Batm Advanced Communicat... Share Discussion Threads

[picsous] 14/12/2022 21:26

Why cancel the shares as they are being hoovered at the risk of increasing the price?
Best to cancel them once the buyback has concluded.

[fse] 14/12/2022 19:30

I am not sure what they plan to do with the shares. Normally they would be cancelled
It’s a fair question maybe echo or someone knows how that’s supposed to play out.
It is actually highly beneficial to shareholders at these prices who plan to hold.
As I said earlier if the share price remains depressed into the new year then its worth selling some booking a loss and transferring them to a tax free account yearly top up. That’s what I am doing FWIW

[kooba] 14/12/2022 18:28

Why the odd position of ex ceo staying on the board as a non executive ..unusual and normally very difficult for the incumbent having previous ceo checking your homework. Anyway I guess we see how in pans out soon enough...there is no evidence that the succession is anything but Zvi's planning to be fair..a proper process should have looked externally ..maybe they did but it appears a shoe in for Zvi protege to me.

[echoridge] 14/12/2022 18:20

I repeat, perhaps less obliquely: I don't think there's any chance we have Moti-for-Zvi if it didn't have LO's blessing. They won't be making any alternative plans with Zvi with that kind of backdrop I would think. In fact, it's likely Moti's their guy more than anyone else's.

[kooba] 14/12/2022 17:25

A real test will be if Moti seeks to bring in a new broker after 25 years of the same..A Numis , Singer or Peel Hunt might bring a new approach and credibility that could really signal a change, as Zvi still sits as a non independent director of Shore Capital.Both Zvi and Howard Shore sit on the board of ADOR as well which could be seen as conflicted at some point.There needs to be cleaner lines and hopefully if LO are not aligned in some other plan with Zvi , they will back Moti to make such changes.

[echoridge] 14/12/2022 17:04

I've said before, I believe LO's 30% stake trumps Zvi's 21% all day long here, and this is a bigger move than the market appreciates. On that theme in fact, I think that the 'strategic matters' comment was a bunch of blah, blah in aid of being politic and maybe even to save a bit of face. He retains no executive role and that's what truly matters. It's an open secret that Zvi was a deterrent to simple things like greater research coverage and better relations with Israeli institutions, so there is already a lot of low-hanging fruit for Moti to improve the share price through a clearer story and wider coverage, even if he were 'Zvi's guy', which you seem to fear, though I definitely do not. Beyond those simple changes however, I also believe Moti can deliver more profound change like we've discussed without interference from Zvi. I guess we'll see soon.

[kooba] 14/12/2022 16:35

Will be interesting whether there is a noticeable change in approach to IR once Moti steps up officially , i hope so but am not convinced with founder and 21% shareholder Zvi still on the board and has said he will be dealing with strategic matters that will be the case. We will see , Moti has to prove he is his own man and can progress the business and the profile. He will have options over 2% of the company which hopefully will align him to shareholders..would still like to see him fund a purchase out of his own resources..since the company is not restricted ( see buy back) why the hell not if he wants to convince his shareholders they are value!

[echoridge] 14/12/2022 16:10

We're so close to agreeing on 'x' and agreeing to disagree on 'y', but I just can't let that little dig you slipped in there go uncommented upon. NO ONE here that I have read, least of all me, comes anywhere close to 'happy to believe their every word....'. Some however, like myself, feel the 'disappointments' have been grossly exaggerated in the share price, while the accomplishments (ie., the stuff they 'promised' and then 'delivered' upon) have been commensurately ignored in this market. As I've said many times, in addition to the self-inflicted wounds we've discussed ad nauseum, the latter has also been the result of a number of factors that were outside the Company's control including the index deletions (again, a massive negative factor that no one should forget or ignore) and a general small cap market that has been absolutely poisonous this year. The result is a share price that 'agrees' with you much more than me right now, and I'm ok with that. I think pushing out Zvi in favour of Moti will help accelerate the changes needed to make me feel a whole lot better a whole lot sooner than otherwise.

