Kromek Share Discussion Threads

[chrisdgb] 31/1/2017 09:38

I am certainly going to over apply in the open offer.......

[mesquida] 30/1/2017 20:05

Thankyou, Trotters, it will be interesting to see who they are.

[trotterstrading] 30/1/2017 18:20

I met the CEO and CFO last week. I believe 2 of the 4 are notifiable, so TR1's should land soon. Impressive names apparently

[mesquida] 30/1/2017 17:31

Trotters, you seem well informed, how do you know that 4 new Blue chip investors are coming aboard ?

[trotterstrading] 30/1/2017 13:19

Looking strong guys.. 4 new blue chip investors plus significant increase by Miton in the placing. Plus £1.5m taken by the NED.Just the start of the upward movement IMO

[chrisdgb] 30/1/2017 11:04

Indeed, I still think we can build nicely from this base...

[quepassa] 28/1/2017 13:50

SM,

Perhaps it helps but isn't it far better when the cap'n of the ship, the guy who is in charge, the head-honcho, the man who is running the show demonstrates good faith and coughs up hard cash to underscore his financial commitment and belief in the equity raising?

I personally much prefer to see the Executive side of the business committing - much more than the non-exec side which may only be attending a handful of Board Meetings each year -and are perhaps less hands-on.

If my info is correct as I believe it to be, the CEO owns 2.872million shares following his excercise at ONE PENCE of a further 800,000 options as per the July RNS.

A lot of the time when there is an OPEN OFFER, you frequently get a statement to the effect that all Directors have indicated that they they will be taking up their full entitlement. -That adds comfort. That's great to see.

I like it when I see that. It gives me a warm and glowing feeling.

But I guess if you have recently bought just short of a million shares at ONE PENCE, paying a price of 20p may seem a lot but that is the price which pi's are being given the chance to buy at in the 30 for 1 Open Offer.

By the way, on a 30 for 1 basis, the CEO as a shareholder could apply for approx 96,000 shares which at 20p would cost him a relatively manageable £19,000 give-or-take.

If he's not prepared to cough up a mere £19,000 at a time when he has made a capital uplift of £152,000 on the exercise of his 800,000 July options at ONE PENCE, then I reconfirm that I remain disconcerted , discombobulated and perturbed by this element of the equity raising.

Good Luck All and may the Investment Gods smile upon you.

Wishing all a Happy Chinese New Year - Gong Xi Fa Cai - in the new lunar Year of the Rooster.


ALL IMO. DYOR.
QP

[2niffy] 28/1/2017 10:06

Que. Not only are we down 50% but 65% of the upside gone, dilution effect of another 100m shares. Private investors shafted again!

[shrewdmole] 28/1/2017 08:54

Qp

Take your point about ceo not taking part but I understand one of the ned's has put £1.5m into the placing?

Is that not a decent enough sign?

Some good points on both sides here however I like buying out of favour or recently hammered stocks.

I'm a buyer around 20-21p due to mitons huge take up and that ned buy.

Sm

[quepassa] 27/1/2017 21:12

PS.

Trotters - a little unnecessary perhaps to call me stubborn.

And by the way, isn't that rather the kettle calling the pot black?

This is an extract from your post no. 545 dated 29/4/16 when the share price was near 40p

"look back at the trading activity here over the past few days and will see the majority of the larger trades are buys. That tells me the smart money (likely II's) are accumulating.

When the next DARPA deal is announced in the coming months you will not be able to buy this share sub 50p As it will be heavily marked up from the open."



Well, the cold light of reality has proved to be very different indeed to what you have been saying.


Faced with this reality, who actually is the stubborn one?

The share is a whopping 50% down from the date of your post and 60% down on your 50p forecast. It is clear that your calls have been very wide of the mark.

Whilst I may be bearish, perhaps that stance has proved a lot more accurate than your hitherto stubbornly repetitive assertions about the skywards share price evolution of KMK.


ALL IMO. DYOR.
QP

[quepassa] 27/1/2017 19:48

I keep KMK on my watchlist for potentially better days as i do many small companies.

Whilst the $159m contract remains highly relevant as you point out in your final paragraph, the history of ongoing losses, unfulfilled promises of jam tomorrow and the unforgettable miss on sales forecasts just half a year after the ink was dry on the official prospectus for flotation still cannot be ignored.

What really baffles , discombobulates and disconcerts me about the new equity raising is that the CEO is apparently not putting his money where his mouth is.

Just why is that?

If it's all so good with new products, new contracts, increasing sales, wouldn't he be missing a great trick to forego such a fine opportunity?

Experience of long-time investing in small-cap companies has taught me that a Director putting skin in the game ( and I DO NOT MEAN free/cheap Executive share options) but real skin in the form of hard earned money is a strong signal by a CEO or Director. It is a great sign of confidence in the underlying business. Director Buying is a recognised BUY signal closely followed in the markets.

Directors not putting their own money down is also a strong signal in my view, personal experience and opinion.

Daz was kind enough to report back from the presentation and wrote words to the effect, when asked about this question, that the CEO said it was not the right time for him "When questioned about his lack of contribution to the placing, Arnab said it wasn’t the right time for him."

"Not the right time" is somewhat nebulous and open to interpretation.

Frankly such a reply doesn't cut the mustard for me. If it's not the right time for the CEO to put his own money on the table, why should it be the right time for anyone else to put their money in?

