its not a fine its a claim for unpaid tax.

If they get the money back with interest and/or save paying interest in the event of losing then I suppose it is worth paying the cash in the bank to HMRC. It will be an interesting discussion with a Bank to borrow £ 30 million on top of that to pay unpaid taxes, what security would they offer if they lose and the implications of such a loss affects their business model.

[volsung] 21/10/2019 11:40

Bought a few more on the dip

[woozle1] 20/10/2019 15:53

I think they see it as an insurance policy. If they borrow and lodge the moneys with the HMRC, they are paying interest at 2% and get relief on the payments. Moreover, with the moneys with the HMRC, the rate of interest falls from 4%. Thus, if AUG loses the appeal, they've put a floor under the interest costs; and if they win they get the cash back.

It shows confidence in the ability to deal financially with the fine but, at the same time, shows a loss of confidence in winning.

My only concern is Morton's point that HMRC are disputing the current practises as well as historic.

[cerrito] 20/10/2019 15:32

Thanks for posting that Woozle1
I am not sure if I understand what is being proposed. The way I think I read it is that they borrow and pay HMRC as a deposit everything that HMRC is claiming and then if they win get it back with presumably a very token rate of interest. Is that correct?
Rather disappointed that is only now that we know that the HMRC is made up of three different cases which are separate so it is not binary-the full amount or zero. It would have helped everyone if this had been spelt out earlier-and if I had had the smarts to ask this at the AGM.


I stumbled across this
hxxps://www.ii.co.uk/analysis-commentary/stockwatch-can-stunning-aim-share-avoid-hazards-ii509493

[woozle1] 18/10/2019 14:01

Worth reading and provides an insight into where the HMRC dispute is heading.

HMRC landfill tax dispute
Although Augean has dealt successfully with the operational issues facing the business, the dispute with HMRC remains unresolved. At the H119 results Augean disclosed a potential outstanding Augean 18 October 2019 liability of £37.3m (including interest) and has subsequently (31 July 2019) received an additional
assessment of £3.1m and a penalty notice of £4.6m (2 August 2019), taking the current liability to c £45m.

A further penalty notice and assessment cannot be ruled out; assuming they are of a similar scale to the recent announcements, the total liability would amount to c £53m. In reality, it is important to remember the dispute with HMRC covers three separate areas of tax, including hazardous mixed load (c £20m of the £53m), biomass ash (£15m of the £53m) and drill cuttings from the North Sea (£10m of the £53m), as well as penalties and interest payments (£8m of the£53m).

Augean continues to believe that it has a strong case and that its legal challenge will ultimately be successful. Of course, given the tripartite nature of the dispute, success in one area, but not another, cannot be ruled out. However, with a strengthened balance sheet (net cash of £22.8m at 30 June 2019) and generating cash at the rate of c £1.5–2.0m per month, Augean could, if successful in negotiating a credit facility of c £30m (c 1.2x EBITDA), pay off the liability to the HMRC, while awaiting the outcome of the tax tribunal expected next year.

The company believes that such a payment would be beneficial, as it would draw a line under the dispute, bringing to an end the rate of interest accrual on the unpaid potential liability, thus allowing Augean to reduce tax from the interest shield of the debt incurred to pay off the liability.

It is also worth noting that HMRC interest is payable at the rate of 4% versus a figure of 2% for bank loans.Future cash flow could be used to pay down borrowings, recommence dividend payments, which have been suspended for the duration of the dispute, or to fund expansion (no policy yet enunciated).

Augean has long argued that the UK waste management industry is undergoing a
process of consolidation, leaving Augean as either predator or prey. Augean argues that payment to HMRC would not constitute an admission of error (we understand
the payment would be expensed as an exceptional item) but remains the only way of securing the benefits of the tax shield.