Cradle Arc Share Discussion Threads

[nick2412] 08/1/2015 11:31

Kiwi, I think there is much more realism about CRA now although if there is a bullish statement about any single CET project then I would antiicpate a re-rating. It could be one of several as there is next to nothing in the price for CET. To be fair, you've always been realistic and that's proven to be the right approach.

Cash will reduce, but there should be a current cash position of approximately £9m so there is that healthy cash element to factor in to the valuation. Also, according to CRA the cash will turn CET into a cash cow on several fronts. That of course, at current levels, only needs to be accurate for one of the projects / applications for CRA to multiply it's current m/cap.

With ACI looking such a solid performer and the soid cash position and reducing losses then CRA is quite a 'comfortable' share to be in at current levels.

[kiwihope] 08/1/2015 11:01

Bullster,

Almost certainly stage payments on this type of work.

I get the feeling there is a slow underlying improvement in Corac's fortunes. This is coming from an improvement in the two trading companies and reduced losses/more focus in CET.

But I don't know what the long-term future is for Corac. The two trading companies are profitable but on their own do not justify a £20M market cap (remember they were bought for £11M and their value will not have doubled). So there is still some value allocated to CET (about £5M maybe, give or take a few million). If CET doesn't perform then the share price may drop further. Conversely if it does perform then we could see a rise.

[the_doctor] 08/1/2015 09:54

I note dashcroft hasnt returned to explain the contraditions he posted or comment on questions

[bullster] 08/1/2015 09:51

I wonder if staged payments are built into these contracts.

Small companies won't want to incur and carry costs until they get paid at the end of a long timescale project.

Well done all Corac employees.

[pavey ark] 08/1/2015 09:30

ACT is a niche defence contractor and has improved margins to 26% from 23%.Although no indications have been given I would not expect the margins on these contracts to be less.
The fact that these contracts are spread over two years is an additional advantage as it gives forward visibility and allows for additional order ie. not a "hunger and burst" situation.

[secretsqu] 08/1/2015 09:25

One of the orders is scheduled for December 2015

[timmbo] 08/1/2015 09:18

ACI have been around for 75 years so I guess they are viable. http://www.atmospherecontrolinternational.co.uk/

[qackers] 08/1/2015 09:17

fair comment Cliff

[cliffpeat] 08/1/2015 09:06

qackers:

The combined orders of £13.4m are scheduled for delivery in 2016.

No indication of when in 2016, how they are being financed or the likely profit contribution. Without this information it is not possible to make an informed prediction of the impact on the viability of ACI or the Corac group.

That is why, in my opinion, this stock will continue to be a "sentiment" investment for some time to come.

If the 2014 trading update is generally positive I expect that the orders will be regarded as a good foundation for the future - but without data that is an untested assumption.

My hope is that sentiment/optimism pushes the price up to 10p (last funding sp) over the next few weeks and that the value punters are attracted here (then I will cut my losses and be out:)

Just opinion - DYOR.

@CliffPeat

[qackers] 08/1/2015 08:17

According to ADVFN, Corac's market cap is £19.5M. Combined value of ACI's recent orders is £13.4m according to todays press release.

[timmbo] 08/1/2015 07:08

Another contract. We need a re-rating now.

[paulgo] 06/1/2015 17:07

There aren't Optimist but the trickle over the last few trading days has caused the drop, as it so often does.

[optimist] 06/1/2015 16:49

Nor many sellers, less than £4K today.

[paulgo] 06/1/2015 16:30

There maybe some forced sellers around at the moment with the self-employed tax deadline at the end of the month. Creates a great buying opportunity though, these are worth at the very least 10p per share of anyone's money....DGC or no DGC!

[the_doctor] 06/1/2015 10:26

Update expected by the end of Jan kiwi

I think it's worth noting that the 'ahead of market expectations' probably refers to the financial side (ie. Wellman, CET R&D, central costs).
IMO there's still a risk of announcement that:
- DGC is to be discontinued
- Saudi Aramco decided not to take the project further after front end design
- delivery of the gas let down expander was delayed
- nothing more from BP

We do know that Melanie Rigby was moved out and that certain engineering contractors have left the company, but that could be the result of a) CET cost-cutting and b) completion of certain project phases (ie. clearly if a unit has been designed, built and handed to the client, there may not be a need for certain roles beyond that).
While he doesn't see it, Dashcroft's posts are contradictory and confused, so I take them with a pinch of salt - hopefully he'll return to clarify.
I don't doubt that there have been a few internal conflicts at CRA, but focusing on the CET areas with better likelihood of returns strikes me as the right way to go.

[kiwihope] 06/1/2015 09:05

"...The Board is confident in Corac's outlook and expect an improved performance in the second half of the year. We anticipate being ahead of market expectations with reduced losses and in a robust financial position..."

From half year results. No trading statement yet saying otherwise so can we still expect this? Unless something is released to the contrary in the next couple of weeks I would think so.

[timmbo] 06/1/2015 05:40

So did I after yesterday's second round of Sunday lunch! Ahem.. Sorry..

[septblues] 05/1/2015 17:42

Spirax Sarco have an excellent presence in the gas

[goatherd] 05/1/2015 16:20

Which of course means that if/when the DGC is confirmed the price will shoot up.

[the_doctor] 05/1/2015 15:59

timmbo

maybe you'll be right, maybe not
Personally I think they'll need another field trial before getting
The new rig set-up was to allow them to implement the fixes sufficiently to get a partner to help with another field trial (IMO)


ricardo
CRA said fouling and erosion
I'm pretty sure the trial was due to last months, not days


Bullster
I don't see any reason the rig changes would have to cost a huge amount - and that's exactly the way I'd want it. Cautious spending


It's pretty clear reading the RNSs that the DGC project has been scaled down as a priority. That's also why some in specifically for the DGC sold out. The DGC is now out of the price and CRA is more about other things

[ricardo125] 05/1/2015 15:43

The doctor how do we know for sure the dgc test was stopped because of fouling. I cant find that info from corac anywhere. The trial may have been scheduled to kast 140hours

[timmbo] 05/1/2015 14:57

They don't need to waste a partners time and our money on another expensive field trial, they have the new test rig for that. That's the whole point of it.

[the_doctor] 05/1/2015 13:22

'Nevertheless, the technology lives on in the In-pipe Gas Compressors as there aren't the same space restrictions to cleaning up the gas flow'

and such uses involve cleaner streams



Re DGC
I think it's somewhere in between in reality Bullster
Yes, they're continuing to work on it, but in a limited capacity. There are better uses for CRA's cash.
Put it this way - even IF they think they've resolved the issues through a liquid separator, they will still have to find a partner willing to give it another trial

The liquid separator work may also help for non-DGC uses, so not such a gamble there.
Bear in mind that the original DGC did I think include liquid separation aspects (as per the patent info posted)
It may be that for DGC use, they either need to a) remove more liquid than the DGC unit itself can handle, or b) remove more sludgy/ solid containing liquid

I still think the challenges there are too much. That's perhaps what Dashcroft is referring to, but that IMO is why CRA is spending only limited sums on this side of things.
It's quite clear from the last update that CRA is focused on more attractive compressor uses such as with BP or in renewables - where the progress is described as both financially and technically on track

IMO we may hear later this month that the DGC work is being discontinued, although I suspect they'll keep it on in a light way still for now.