React Energy Share Discussion Threads

[troutisout] 14/4/2014 21:27

Just looked at the website today and it looks to be updated and offers more information,

This is the one we want to see,

"Financial close is targeted for Q2 2014 with the project expected to be commissioned in Q2 2015 with full takeover in Q4 2015. Once operational the project is forecast to generate c.Stg£10m in turnover with c.Stg£6m in EBITDA."

However, the smaller projects will be adding MW to the production as they start to come online.

Trout.

[troutisout] 14/4/2014 21:18

GGES,
The RNS states that the assets being acquired turned over £290,000 in the year up to 31st March 2013, now that was over a year ago and it looks like Kimbolton School was brought into operation since then. Also the Culford and Old Buckenham schools look part of the Equitix JV and are therefore only 30% owned, whereas Kimbolton although smaller is 100% owned.

Now I think there is something a little naughty here, does the £290k turnover include the 70% Equitix holding or is it just the 30% share owned by GGES, I think the former and so why it is a little naughty.

However there are plenty of projects to be completed this year (Culford School this quarter and another one for Staffordshire County Council ready to go) and a huge target market for Heat Supply Agreements with schools, hospitals, country house hotels and other large buildings. This looks to be all the better with Renewable Heat Incentives to boost the income from the HSAs.

Trout.

[troutisout] 14/4/2014 20:16

So with the above in mind, I have started to look again at the projects that are now producing.
Pluckanes a 0.8MW wind turbine.
Cost of £1.4m in total, £1.12m was from AIB and will be paid back in even payments over 60 months.
They have signed a 15 year PPA, I have looked at the feed in tariffs for Eire and REFIT 2 gives onshore Wind €71.66 MW/h feed in tariff, plus a balancing payment of €9.90 on top of the price paid for the electricity.
I have looked at some figures and they suggested with a wind turbine of 1MW, half of the capacity for an hourly rate and only for half the hours (so 12 hours), so 0.5MW/hr for 12 hours = 6MW/hrs per day. They were working on £100 per MW/hr, it is slightly different in Ireland.

We have 0.8MW, so on the same basis 4.8MW/hrs a day.

4.8MW/hrs x €82 = €393.6 per day.
30 days x €393.6 = €11,808 per month.

From the results we can see the three months at the end of 2013 gave revenues of €36k from Pluckanes, so €12k per month.

Both figures seem to balance, however I feel there may be more from Pluckanes as they may have started slowly when commissioning the turbine and the payments over 60 months to AIB would be about €18.6k plus interest a month.


Finally if they pay off AIB in 5years we then have 10years left of the PPA at €144k per annum.

Just looking at the other wind turbines that are getting close to construction we can see the way this can roll up into a bigger package. As they start off they will be paying back the financing first but the value like in 'buy to let' properties grows as the mortgage gets paid off and the income grows alongside the asset value owned by the Company.

Trout.

[troutisout] 14/4/2014 19:05

Well I have been catching up on recent developments.

The RNS on the Reforce deferred share payment was interesting, basically the deferred payment was an amount of shares (not an amount up to a certain value), so in fact the share price has halved since the deal was announced and so the beneficiaries of those shares have received half of the value it was when the deal was struck. Now the acquisition of GGES was done on a share value of 38p, which isn't far off the value of the Reforce deal.
As both acquisitions led to the executives joining REACT, could the second deal being priced at 38p be down to the level at the previous deal?

Also there were a lot of warrants issued back in December 2012 some for the acquisition and others for Directors incentivisation, but they were at 1.6p and that equates to 80p in today's pricing.

All this points to the fact that those in charge are happy with warrants and deals going through at levels much higher than the present price. Could that be that they understand the share price can be moved with a couple of hundred pound sales, that it isn't really a measure of the value of the Company, because the shares are mainly held by Directors and their associates with very few available in the market.

