Capital Share Discussion Threads

[adamb1978] 19/10/2023 11:41

So apparently the Tamesis horrific gross margin forecasts were not guided by the company. CAPD has guided in its results etc that margins will come under pressure, but the analyst seems to have got a bit too excited

[adamb1978] 18/10/2023 19:56

I've also emailed the Tamesis analyst...

[hedgehog 100] 18/10/2023 18:21

An IPO last month of relevance to CAPD:-

05/09/2023 07:00 UK Regulatory (RNS & others) Tribe Technology PLC Admission to AIM and First Day of Dealings LSE:TRYB Tribe Technology Plc

"Tribe Technology PLC, a disruptive developer and manufacturer of autonomous mining equipment, is pleased to announce that admission of its ordinary shares to trading on the AIM market of the London Stock Exchange will occur, and dealings in its ordinary shares will commence, at 8.00 a.m. today, Tuesday 5 September 2023 ("Admission"). Dealings in the shares will commence under the ticker "TRYB". The ISIN number is GB00BMY63X13 and the SEDOL is BMY63X1.

Admission highlights

-- Market capitalisation of approximately GBP22.2 million on admission

-- Successful fundraise of approximately GBP4.6 million (before expenses) at an issue price of 10 pence per ordinary share of 0.05 pence each in the share capital of the Company ("Ordinary Share")

-- Comprises of a placing and subscription of approximately GBP4.5 million and a retail subscription of approximately GBP0.1 million (together the "Fundraise")

The net proceeds of the Fundraise receivable by the Company will be used towards (i) fulfilling the existing order book and increase the Group's level of inventory, (ii) pursuing the Group's product and technology road map, and (iii) expanding engineering, sales, and support staff.

The Company is being advised by Allenby Capital Limited ("Allenby Capital"), who are acting as Nominated Adviser and Sole Broker.

Charlie King, Chief Executive Officer of Tribe Tech, commented:

"We are delighted to announce our admission to trading on AIM today. We believe that AIM is a natural fit for Tribe Tech, with its international investor base and proven track record for helping technology companies achieve their growth ambitions.

"Our technology is the solution to the reverse circulation (RC) drill rig market for improving efficiency and safety in the rapidly changing world. Today marks an important milestone for Tribe Tech. We are excited to be working towards the completion of our first autonomously operated drill rig later this year."

Background to the Group

Tribe Tech is a disruptive developer and manufacturer of autonomous mining equipment designed to improve productivity, reduce costs, and improves safety across the global industry. With the smart market mining size as a whole expected to reach US$23.05 billion by 2028, Tribe Tech is well positioned to be the leader in automotive drill rigs.

To date, reverse circulation ("RC") drilling has been characterised by a lack of automation due to the complexities of the systems required and the harsh conditions in which these machines operate. The Company's RC drill rigs are being developed to remove operators from the dangers that are involved in traditional RC drill rigs. The board of directors of the Company (the "Board") believe that time is a barrier to entry and has already invested extensive engineering hours in the development of the Tribe Tech Drill Rigs.

The Group has leveraged strong working relationships with key players globally and in Western Australia's Pilbara iron ore region to build market traction in its target customer base, ranging from contract drilling service companies to global mining operators and producers. The Company has secured firm orders in excess of GBP10.5 million, creating a strong commercial pipeline. Beyond its RC drill rigs, the Company is confident that it has the potential for a robust sales pipeline in relation to its sample system products, which can be sold on a stand-alone basis.

The Company's Admission Document is available to view on its website at www.tribetechgroup.com . ...

About Tribe Tech

Established in 2019, the Group was founded to create a safer, more efficient work environment through the development of fully autonomous reverse circulation drill rigs in the mining industry. The Group's core activities are the development, in-house manufacturing, and sale of its autonomous RC Drill Rigs incorporating its core proprietary intellectual property, the Tribe Technology Drilling System ("TTDS")"

[adamb1978] 18/10/2023 17:46

"If they can't be bothered, they should not present the forecast."

Completely. Showing flat gross profit to 2026 when turnover is ramping is daft.

If these aren't company guided forecasts, then if I were CAPD I'd be shouting at Tamesis and getting them to pull the note and/or ending any relationship with them. Having these forecasts out there are doing the company a complete dis-service

[mtioc] 18/10/2023 16:38

I don't think the analyst or the company have focused on FY25 and FY26. From FY22 to FY26:

- Sales increase by c. $90m or 32%
- GP is flat
- Admin costs go up by $2.7m in Yr1 and are flat after that (really?)
- EBITDA goes up by $2m or 2.3%
- EBIT (for me the most important) declines by $14m or 25% (and the EBIT margin from 19% to 11%)

The EV/EBITx increases from 3.7 to 5. That could be right for a business with declining profitability and shrinking margins.

However, I don't believe the company or Tamesis have up-dated the outer years (25 and 26). If they can't be bothered, they should not present the forecast.

[wrighna1] 18/10/2023 12:14

Thanks Adam for your input.Perhaps it's a conservative / basic forecast as you say. But it put me off buying some more when I saw it , as the top line story looks very different to the bottom line trend !Will keep an eye on it for now.

[adamb1978] 18/10/2023 11:59

Agreed hpcg. Its been a consistent refrain by some of us on here - a buyback would be a good use of capital and they should be moving some resources to it asap.

[adamb1978] 18/10/2023 11:47

Hi Wrightna1

You make a good point and I dont know. The Services revenue stream is lower margin than the Drilling and Mining lines, but it shouldnt have such anywhere near as big an impact given the relative sizes.

