Questair Tech Share Discussion Threads

[cerrito] 13/8/2009 16:45

These have done quite nicely are have now gone up to 70Can cent or 37pish..having just listened to the4 conference call think I will remain with them but given the cautious short term outlook price may go down somewhat

[asparks] 06/1/2009 10:49

dont get sucked in.

its finished

[cerrito] 20/12/2008 17:23

Have been told by Barclays that I have to either sell or set up a SIPP Foreign Dealing account with associated custody charges which has focused the mind.
I think I am going to stay.
The key thing is they have reduced the cash burn to $2.1m in the March/September 08 semester and forecast a $4/$5m cash burn in the FY to sept 09 which suggests they have 2 years of cash following the $9.3m of cash they had at Sept 08.
In addition they had a $1m a/receivable line intact though if that is going to be there when they need it is anyone's guess.
The fact that they beat their ambitious June/sept 08 revenue forecast gives them some credibility for forecasting.
Their current mar cap of £1.2m/$1.8m is the same as the amount of cash they should have in March 10.
I drew some comfort from the orders they announced on Dec 18 though would have drawn more if they had given information on the amounts involved.

That having been said they were clear that they are no quick goals to be scored ie that hydrogen sales will be slow and the following underlines the need for patience:
Quote

"Our efforts to grow the biogas business, particularly the emphasis we
are placing on expanding our channels to market and selling complete
solutions, will not be reflected in our financial results immediately.
However, we expect that substantial progress will be made in fiscal 2009 to
implement our biogas-focused growth strategy, which will translate into
improved financial performance in future fiscal years,"
unquote

Anyone else in the same position??
Indeed on the basis that I stay and there may be some selling pressure from those who want out before they leave AIM which will lower the price the question is if I put more in.

[cerrito] 08/12/2008 09:31

I note that there was 1500 traded on friday but in the 19 days before that just 27 shares so the decision to quit AIM is very sensible as far as they are concerned; need to bring myself up to speed and the new CEO seems more focused but my question as will be that of others given the current market value of my shares and the fact that their hoped for blockbuster in the refinery market will have no sales in the foreseeable future is it worth incurring the cost of Canadian custodian fees.

[grgkecer] 15/8/2008 09:08

The consolidation seems only to have given the shareprice further to fall. Given its products, the company's success ought to be certain, but it is not helped by the current economic downturn. I think it worth investing in, but timing is crucial.

[cerrito] 12/8/2008 12:06

Now that marcap is £ 4.8m have been looking at topping up having digested latest results and conference call.
I have enough and will not top up but those who have no exposure may want to dig around.
While they have $10m cash at June 30 following the recent rights issue, they are still plagued by cash flow problems and in the fiscal year to 908 are expecting cash outflow to be $7.5m although it is expected to be lower in the next FY to 909.
Any revenue generation from the H6200 seems to be at least 12 months away.
The current share price seems about fair but would be interested in other views.

[grgkecer] 09/5/2008 19:17

Dipped below the Public Offering price in Toronto, but has moved up again.

[cerrito] 04/3/2008 15:28

modest share price increase today justified by the two bits of good news although how they can cut so many people without apparently hurting the bone of their business is surprising....tie in with Exxon good news but not clear it will solve the need for further financing and we will need to wait a few more months till we see if the H6200 is really commercial.

[cerrito] 13/2/2008 16:29

Conference Call Highlights
Repeated aim to get sales for the H6200 by fiscal year end ie September. They have not taken prospective clients on refinery tours until the tests are completed hopefully end of March. Seemed relaxed about working capital requirements if they do get orders given that they should be able to get ample prepayments and also that his supply chain and manufacturing plant were robust enough.
Canadian Government R and D funding programme finished end of September and unlikely they will get more funds from it.
A good deal of discussion on funding issues; they affirmed their revenue and cash burn guidance for the year but recognized that the position was tight, even though the cash burn the last quarter was higher because of the them working on the deals they signed up in the quarter ending September.
Of course this current market hammers companies like this who are loss making and need fresh financing. Am keeping the faith but will not be buying more; hopefully they will be able to announce some H6200 orders to give the share price a fillip before the cash runs out....indeed I see that the price has dropped post conference call.

[keyno] 17/12/2007 17:57

Most grateful to you Cerrito for your trouble. Not the best of times to be holding such an AIM share admittedly but nevertheless I am not thinking of selling my modest - and I have to say currently getting more modest as time rolls by - holding.

