Harland & Wolff Share Discussion Threads

[jaknife] 24/10/2023 08:38

wiltowin,

FFS, I've just shown you how the "future earnings" that you're expecting, in a best case scenario still mean losses for HARL. They need to more than double revenue just to reach break even - and break even won't repay the debt!

JakNife

[wiltowin] 24/10/2023 08:31

The problem with naysayers is they're stuck in the past or even the present and fail to grasp the fact that you invest for future earnings. Harl is winning contracts left right and centre and will continue to do so. I've witnessed many naysayers miss out on big returns by being too frightened to dip their toe in the water, naysayers put your money in a savings account for your poultry returns. I'd rather invest in harl myself a company with a bright future imho.

[linesal2] 24/10/2023 07:40

Keep trying Jak, Someone might believe in you but I doubt it.

[jaknife] 24/10/2023 00:26

wiltowin,

"Total contracted revenue for the next seven years sits at £1 billion in total, up £100 million since March."

That revenue is going to be earned over that 7 years so basically what you're highlighting is that there's expected revenue of about £143m a year for 7 years.

People have been suggesting a gross margin of 20% on that revenue so (notwithstanding that historically the company has never achieved anywhere close to a 20% gross margin) let's run with that and assume a gross profit of £28.6m (20% of £143m).

From that you need to deduct administration costs. If you look at the last results:



admin costs last year were £53.4m and the year before that they were £24.7m.

let's make a miraculous assumption and assume that they can get the admin costs back down to £25m as they were in 2021. That leaves a profit of £3m.

Then you need to factor in the finance costs (interest). Last year they were £12.3m and HARL is proposing to double its debt so we need to pencil in something like £25m per annum. That leaves forecast losses of £22m a year.

Can you see the problem yet?

Wise investors remember the phrase: revenue is vanity, profit is sanity but cash is king.

HARL may have lots of revenue on its way but historically it's had pathetic margins. Even if heroic assumptions are made about margins then the admin costs and interest are going to wipe out the gross profits and leave HARL loss-making. You could fiddle with the numbers and try to make some even more heroic assumptions but, more importantly, where are the profits going to come from that are needed to repay the debt?

This is as simple as I can break it down for you. The business cannot support $200m of debt and, if we're realistic, it can't actually support the existing $100m of debt either. That's why a massive equity fund raise is needed and, why the existing debt needs converting to equity. And when that happens it's going to happen at a huge discount to the current share price such that existing shareholders are going to essentially be wiped out.

That's why HARL is a massive sell.

JakNife

[wiltowin] 23/10/2023 20:06

Total contracted revenue for the next seven years sits at £1 billion in total, up £100 million since March.

[linesal2] 23/10/2023 15:28

This time next year we will be millionaires off HARL!

[jaknife] 23/10/2023 10:48

Well the technically insolvent black-hole that is HARL's balance sheet has grown from £50m to £80m and is forecast to be £120m (by HARL's own broker) at the end of 2024 so something is definitely growing at HARL!

[wiltowin] 23/10/2023 10:34

It's potential growth I invest in and harl has potentially a very very lucrative future. Naysayers on here would be better off putting their money in the bank, yawning.

[ramlamb] 22/10/2023 22:30

wiltowin - Just posting a truthful alternative to the paid rampers.

[loglorry1] 22/10/2023 22:09

Very few AIM companies are worth investing in. It's pretty much all bad. You get the odd one and the odd spike but long term performance has been abysmal in the aim index.

I only really rate one which I hold in any size and that's BLV. It won't interest many people here because it's a slow and steady quality stock which pays a nice steady growing dividend.

I never understood why anyone would invest in AIM it's swimming up stream. Some decent trading situations and some shorts but not much else of note.

And yes out of the thousands of AIM stocks I know some have multi bagged.

[wiltowin] 22/10/2023 21:55

Curious, what do you naysayers get out of posting on this board?

[ramlamb] 22/10/2023 20:49

linesal2 - Afraid you missed the boat (Ha Ha) 'Aurrigo International' IPO @48p in September 2022 now 155p - Proper AIM stock with a trustworthy CEO. No more tips from me though you don't deserve any.

[linesal2] 22/10/2023 20:10

Ok, log/Ram- what is a good aim company to invest in? seen as you are very vocal about companies not to invest in. and Ramb we already know you are losing money hand over fist with NWF....
And I can not get over you actually posting HARL is only worth 0.5p a share you really are deluded.

