Pure Gold Mining Share Discussion Threads

[mudbath] 16/1/2015 17:02

Year ended 30 June 2014
Revenue= UK US$ 20,133 USA 15,529 SOLAR 278

Segment result operating profit= UK US$1,461 USA 3,139 SOLAR(207)

[pugugly] 16/1/2015 16:30

Stegrego:> Gib while important to NGR was only part of the business and they have other plants and also the oil remediation units - The price of POO not so importatn as main thrust of the business is water cleansing - recovered oil is a bi-product all be it a profitable one that has been made far less valuable.

[loobrush] 16/1/2015 15:55

I'm out-much more damage than I thought and they will loose both staff and customers over this timeframe in my view.

[pugugly] 16/1/2015 15:01

Insurance coys always will try and find reasons NOT TO PAY as we all know - Looks like a total refurb - Look what happened to the Nature share price after the Gib fire - Never really recovered tied up management time and now down some 85%, largely (imo) as they got distracted and made bad decisions in other areas -

I suspect any money here may be dad money for up to 18 months and therefore (imo) significant further downside.

[curlly] 16/1/2015 07:33

Stegrego
It will not take long to sort the frame work out.

[adamb1978] 16/1/2015 07:30

Predictable based on the pictures of the fire. Glad I got out. Will look back in this time next year

[stegrego] 16/1/2015 07:22

Well it couldn't have been much worse on fire front, pretty much a start again job.

Insurance seems positive though, but depends on what figures they can agree.

[puffintickler] 16/1/2015 07:13

RNS out, fire update

Clean rooms and some structure must be replaced
Up to 1 year before production resumed at Swansea

But

3 year business interruption insurance cover.


All as expected on damage front, better than I hoped on insurance cover.

[mrtoad2] 09/1/2015 14:43

From what I remember when I visited the plant, most of the cleaning, polishing and inspection kit I s sited at the other end to the fire, the chemical / chemical prep and services were at the end damaged. So hopefully the long lead time equipment is intact and disruption not as bad as it could have been.

[hutch_pod] 09/1/2015 14:18

Doesn't seem to take much to move the price.

[loobrush] 09/1/2015 14:17

Indeed I think so. I had a holding in ASOS when the fire occured and then sold out-the biggest mistake I ever made as I had 10,000 @14p they are now £22.00
I think you will find that they will get back in production quicker than you think especially as most of the damage seemed to be external.The insurance company will want that to happen fast, especially if they are insured for loss of profits.
If that is the case the profits should be as expected and share price will appreciate rapidly.
As they had built in increased capacity last year it may not be as bad as expected and if they can utilise all the capacity in the future, profits could increase substantially. A good recovery play.
Soon I expect an RNS will be released with an update so we will all know.

[alan@bj] 09/1/2015 13:56

Good news on the way?

[mudbath] 24/12/2014 08:55

"An investigation into the cause of a large scale fire at the Pure Wafer building in Llansamlet, Swansea has begun."

Their findings will be interesting as there does not appear to have been any comment so far on why the fire might have occurred.Relevant also to the insurer.

There are many imponderables building up here causing much uncertainty.

We might therefore see the share price revisit 3.5 pence for a while.

[hutch_pod] 23/12/2014 13:59

Adam, I just ran some numbers as it's Xmas, and come to similar 2015 numbers to you at 6p per share, presuming solar is breakeven, no restructuring costs, a $0.5m reduction in overheads, and a halving of UK gross profit and flat US profit for prudency (pro-rating gross profit using segmental profit).

It might help that the UK has much lower profit than the US ($1.5m segmental profit vs $3.1m in 2014).

FWIW, ASOS had a fire in June this year and had received £11.5m by October covering costs and a portion of business interruption with the remainder ongoing as a claim. So it might not take two years.

HP

[jbarcroftr] 22/12/2014 21:13

With Pures reduced output maybe their competitors will take the opportunity of hardening prices

[adamb1978] 22/12/2014 20:34

Lets see what they announce regarding their insurance cover however perhaps that will give them a cash windfall in a couple years time.

Without any better information at this stage, I'm assuming that a meaningful part of the site is taken out (otherwise they would have mentioned in the RNS that it was only a small part) and that it takes 18 months before whatever is rebuilt, equipment arrives and is commissioned etc.