[cerrito] 13/12/2007 18:07

Q and a highlights Conference Call
Cash Balance
While cash burn is forecast to reduce to $8m this year partially due to lower capex (my notes tell me down to $1m) and r and d recognized that with cash balances of $8m and unused bank facilities of $2m at 907 do need to explore what they described as a range of options concerning their financing; no decisions have been taken by the Board and will be taken in quote relatively near term unquote.
This is a big downer.
H6200
Went live just more than a month ago and has been working very well and while they do still have people on site it is being essentially run by refinery staff.
Recognized that will need for it to operate till end of march for it to have credibility to start getting major sales but a clear priority for fiscal 08 is to make the first what they term a first fully commercial sale.
Sales Backlog
Their aim is to convert the 907 sales backlog to invoices by 1208 with 80/85% being booked by fiscal end 908/ Those that will be recognized in 08 calendar q4 are two big orders placed in 07Q3 which will be delivered in Q3 and recognized in Q4. Would not give guidance as to anticipated future order backlog- fair enough .
Methane/Hydrogen purification
Felt comfortable Both going well especially helped by high gas prices. Commented that have a much more diverse product line than a few years ago. They will be putting more r and d money into bio methane.
Supply Chain
Clarified that generally speaking no supply chain issues apart from 6200. At the time of the last conference call had been a problem given the rapid rise of their commercial orders with internal project management teams and external suppliers but claimed this had been sorted out.
ShareTrading and shareholding
Confirmed that more trading on TSX than on AIM and that their impression was that European investors were tending to use TSX.
Claimed they had a diversified shareholder base for the 75% of shares not held by their 2 big investors but given complexity of their story few retail investors
Fuel cells
As an ITM holder interested in a comment that was not expanded on that they have as I understood it won a research contract with Exxon/EMRE for hydrogen fuel generation looking first at forklifts and then fuel cells. Unfortunately they spoke rather fast and mumbled a bit.
Conclusion
My gut feel is that this company is going to make it but our patience will be tested especially with the need to raise cash.I will be pleasantly surprised if this time next year the price is more than 35/40 but am still holding on.

[cwilliamham] 03/9/2007 11:29

Thanks for last post cerito. This company appears to have a grat future but is risky owing to cash burn and orders lower than I had anticipated. I still hold.

[cerrito] 02/8/2007 18:29

Listened in to the conference call this pm with the third quarter figures.
I have been running around today so have not had time to really look at the numbers but I am concerned at the continuing cash burn and losses- despite the fact that being able to book the Cincinatti deal in the last quarter their revenues increased very nicely, that sales are exceeding expectations and that their gross margin held up, despite the fact that they had fewer higher margin engineering contracts. They quoted a figure of 34% which they expect to maintain in the future.
I have not yet got a clear explanation as to why the loss of the first three quarters of this FY was up from that of last year. At least they have not changed their expectations of cash burn for this FY.
They are correct when they said in the call what they said in the RNS-namely that they do have a lot going for them in the gas purification market where on an order basis 49% of the business was in the first three quarters of this FY;; that they do have a good order book with sales having exceeded expectations and that sales in the immediate future look quote pretty strong unquote.
Discussed the three priorities they set.
The first the continued delay in the H 6200 was discussed..this should be installed in early September and they promised to issue a RNS when this was done; the reason they gave for these delays was that they were being very cautious/safety conscious and that it is summer in France and difficult to get things done. The next stage after installation is to run it for a few months to get the data etcet so that prospective clients can then make an informed decision. They in my view correctly stated that they could not forecast when sales will be made.
I suppose once more a question of watch this space.
The second is growing sales of gas purification products
The third is getting their supply chain ramped up for the increased sales orders. This appeared to be taking a great deal of time. Traditionally they had a record of delivering on time and on budget. This was being jeopardized with the increase in sales. As I understand it not investing their own money in plant per se but strengthening their team of field engineers and project managers and improving relations with their fabricators, all of whom are North American based and will be in the short term although looking to set up relations with Japanese/European suppliers. I was rather uneasy with this part of the discussion
Other points:
The $423 warranty provision set up in the last quarter has not been used
Restructuring costs were less than anticipated
At this stage they do not expect the Phase 3 deal announced on June 29 to suffer the same fate as the Cincinatti deal where there were delays in collecting cash as their client was waiting for other parts of the jig saw to be put in place. For the Phase 3 deal they need to have it installed ASAP and are aiming for the first calendar quarter of 08.
There was a discussion of the biomass market. There are 2 distinct markets=the land fill market which is more North American than European and the anaerobic market, where according to the EPA there are 7000 potential plants in North America.
Not much said on the hydrogen-this is the third phase of a deal with Exxon running since 2003.... incidentally no mention in the conference call on their H3100/3200 lines.
Where does this leave us?
Still a lot of imponderables- H 6200 and their seeming inability to turn their good order book into profit-especially when they do have a stretched supply chain. I suppose at 40p to buy worth a punt but my enthusiasm has cooled somewhat in the last months.
.

[cwilliamham] 27/7/2007 17:25

the share price not responding to the new orders. Will need to wait until market calms down perhaps.

[cerrito] 29/6/2007 08:24

an important order today as it represents more than a third of last yea's revenues and is due to be completed within the year.
I hope they do not have the same delays with this order as they have had with the Cincinatti order..see 40.