Tamesis say that gross margins go from:

2022: 46.2%
2023: 43.5%
2024: 38.8%
2025: 35.5%
2026: 35.2%

Or put another way, Tamesis say that revenue increases by $93m over 2022-6 but gross profit only incraeses by $900k. They forecast decreasing net income too.

Tamesis' numbers look rudimentally put together though as admin costs are modelled flat at 47.1m over 2023-6, which also looks odd.

Anyone know? I've emailed the company.

Adam

[hpcg] 18/10/2023 09:14

Vast sections of the London small cap market look cheap, and by the continuous stream of takeovers that is also the view of actors with money. The only way to counteract money flows is for companies to provide their own flows, which means buy backs.

[fozzie] 18/10/2023 08:52

We are back where we were two years ago, this is just the most frustrating share. Its always looked very cheap, will we ever reach any kind of sensible valuation.

[wrighna1] 18/10/2023 08:46

Does anyone know why the gross margin % in tamesis estimates for fy24 falls back meaning 10m less adjusted EBITDA in Fy24 vs Fy23? New to this company

[rivaldo] 18/10/2023 08:28

Tamesis have retained their 160p target price and forecast of 18.5c EPS this year, giving rise to a P/E of just 5.1.

This despite Q3 being slightly behind forecasts due primarily to the Perseus Mail drilling project hiatus and Q3 weather seasonality. Tamesis expect a strong Q4 due to the ramp up of the drilling contracts at Ivindo and Reko Diq.

With Mining Sevices and MSALabs now comprising over 30% of revenues CAPD are "no longer just a drilling business".

In summary (extracts):

"Capital are clearly on track for another record year (4th consecutive year of revenue growth), and are well placed to continue with an active tendering pipeline, growing geographic footprint (having recently entered into America with their Nevada Gold mining contract – see note) and first-in class services."

"Capital’s holding in Allied Gold was worth ~$10 million as at 30th September 2023, at Allied Gold’s share price of C$4.74. The company’s investment portfolio stands at $47.8m valuation vs $42,1m as at 30 June 2023."

"The shares are trading on EV/EBITDA multiples of 2.2x and 2.4x 2023 and 2024 respectively, PE ratios of 5.1x and 7.0x and a dividend yield of 4.1%."

[adamb1978] 18/10/2023 07:21

Still looks cheap I agree. Nothing massively new in there that will get the price moving unfortunately. The Nevada contract is useful though if material given it moves a bit more of the geographic exposure away from Africa.

As said before, the focus at some point needs to move to cash generation and buying back shares (or paying fatter dividends). Whilst investing for growth is great, they're not getting credit for it so a tweak to the capital allocation decisions before long would be beneficial for shareholders

[rivaldo] 18/10/2023 06:45

Q3 results look positive, with revenue guidance maintained despite the usual African hiccup such as in Sudan.

Drilling continues to thrive with new contract wins etc and revenues up 9% on last year, supported by mining revenues up 39% and MSA Labs up 36% year on year, with both these also up nicely quarter on quarter too.

The investments are now worth almost $48m, up in the quarter from $42m after the Allied Gold IPO and backing up around 26% of the m/cap in themselves.

At the current valuation and low single-digit P/E CAPD still looks extremely cheap. And of course the gold price is now rising back up again for obvious reasons.

[otemple3] 13/10/2023 23:51

Thanks Darlocst, will listen in the morning ?

[adamb1978] 13/10/2023 11:53

Q3 was on the 18th Oct last year, so assume we'll get one next week?

[darlocst] 13/10/2023 06:20

The comment was made in the webcast by the CEO yesterday - the recording has not been uploaded to Centamin's website yet but should be available here at some point:

[otemple3] 12/10/2023 18:52

Thanks DarlocostThat's always been their plan so no change - can you point me in the direction of the comment as I can't see it in the RNS or slides but may be being blind

[darlocst] 12/10/2023 15:14

Confirmation today in the Centamin RNS & investor presentation this afternoon that the Capital Sukari waste stripping contract will finish in mid-2024. Centamin have $34m cost against remaining waste stripping in 2024.

Centamin CEO thanked Capital for delivery of contract and said they remain a trusted partner at both Sukari and for the wider Centamin group going forward.

[podgyted] 12/10/2023 13:22

Rudd and Boyton sold £5m in June 2023. To be fair, they still own close to 18% between them.

[adamb1978] 12/10/2023 11:46

No-one is selling are they? Last director dealing was a c.100k purchase

[yasx] 12/10/2023 11:40

Why are those running the Co. selling the shares if the prospects are so good?

[rivaldo] 09/10/2023 06:23

From Citywire today:



"Allianz manager Knight drills down into Capital prospects

Capital Ltd (CAPD), previously known as Capital Drilling, is an example of a small-cap stock being hit disproportionately hard by negative news, says Allianz Global Investors’ Richard Knight.

The Citywire Elite Companies A-rated mining services company has a focus on the gold mining industry in Africa and is a top 10 holding in Knight’s Allianz UK Listed Opportunities fund where it makes up 2.4% of the £197m portfolio.

‘The shares have performed poorly following a trading update in July, though the update was only slightly soft on revenues and led to very minor downgrades in profit expectations for the year, though management guidance was maintained,’ Knight said.

He added that the ‘more salient news’ was the ongoing longer-term contract wins in mining services in new metals and in new geographies that ‘significantly de-risk the business operations’. This, along with growth in materials testing means it ‘warrants a much higher valuation than the group average’."