[kooba] 14/12/2022 15:45

Amen to simplifying the corporate structure and improving the communications..there needs to be far more continuity in what they say and actual progress in aligning to that expectation. They need to deal with the jam tomorrow tag and manage expectation better. Not everyone it seems is just happy to believe their every word even when they disappoint , this year has sorely tested their patience and the share price demonstrates that.

[echoridge] 14/12/2022 14:46

And I guess (partly) what I'm saying is that I don't really care about 'next year's numbers' that much per se. I think there is so much embedded value here that Moti and team can generate significant returns just by simplifying the corporate structure, providing more transparency on things like the economics of the CF deal, announcing this new cyber contract, etc. These are so much more front-of-mind right now, though I admit I am assuming the SE deal will close at some point.

[kooba] 14/12/2022 14:33

The $25m contract is already factored into the forecasts for next year..so its not an add on..it would obviously be a positive if it was confirmed as they seem to think it provides a gross profit of $10m..lets hope the customer doesn't balk at the margins! However if the contract does not materialise then next years numbers would be immediately in doubt.

[echoridge] 14/12/2022 14:27

The Moti-for-Zvi is still, for me, a very big deal in plugging the holes on comms and other shareholder-focused, long-overdue changes at the Company.

[echoridge] 14/12/2022 14:23

And though I would add a thing or 2, I agree with most of that, except the last half-sentence. In my mind, the shares are dry tinder at these levels and (still) very high cash + real estate levels. Closing on any of the several known, and likely just as many unknown, opportunities, will energise the share price in the immediate term, particularly as market sentiment generally has improved and of course, the buyback is/will continue to soak up stale holders.

[kooba] 14/12/2022 14:19

The company has much to deliver in Q1 to regain market confidence they are moving in the right direction , 2022 has been poor in communication ,forecasting and delivery..with the only real bright point being an early adopter for Edgility which is highly significant apart from the initial scale of the contract.Risk reward obviously favours the upside if the company can start to meet their spiel. But any proper recovery in the rating must be some way off as the amrket wont be taking much on trust for now.

[echoridge] 14/12/2022 14:12

Again, I don't think that's entirely fair. The Company's 'confidence' in early 2022 has not at all been proven wrong entirely. Yes the contract slippage is damaging, both for this year's numbers AND for shareholder confidence in management's communication approach. However, in any other market environment than for UK small caps in the past 18 months, the Edgility deal announcement would have been greeted as the massive breakthrough that it was. Clearly a decent proportion of that early confidence of Zvi and Co was based on a powerfully positive response to the early beta testing and the belief that Edgility had/has an important competitive edge in the marketplace. And I therefore think one can ably claim then that some of that early confidence was more than justified. In principal at least, if not in the share price.

[echoridge] 14/12/2022 14:02

On the testing equipment half-life, maybe so, but I think we'd both agree that Moti and Co know a hell of lot more than either of us, so for me, any assumptions on how to interpret inventory build have to go in favour of the Company; ie., they wouldn't do it if they weren't confident, though it can always go pear-shaped. Anyway, the much broader point is this: if - and its a big if - we're right and the difference that needs to be 'explained' is 10/12m (assuming the 'currency hit' was around another 4m), then I lean heavily in the direction that the bulk of that spend was in fact 'for growth', ie., into several of their significant opportunities, and not 'burn' in the conventional sense where the costs of running the business(es) are running ahead of cash generation. I concede that those costs must be on the rise as Resistance pointed out, but again, I would hope they are specifically tied to known opportunities and do not (unduly) worry me. Certainly not enough to come anywhere near diminishing my views of the upside potential for the shares anyway.

[kooba] 14/12/2022 13:51

They are always confident..thats the easy bit! Unfortunately the share price evidences that the market don't take their confidence in delivery as read..thats why they are priced where they are..supported mainly by fair aggressive buy back. ..and they are finding stock.

[kooba] 14/12/2022 13:49

They were confident on making the year end numbers only at the end of August...confidence and delivery are different things.