[ramlamb] 22/10/2023 18:29

linesal2 - HARL have current market cap of £22m - not an awful lot in this day & age. If the company was such an investors dream / profit making machine / dividend payer it would have been snapped up with loose change by a bigger company.

No doubt some may have run their finger over the books, but ran away laughing. HARL is a penny share stock, oh wait, I'm being generous there, not even worth 1/2p.

Don't complain when the phoenix rises from the ashes and you have nothing to show for your investment - JW & Arun won't blink an eye - just rinse & repeat.

[loglorry1] 22/10/2023 18:00

Debt Projections

31 Dec Net Debt £82.5m

01 Mar Took $25m to go $100m on existing facility
Broker calcs £38m loss FY23 & £25m FY24
£20m Deferred Interest FY23 & £25m FY24
£82.5m+$25m+£38m+£25m+£20m+£25m=£211m (beginning of 2025)

[loglorry1] 22/10/2023 17:18

FY24 it's £200m forecast revenue. 25m more losses and by start of 2025 they'll owe c£211m. See their house broker note.

Why would anyone lend them £200m when half if it pays off current lenders from day one and the rest gone shortly after.

Happy to debate but use the correct numbers.

[linesal2] 22/10/2023 16:41

Loglorry1- If you were an investment banker there would be no businesses in the UK.
Liabilities £88M contracted work £1.5Billion+ at Min 20% margin and you think they can not get finance.

[loglorry1] 22/10/2023 16:04

Marconi's shares were worth less than 1% of peak value at the point they were restructured.

Once again HARL has not changed sales forecasts see the last RNS. Even if they hit the forecasts they are insolvent and need a large capital injection as they repeatedly state in their accounts.

If anything more sales makes the situation worse as it requires more working capital and HARL have never shown any evidence that they can turn sales into profits. Quite the opposite in fact.

The situation is quite easy to fix but not without wiping out equity. That should be of no surprise because the BoD that you all support have loaded the company with more debt than it can repay on your watch. You now have to conceded that your ownership will quite rightly be transferred to the lenders unless you repay them as agreed.

[linesal2] 22/10/2023 15:43

Loglorry-"The only hope you have against a big rinse is if government back loans in an insolvent business thereby bailing out current debt. It's never to my knowledge happened before."
Marconi.
But it is not needed here- we are winning multi-million-pound contracts and if the grid gets its connectivity issues sorted there will be millions more in windfarm Contracts.AIMHO

[wiltowin] 22/10/2023 15:38

Obviously out of my deapth invested here with so many knowledgeable experts telling investors not to buy lol.

[loglorry1] 22/10/2023 13:17

You can't borrow against the promise of revenue when the b/s has negative equity.

You can borrow against assets or reliable future cash flows. They only have a history if losses. Nobody will lend against what they have without a government guarantee. They even state this over and over.

The only hope you have against a big rinse is if government back loans in an insolvent business thereby bailing out current debt. It's never to my knowledge happened before.

Your mortgage analogy is flawed. They have no assets to lend against and no equity component for the proposed loan.

[loglorry1] 22/10/2023 12:40

Lol and back in March they also were saying the £200m loan was imminent.

What is "annualised cash break even" sounds like some sort of b/s KPI John Wood has created back in march and now forgotten about. They have huge debts where the interest is being rolled up. That won't even show up in the c/f.

If the company is b/e why does it need a £200m loan and the auditors going concern statement says that without that they are no longer a going concern.

I think I trust the house broker for a lower bound on losses of £25m. They'll probably be a lot worse.

[pwhite73] 22/10/2023 12:24

loglorry1 - ""The company says it plans to be cash positive for FY24" Where did you hear this? Their own brokers forecast losses for FY24 of £25m"

RNS 01/03/2023 - "Therefore, upon review of the structure of the Backlog and pipeline, the Company believes a slightly more conservative view of the annualised cash break-even threshold is prudent at this stage and believes that annualised cashflow break-even will be achieved in FY24."

Xenor is spot on. You and JakNife need to get out of your AIM tiddler mentality. Losses do not always indicate a company going bust. All of the major global digital companies racked up losses in the tens of millions before traction bit. A full year loss for HARL of £25m on secured contracts worth £1.5 billion is peanuts. Furthermore the company clearly stated the projected losses are due to them hiring more staff due to the recently secured contracts.

As for the comparison with Cineworld. Cineworld had liabilities £4.5 billion compared to HARL's £88 million. Cineworld was losing business to online and digital platforms. Point me to any website where ships are being built online.