Hydrodec Share Discussion Threads

[capricious] 30/1/2017 11:56

Good post 1gw, the only thing I would say, is that I didn't take it, or believe that's what they were inferring, with regards to 2016 profit. This was never the case, and only achievable for the last quarter, which they have delivered.


I feel this is why sometimes people rush in and then rush out, when an update doesn't match unrealistic expectation.

For me the update aligns exactly with my hoped for expectations. They managed to create the positive EBITDA during a traditionally difficult time, and off the back of an unfavourable crude market. I think 2017 will be much better but again it will be a gradual improvement in share price with fits and starts.

[1gw] 30/1/2017 11:43

sleveen - I'm not sure it's clear-cut on the near-term need for funding, but I agree it must be very tight.

In the interims they reported $0.6m cash and $1.4m headroom under wc facilities.

In October they announced the additional investment by G&S Investment ($1.37m feedstock + $0.33m cash), which also reduced Hydrodec's ownership of Hydrodec of North America (and consequent share of liabilities there).

So it does seem to be a race to get to cash breakeven and beyond, but I think it is still credible that they could get there without needing more investment (depending largely I think on how wc has grown as they ramped up sales).

On the other hand, I am somewhat disappointed that their earlier-declared "focus on delivering a profitable 2016" seems to have turned into just 1 quarter of positive EBITDA.

[sleveen] 30/1/2017 10:20

The other thing is we aren't told the quantum of the EBITDA..

It could be $5000 or $500,000, both values fulfilling EBITDA.

The latter being material whereas the former isn't.

[onedayrodders] 30/1/2017 10:17

comedy ... I think the continuous seller question got answered today

[capricious] 30/1/2017 10:15

Well I had the same thoughts about cashflow but if there was a material change such that the business is in trouble, I would've thought it would be beholden of them, under fiduciary rules, to inform investors.

So it remains tight as before, otherwise they might've added a line in the update and yes I imagine some discussion around extra funding, comes up during board meetings.

Personally I wouldn't be suggesting a placing at this time, as at some point they also want to expand capacity, I'd rather they combined the two, it's a better sell. Right now you'd be hit by the low sp, and dilution-wise, pretty bad. Maybe Andrew will allow rollover of current loans and or slight increase... but he also has the UK business that he is busy growing, so he's not going to throw money around.

[sleveen] 30/1/2017 09:49

At interims, operating cash outflow of $4.2 and net current liabilities of $5.2m.

Even if HYR are EDITDA positive in Q4 some form of funding is necessary given the current liabilities $5.2m

[yump] 30/1/2017 09:43

That could be enough to mean its off the bottom. Wasn't there a long term chart in the header, or am I imagining it ?

I wonder what chances they have of breaking into clean profit in the next couple of years and what their maximum capacity is, before more capex is needed for more or extended plants.

I assume they wouldn't bother to stay in business if the current reprocessing capacity wasn't enough to make a profit, given a certain volume. At the moment I can't work out where the limiting factors are.

[edmondj] 30/1/2017 09:40

Time will tell! ;-) Fair and interesting point about the majority shareholder.

[keya5000] 30/1/2017 08:33

Sleeven,

Not a company that does placings historically.

I would think the major shareholder Mr Black would rather extend a debt facility than dilute himself (if needed) at this stage of the curve.

[sleveen] 30/1/2017 08:26

EBITDA positive at the operational level, but there's still G&A etc to pay for.

Placing likely IMHO.

[keya5000] 30/1/2017 08:25

Thats simply because the update is a 'trading update'.

Trading updates concentrate on trading whilst cash is a statement of financial position and would not unless an issue occurred from lack of such that had an influence on trading be mentioned.

[edmondj] 30/1/2017 07:50

Yes trading wise, although a key issue is cash which they don't mention so one wonders at the extent this is to preface a share issue. The end-June balance sheet cited cash down from $2.4m to $0.6m like-for-like, and long-term debt up from $10.3m to $16.1m with a $1.1m overdraft also. In such a context, "cash" becomes paramount but the update doesn't cite it, talks instead of becoming EBITDA positive.

[vida] 30/1/2017 07:27

Looks pretty positive to me. Certainly turning round.

[onedayrodders] 28/1/2017 21:24

perhaps comedy ... lets see

[comedy] 27/1/2017 16:25

onedayrodders their holdings rns shows where they were on 20th january which they rnsed on 24th january...then look at volume since then

26/01/2017 2,639,977 4,722,293 7,362,270
25/01/2017 4,273,110 6,613,660 10,886,770
24/01/2017 18,895,582 10,431,171 29,326,753
23/01/2017 22,598,787 22,019,040 44,617,827

and today we have had a 13mill odd trade...so to my calculations they are out...all we will have now is pi's who are waiting to buy in when they sure overhang gone...and others who have taken stock will probably sell as we move up...but expecting rns probably today or monday to say no longer notifiable holdings.

[onedayrodders] 27/1/2017 15:59

well the pattern of their holdings RNS suggest that IMHO .. they do not seem preoccupied with the stock or it's prospects. That may not be a direct slur on the company and more a cash call etc but it still doesn't change what I'm saying.

[keya5000] 27/1/2017 13:29

ODR,

The volume since their holding RNS has been over 90m, 140m if you include Friday

That suggest they may have a few less now than 87m.

Who says they are selling them all?

[onedayrodders] 27/1/2017 13:26

How can the overhang be gone with Aviva constantly drip feeding large blocks of sells ? they dropped 5m recently and they still have 87m left

[comedy] 27/1/2017 12:09

cant buy can sell 300k in a oner...think they need sellers????

overhang gone.

[comedy] 27/1/2017 11:20

think overhang gone...bought another 100k ...then had to do fok to buy 50k...so think bounce on.

[sep800] 27/1/2017 11:04

It appears 13.8m was the final batch of the overhang, with recent buys @1.9p eating into this volume. There should be an RNS stating both overhang and new investors position.

Great buying opportunity at this level

DYOR as usual

[papillon88] 27/1/2017 10:57

Level 2 strong stock well bid cant buy on line at 1.9 buy orders have to go direct to market offer will move shortly

[comedy] 27/1/2017 10:39

guys anyone know how big the overhang?

[trotterstrading] 27/1/2017 10:14

Seller almost done?! If so we could be set to go higher

[gimmetheloot] 27/1/2017 10:10

Big trade at 1.8 nearly 14million