[kooba] 14/12/2022 13:47

Even with your gain on disposal tax paid..if it has. That is $12m against $28m decline in cash. Is currency such a huge factor ..what were they holding and why wasn't the bulk of a $us reporting company holding $us that was not being used in operations? Who knows.Whitewashing comment was in respect of LO moving over 29.9%.Your comment on current valuation i had said before the profit warning..that it was already discounting much bad news so agree it is still discounting much and is not factoring in success ..maybe not surprising as recent experience shows they aren't the best at foreword looking statements.the lastest trading update on lack of contract must have been known for months they would not make numbers.The idea on inventory build is possible but so is the fact they have obviously no idea when this gets signed or even whether it will ..i understand the reagents in the tests have limited life so would be worthless after 4-6 months so cant think inventory build with no signed order is that sensible...as that could lead to another write off.

[echoridge] 14/12/2022 13:37

Oh, I left out an important - if obvious - related consideration: the 'information' the Company is/may be conveying by re-engaging with the share buyback. I think - and I reckon most would agree - that BATM management have demonstrated a pretty conservative approach to running the business; too conservative in fact, for many here. I do not believe that the Company would begin a process in the buyback that could see them spending 5-10m over the next 6 months or so if they - or their advisors/auditors - were worried about significant cash depletion. In fact, for a Company of this size, I would think there would be a 'requirement' to maintain something like 20-25m in working capital to satisfy those advisor/auditors, so if we are on a path to buying back up to those 40m shares, then there is, I believe, an implicit confidence being conveyed by management regarding expected cash generation over the near- and middle-future.

[echoridge] 14/12/2022 13:28

huh? No one is whitewashing anything. I gave you my back of the envelope numbers to start with which apparently included a payout you hadn't considered, the 4m or so in taxes on the disposal. So again, that's around 12m. I don't know the quantum of the 'currency' hit, but I disagree that that number necessarily should have come back by now. So let's call it 15m total on that. From there, I agree with Resistance that the bulk of the balance has gone into investment in their promising near-term opportunities (for the record, I don't think its at all fair to dismiss any inventory build so glibly. I think it shows in fact, confidence in closing the big order, but I guess that's a debate for another time). So no, overall, though I may quibble about a couple million here or there, I am not worried about the 'cash decline' - and I certainly don't think the Company is 'burning' cash in the conventional sense - though I concede we can't know for sure until we're able to see the cash flow statement in the year-end accounts. You obviously feel differently. That's what makes a market I guess, though I will say, again, the share price is at 23p, so perhaps we might just give a tiny nod to the notion that the market may be near as cautiously priced as it's going to get already.

[kooba] 14/12/2022 13:06

"The Israeli Companies Law allows the Company to cancel shares that have been repurchased, and, if they have not been cancelled, they would be classified as dormant and would not be granted any rights for as long as they are owned by the Company. Therefore, no dividends would be paid on, and no voting rights would be exercised in respect of, any repurchased shares."If LO do not participate in the buyback they will be over 30% shortly ..unsure what happens there under TO code presume a whitewash is agreed to hold over 30% as they have not changed their holding to effect the move over the 29.9% level.Good there is no sensible or fact based response to the cash depletion..i'm sure if there was intensive investment planned the company had every opportunity to set this out with the interims but said nothing save what i posted. Many have been citing this as a cashflow positive business all year..not so much hey.Lets ignore the cash burn and assume its bullish..professional like.

[nellyb] 14/12/2022 12:51

agreed, thanks.

[echoridge] 14/12/2022 12:48

I'm not sure, nelly. Sure, cancelling the shares would send an even stronger message, but tbf, taking the shares out of market circulation has to be the main goal here. And besides, having shares in Treasury can serve a couple of useful purposes including using them as awards to employees, to making a strategic acquisition, to even selling them to a corporate or institutional buyer should one emerge. Having said that, like you I'm hopeful for a simpler outcome where the businesses continue to progress and grow in 2023/4 and the new management opts to cancel them. For the time being, let's just get the 40m shares off the market!

[nellyb] 14/12/2022 12:38

echo, what do you think bvc will eventually do with those shares currently in treasury?