[cerrito] 01/6/2007 08:06

Good to see that the H6200 has been shipped..in my 40 there was a slip of the pen and I should have said shipped rather than installed.
However the installation and testing will be key so we will need to wait till probablty September before we know if it really works

[keyno] 15/5/2007 09:48

Thanks again Cerrito for your posting. Couldn't agree with your more concerning your last para and risks involved - I am sitting on a similar share bought and topped up on years ago that sounds fine in theory but - I am still waiting for the reward! Will stick with QAR though for time being and like you will not be adding at this stage.

Agree 18 months sounds OK - let's just hope they are not being too optimistic on that one.

[cerrito] 12/5/2007 08:40

Notes from the Conference Call
Much of the questioning in the conference call was on the continued delays for the H6200's and the run up in costs. Repeated that they cannot predict when installation will take place but should be at the end of may.
They have assumed they will not be able to get damages from the supplier because of the mad assembly of the equipment; commented that suppliers to the oil and gas industry are in control and can decide who to business with and the relationship that Exxon has with this supplier does not cut much ice. Emphasized that there have been a lot of QAR people on the supplier's site and hence the extra expenses.
Discussed the contingency established for the warranty; while it is obvious that warranty costs are more relevant for new equipment of a large scale, I did not get clarity as top why this contingency was not required a quarter ago.
Discussed the quarter end $7.5b backlog- the biggest ever and how this was caused by equipment being on customer's site but not commissioned. In the Cincinnati land fill deal, QAR had done its bit but was waiting for other suppliers to deliver equipment so that all tests could be made.
Generally upbeat on the methane purification market and thought that the hydrogen recovery equipment sale to a Texas petrochemical(the old equipment had come to the end of its life) was important as it set up reference points for further sales.
Generally they are now bidding on bigger ticket items than they used to in the past.
Overall the decline in share price was to be expected. I have no desire to add until such time as we see progress with the H6200 but I take comfort from the statement that they have cash for 18 months.
On another point shews the risks in investing in green/save the planet companies as was also seen in Friday's news from Mercury Recycling where the cause was delay in implementing legislation.

[keyno] 12/2/2007 16:40

Cerrito:
Many thanks for taking the trouble to post the above.

[cerrito] 08/2/2007 23:11

I listened to the Conference call but did not ask a question. As I only started buying in December still getting myself up to speed.
Decided that I have as many as I want for now; but as and when they get concrete news that the H6200 has been installed the shares should motor. Anticipated cash burn for this year is somewhat off putting even though they have enough cash. At the same time feel little downside risk

A good deal talking about the various delays of H 6200, and indeed the thrust of the questions from Cannacord and Edison were on this.( I assume as there was an Edison analyst Edison will start to cover). This reflects the importance of H6200 for the company and also how the timetable for the installation of the prototype had slipped so much.
The Houston based supplier was approved by Exxon; two issues in the delay. The first is that the whole industry is so busy and all jobs delayed and the second is company specific. Suffice it to say that both QAR and Exxon have people on site with the supplier expediting things. This delay is bringing in extra costs which Exxon will not pay for.Exxon and the refinery in Europe which will host the prototype are ready.. Should be shipped mid april and installed/commissioned early q3 as I understood it. Confirmed that once the H6200 is up and running, the pioneer refineries will get a good deal as they will need to move on with their marketing.
The revenue guidance of C$9/10m and cash flow burn of $C7/8m confirmed.
Comment that first quarter gross margin was lower because fewer sales of high margin engineering services and also the H 6200 prototype is being done at zero margin.
Seemed confident on other lines..ie now been around for some time...getting a reputation...widening both the industries and the countries they are selling to..mentioned that apart from H6200 had excellent record in shipping on time and on budget-which is indeed a key component of the bonus setting formula.

[asparks] 07/2/2007 11:12

strange there is no reaction to the RNS.....?

[keyno] 07/2/2007 09:07

There seems a very positive tone to these results but you would expect that and I am no figure wizard. Anybody out there who is able to look at these numbers and give an assessment? Thanks.

[mikehardman] 05/2/2007 09:07

very useful deal today; could easily pave the way for more such deals in California (and elsewhere)

[keyno] 19/1/2007 15:21

Cerrito
I agree with you re the lack of interest generally, which is partly why I have now bought in after watching this share for some time, but all good things come to s/he who waits - sometimes!

According to QAR's website it is the CEO who is the Rhodes Scholar.

[cerrito] 19/1/2007 13:20

Keyno
I bought in just after the Dec 6 Finals publication and have been a bit surprised at the lack of interest on this board and more relevant in the market with the lack of reaction to the three peices of solid news since Dec 6.
As I am UK based I would have preferred to have the AGM in London to see the eyeballs of management but can understand why it is in B Colombia
I need to write up my notes on this..I think(buy may be wrong) that it shares one feature with another of my holdings-CWR- in having a Rhodes scholar Canadian as as a CEO.