So I've assumed UK turnover falls by 50% in H2 and flat next year, US wafer grwos by 5% in H2 and another 5% in 2015. For overhads, I've assumed that some costs are cut in H2 so that total is £4.2m for the year (remember that a lot of fat has been taken out - they were £5.4 in Fy12) and further savings, mainly sales / distribution taken these down to £3.5m in FY16.

I therefore have 5p EPS this year and 3.5p in Fy16 before a sharp rebound in 2017 back towards FY14 levels. On the back of that, I was trying to work out my re-entry price....I think its probably somewhere in the mid 20s. Problem is that PUR has traded on a ridiculously and warranted low multiple in recent years and this was meant to be the year when things picked up again with the new capacity. Given the market failed to attribute a fair multiple to PUR over the last couple years, I struggle to see why the multiple will tick up whilst they're rebuilding etc. For bigger companies, the market would look through something like this and foucs on 2017....I'm not sure it will for PUR.

All the best for those who continue to hold

Adam

[loobrush] 22/12/2014 15:29

insurance lse
Created by aimtitan - Today 10:03Today 14:3650glass6Go to Thread
I used to work in the investment and protection side on retail a few years back
Most policies in the manufacturing side have loss of earnings protection which essentially pays out for losses on the order book for that site
this means pure wafer, once everything is reported, file the full revenue from the site for however long it is down
This is really good as it means any unforeseen costs had the site not been in a fire are mitigated
Additionally, this means a heep of new equipment
definitely a steel at this price, bought in a couple of k in the high 30s

[jbarcroftr] 22/12/2014 12:28

ST of investors chronicle seems to think they have adequate cover.

[puffintickler] 22/12/2014 11:26

Of course you can cover for business interruption. I worked in the oil refining industry where we has a business interruption claim somewhere in Europe every couple of years, they would take almost that length of time to argue about and settle so it was pretty well an ongoing task. It does make sense for a small company like PUR to have such cover but that does not mean they have it and there will presumably be a large excess charge if they do.

[prop_joe] 22/12/2014 11:15

A business I worked for had cover for business interruption i.e. to cover losses incurred if site was inoperable for a while. No idea if Pure Wafer would have this level of cover in place but just wanted to make the point that it is possible to get it. How easy it is to make a claim I couldn't say!

Main thing is that there don't appear to have been any injuries or worse. It looked like a big fire from the pictures I saw.

[adamb1978] 22/12/2014 10:04

Scratch that comment re Scandiavia - UK wafers was $20.1m out of $35.9m turnover in FY14....so the question is what portion of Swansea is operational still?

[adamb1978] 22/12/2014 10:02

Decided to bail out this morning - was only a small holding anyway (1.3% of portfolio). Annoying as I thought this had the potential to get up twoards 100p in 2015. However decided that it was better to sell as:

- cant believe that there is any way whch consequential losses will be insured
- even once the site is cleard up, replaced kit is bought and installed there will presumably be a 12-24 month period of lower/no capacity at Swansea
- they'll still have to fund opex for swansea people etc during this period, or let them go and re-hire
- I cant see the market putting this on a higher multiple til the situation is rectified given that there will always be a scepticism of when it'll be operational again and whether there will be any other costs
- related to this point, assuming there is a gap between what is insured and the costs plus the opex hit, I wonder whether their $1.5m net cash will be enough to cover this or whether they can find a lender given their operational problems or whether there will need to be an equity raising

In order to help us quantify the impact of this, does anyone know what % of PUR's capacity was at Swansea? I thought they had a facility in Scandinavia which was a similar size plus Prescott - trying to assess at what price I would buy back in
Thanks

Adam

[mrtoad2] 22/12/2014 08:32

Not a great end to the year, hope everyone is OK, coverage here http://www.bbc.co.uk/news/uk-wales-south-west-wales-30567913Looks like a pretty substantial fire!

[puffintickler] 22/12/2014 08:15

Not sure about consequential losses. I would hope to have clarification as to whether lost production and sales are covered or not, I would not take it as a given as it woudl be a different insurance to the material damage and normally relatively high cost. Personally I would not have taken this type of cover.

Obviously they can mitigate such problems by using spare capacity at Prescott, especially as they should be able to air freight the raw material over there at reasonable cost so time lapse should not be a problem.

We will just have to wait to see what caused the fire, how much damage has been caused and how long it will take to get back into production.

Today's fall of 20-25% in the share price looks about right to me.