Fulcrum Utility Services... Share Discussion Threads

[boonkoh] 06/1/2022 15:52

The cynic in me thinks that Harwood and Bayford will mop up the excess in the open offer, seeing how the discount wasn't that great to price until yesterday.And that the company will conveniently have a big contract win to announce in the next two weeks :)

[spectoacc] 06/1/2022 15:39

Suspect we'll eventually get a decent rise once the open offer element absorbed, but only until they next run short of money :)

[p1nkfish] 06/1/2022 15:36

Someone has been nibbling away.

Have to wonder if this, with all its problems, might re-rate on increased certainty after the open offer. It has hallmarks of unloved. Certainly in a market area that will see demand and open to consolidation.

[p1nkfish] 28/12/2021 10:24

Concern - 2% reduction in margin in interims AND THEY HAVE ONLY JUST BEGUN TO DELIVER LARGER CONTRACTS IN THE PERIOD THEY WON AT LOWER MARGIN. Not a full period of larger contracts.

Question - what happens to the margins when they have shipped a full period of larger contracts? At the same time inflation kicks-in going forward. Some of the cost base is fixed (until inflation really kicks-in) and now spread over a higher revenue but margins still dropped so they must have really had to compete and chop margins to buy revenue?

The business they won with "E" looks like low hanging fruit given Bayfords involvement and does highlight one potential acquisition target - Vantage Meters (operations) Ltd. Accounts to end March 2021 on Companies House website 20th Dec 2021. Bayford would then have some influence across the vertical of E, Fulcrum and Vantage if Fulcrum buy Vantage. Good for them.

A good vehicle for Bayford. Can't quite see what's in it for Harwood or most pis?

"Gross margin, excluding the impact of exceptional items, was 21.9% in the first half of the financial year, a reduction of 2.0% compared to the first half of FY21. This reflects the Group's success in securing a variety of larger value, and typically lower margin, contracts across its core markets, which began to be delivered in the period."

[p1nkfish] 27/12/2021 22:54

I can easily imagine a playbook similar to CRX.
RLNS, CLNs, and a share consolidation. A few years later a sale for change of control.
Near term share price appreciation is not a concern in such a scenario.

[p1nkfish] 27/12/2021 11:38

Why give income to the bank when large holders can offer the debt?
Why optimise for profit when tax on profit due to rise to 25%?

I think there is mileage in the idea the large equity holders lend to enable build out and control taxable profit by cost of debt, they gain interest income, they ignore share price appreciation for a while and they ultimately end up with a larger cash generative asset to sell on for capital gain in future whilst having taken interest income in the interim to help keep taxable profits down.

Banks can swivel, tax man can wait.

If this is correct then buying this for the long term makes sense, or as a quick sale on any bounce before it settles back down.

I can't see Bayford and Harwood being too concerned about share price appreciation in the near term.

Thoughts?

[p1nkfish] 27/12/2021 11:23

Just some thoughts.

A) obviously an attempt at buy and build in MAP and any buy and build is always risky.

B) debt risk as they mention increasing it, *optimised", or something along those lines. See C).

C) might optimised debt on cash generative assets be via a CLN (convertible loan notes) and big holders might love that. Revolving credit facility via bank, investment debt via CLN arrangement, "optimised". Optimised for whom? Debt holders get preferential treatment on any liquidation risk. Bayford & Harwood offering debt would give them income, some protection and equity upside over time - could take quite a while? Very optimised especially as rates are so low currently and there is cash waiting to be allocated. Tax on profit due to rise to 25% April 2023 onwards. Debt offered by large equity owners squares more than one circle. "optimised".

D) for now share price appreciation might not be the main target of the large holders - interest income via offering debt might be. Think about that, especially if pis are locked out of offering debt. I don't think Bayford & Harwood are necessarily playing the same game with the same goal as ordinary pis. They have incentives that could be outside of near time equity value increases via share price.

E) The other point is what about post, about, January 12th. The new shares hit the market and any upside will be limited as pis look to take some cash out on any increase.

F) In fact upside might be limited until both the acquisitions are clarified (uncertainty) and the debt level and type made clear. Both are big unknowns.

Just thoughts, dyor etc. Imho.

Convertible loan notes make sense for the large holders and Harwood are clever.
Whatever happens, debt is due to increase according to the rns release and I don't see why the bank should benefit.

[boonkoh] 23/12/2021 09:33

I think the opposite. Mills and Bayford have been concert parties to the share price collapse and fundraising. They're pretty much the only ones underwriting the placing aren't they? Therefore they've been actively involved in the planning of it for weeks. And at what price.Make no mistake this is a company now controlled by the two of them.

[johnhemming] 23/12/2021 07:37

I don't mind so much an offer that smaller shareholders can participate in. I can see the logic of the proposals.

[iglooblast1] 22/12/2021 15:25

The extended collapse in the share price and the massively dilutive share issue over the Xmas hols indicate that the Directors are seriously shareholder unfriendly. Its also surprising Mills will tolerate such a weak management and Board (there isn't even a finance director!). I just hope (pray?) for a short term opportunity to get out at a better price.

[jl5006] 16/12/2021 22:28

GL speculators

[tomtum1] 16/12/2021 22:07

In this evening at 12p. Like EV and Lithium

[euclid5] 16/12/2021 21:22

Valuation section taken from the Cenkos Bn today:

Valuation: Our updated group forecasts show growth in FY23E to £61m revenue and £4.2m in adj EBITDA, only encapsulating 9 months of smart meter asset ownership.

Our SoTP valuation produced a target price of 20.2p p/s, implying +47% upside.

[value viper] 16/12/2021 19:37

Am I thick ? Nice.But you've sold out (soyou say) and now you are preaching to everyone else on here about what's going to happen etc.Why bother, why do you care so much ?

[jl5006] 16/12/2021 19:28

No VV I dont own. I was invested for 7 years.
Y on earth would I wish to short.
Turner wants it taken private. Did not have the % b4.
Ru thick?

[value viper] 16/12/2021 18:30

You be shorting them then cause it's clear you don't own shares now

[value viper] 16/12/2021 18:28

Why do u keep saying when private you will be worth nout ??

[jl5006] 16/12/2021 17:58

GL m8
Only fools and horses spooky
and when private ur shares will be worth nout
Guess u have never owned ?

[spooky] 16/12/2021 17:05

Mills doesn't get everything right but he has had a pretty stunning record over the last few years and it would take a brave man to bet against him IMO. I will be buying some shares at the first sign of stability in the share price.

[sl71] 16/12/2021 14:53

yes he is a very good operator, but he is in it for himself, he is not our friend and the dilution that pi’s are going to endure will be significant

[spectoacc] 16/12/2021 14:22

Agree with all, but the big boys are backing them, and in theory 12p is now the floor.

Surprised to see good money thrown after bad, but do rate Mills.

[sl71] 16/12/2021 14:20

This company cannot be trusted with another 20m - they had 16m cash and no debt at end 2018 and they have blown the lot, they cannot make a net profit on sales of 51m, and now they ask for more cash to spend on aquisitions ? In addition to the large writedowns in fy 21 it is difficult to understand why 2022 would not be a recovery year for profit. Four of their stated strategic priorities have moved backwards, share price performance has been woeful, since 2018 they have had 4 ceo’s and 5 fd’s, with the market cap down to 30m the countdown to catastrophe of this small cap horror story just goes on and on, im out. Good luck to all.

[value viper] 16/12/2021 12:20

£18.5 million of £20 million from Mills & Bayford

[boonkoh] 16/12/2021 08:03

What's the betting that come Jan or Feb, there's a few nice bug contract announcements that's "taken a bit longer to close"?