If it is such a rosy outlook, wouldn't the CEO be missing a great opportunity to invest and shoudn't he anyway buy shares to show good faith in the placing which he is fronting to private investors as CEO of Kromek?

What's your view on that?



Secondly, you mention and write in your closing paragraph "that the CEO said the company expect to make $156m contract before the end date,".

Let's examine that statement of yours.

They have a 7year contract from 4/4/14 ending April 2021. For sake of argument, let's say they have 4 years to go under that contract and for sake of argument they have $150m to collect, being $37.5m per annum.

How does this $37.5m pa square away with the sales visibility figures which they have provided? According to my calculations, the two still do not come anywhwere near to computing.

Please explain, if they have apparently reconfirmed the $159m contract to you, just why the sales visibility figures still don't sum and compute?



ALL IMO. DYOR.
QP

[trotterstrading] 27/1/2017 18:24

QP, no surprise to hear you're bearish on KMK, you have been for a long, long time. Much the Brexit debate when a person has made up their mind it's nigh on impossible to change it. Even when new evidence comes to light it's simply ignored. IMHO you will rue your stubbornness with KMK and miss out on a significant re-rate in the share price With good reason your posts constantly refer back to the April 2014 RNS for the $156m 7 year deal with a Chinese OEM. To be fair I was all set for a showdown with the CEO over the deal but interestingly it was one of the first things he raised at the presentation. In a nutshell the Chinese OEM underestimated (and mostly likely Kromek to) the work required to get a next generation CZT product ready for market in China. Therefore Kromek has spend the last 2 1/2 years working with them to perfect a product for commercial roll-out. That product is now ready. A video of said product was shown at the presentation.I agree Kromek are not devoid of blame here there should have been better coms with shareholders to manage expectations. That said delays are part and parcel of business, even more so with new disruptive technology, and the CFO raised a very valid point. Kromek developed a market leading product for less than £3m. GE would have spent 50-100x more to develop a similar product. So while the delay has been painful the rewards are now within touching distance. So much so that the CEO said the company expect to make $156m contract before the end date, and more besides, as they have enhanced the offering along the way.All IMHO DYOR

[toolsmoker] 27/1/2017 16:07

Thisbis about to pop

[quepassa] 27/1/2017 14:08

The company marketed the original flotation on figures and forecasts which approx six months later caused a shock RNS to be released about missed sales forecasts that in turn collapsed the share price.

Kromek then issued on 4/4/14 an RNS about a $159m contract detailing dates and precise expected yearly revenues from that contract. Has the 4/4/14 RNS been reliable and held water?

How much of his own money has the CEO put into the new equity highly dilutive issue?

As in the past, a blue-skies scenario again seems to be being painted about Kromek's prospects.

In the past those blue-skies have in my opinion rather turned out to be more like storm-force headwinds and gales with the share price still some 60% below flotation price and with several trips to the equity trough to keep the aspidistra flying.

In my opinion only, I think this share is an absolute dog and I personally would not now touch it even with a very, very, very long barge pole.

Good Luck All

But perhaps keep on counting your fingers. Frequently.


ALL IMO. DYOR.
QP

[gnnmartin] 27/1/2017 13:05

2n, I hadn't noticed that (bad debt provision). It merits a bit more explanation than I have found so far. To help others find it in the accounts, it appears in note 21. It looks as though another £385k might be added to that in the coming year or two.

[2niffy] 27/1/2017 08:51

Correction, rev forecasts £11.3 m April 2014 and for what it's worth £31.8m to April 2016. I accept that break-through products can take longer and cost more than initial expectations. What I don't accept is the way these changes are communicated. Regarding communication, can anybody explain the £400k ish bad debt provision hidden in the footnotes of report and accounts? Hannah, in your capacity as a representative for the company?

[trotterstrading] 27/1/2017 08:36

This is going up guys. 2 more blue chips took a large chunk (expect TR1's once shareholders approve placing)Very sticky shares CEO said the placee's understand the business and where it's heading.

[2niffy] 27/1/2017 08:28

Just checked my notes following a meeting back in Jan 2014. At the time revenue forecasts were £11.3m to April 2015 and £22m to April 2015. When asked about manufacturing capacity/cap ex to get to these milestones. Arnab's reply "not a problem, we have excess capacity only need to increase shift patterns".

[trotterstrading] 26/1/2017 20:32

There have already scaled up manufacturing capabilities, they are ready for the big DARPA orders. I didn't press on the question of renewing the HSBC facility, though Arnab clearly stated it could be renewed if they needed it. Worth noting they can easily switch manufacturing to their Pittsburg facility if Trump insists on US workers doing the large scale D3S manufacturing. Nice position to be in :-)

[2niffy] 26/1/2017 18:40

Useful to know. Does that mean they won't be renewing it? The permanent capital,equity, just issued is a lot more expensive than the credit facility if we expect the shares to perform. Statement suggests £3m from fund raising for working capital. If we are gearing up for larger orders don't we need £3m from HSBC as well?

[trotterstrading] 26/1/2017 17:39

2nif. Arnab said the £3m facility is available and he said HSBC would have renewed without issue, though he said they would not have needed it.It was not the driver for the raise. Which was all about balance sheet strength

[trotterstrading] 26/1/2017 17:35

Nice 200k delayed buy!

[2niffy] 26/1/2017 16:41

Trotters, so my post-737 was garbage? Timing of fundraising could be due to expected short term contracts but might equally relate to £3m revolving credit line that expires in March.

[daz] 26/1/2017 15:01

That was my expectation as well TT