Anyway with the Chairman from FBD, a Director from Reforce and the top guys from GGES coming aboard and also taking up loan notes, it suggests they are al happy with the Company and it's future. They know this business better than you or I.

They aren't great at communicating that with the market, but it is hard when so many things are at early stages and with processes like financing and planning that are prone to lots of delays. It would seem from the Interims that they are getting planning on projects and moving things forward. As these start to come on line and revenues start to be posted then the market will wake up to the prospects here.

DYOR,

Trout.

[ein] 10/4/2014 18:28

Share very depressed now and plenty more shares waiting in the wings, to go?

[stockonomist] 10/4/2014 16:35

Really thought these guys would get their ducks in a row and do some Investor Relations after the name change. Been very disappointing so far. All will and can be forgiven if they pull off Enfield.

[ein] 10/4/2014 16:05

What the hell is happening here, price falling like a stone?

[timbo] 01/4/2014 07:03

1 April 2014 REACT Energy plc("REACT" or the "Group")Reforce Deferred ConsiderationREACT Energy plc (AIM:REAC), the energy infrastructure developer and operator which focuses on the production of clean energy in the UK and Ireland, announces that the conditions in relation to the deferred consideration payable to the previous shareholders of Reforce Energy Limited ("Reforce") have now been satisfied.As announced on the 21 December 2012, the acquisition of Reforce included a maximum deferred consideration of 1,194,743 new ordinary shares* which were to be issued to the former shareholders of Reforce on receipt of planning permission for eight (8) renewable energy projects from Reforce's project pipeline.The Company has been notified that Reforce has successfully met all conditions in relation to the issue of the deferred consideration including planning permission for eight (8) renewable energy projects. In addition to this it has also achieved planning permission for a further two 500kW single wind turbine projects in the last few weeks as set out in the Company's half year results.A company owned and controlled by Mr Steve Dalton, a director of REACT and a former founder shareholder of Reforce has been allotted and issued 482,924 shares, under the terms of the share purchase agreement announced on 21 December 2012. Mr Dalton was appointed a director of REACT on the completion of the acquisition of Reforce in December 2012. Following the issue of the deferred consideration shares, Mr Dalton will hold 689,892 ordinary shares in the Company amounting to 2.33% of the issued share capital together with 68,989 warrants.Application has been made for the admission of 1,194,743 new ordinary shares of EUR0.10 each in REACT to trading on AIM. The new ordinary shares, which will be issued, fully paid, will rank pari passu in all respects with the existing ordinary shares of REACT. Admission of the new ordinary shares to trading on AIM is expected to occur on Friday 4 April 2014.REACT's total issued and voting share capital will comprise 29,617,417 ordinary shares. Shareholders should use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in REACT, under the FCA's Disclosure and Transparency Rules.*Number of shares post share consolidation in December 2013- Ends -

[troutisout] 26/3/2014 07:22

They aren't the easiest to navigate anyway.....

[timbo] 25/3/2014 23:47

Thanks Trout - my only defence is trying to read accounts on an iPhone screen isn't ideal!!!

[troutisout] 25/3/2014 21:28

Timbo,
I am not so sure that is correct, this from the notes,

"Included in revenues arising from sales in the Power Generation segment is EUR105,974 (2012: EUR1,764,791) arising from the sale to a jointly controlled entity, Newry Biomass Limited and EUR36,267 (2012: EURnil) arising from the sale of electricity to Viridian Energy Limited."

Well my take on the results is we are still waiting for more news and they need to be clearer with their information, but they are progressing their plans, albeit slowly.

Watch and wait now, although I would still buy more if and when the right newsflow starts.

Trout.

[timbo] 25/3/2014 12:48

Encouragingly the Pluckanes turnover of £142k came from only 27th Sept onwards which should mean a prorata contribution of about £550k for a full year...

[stockonomist] 25/3/2014 11:40

the deconsolidation of the Newry revenues does not help

The casual observer will see a Company with poor balance sheet and revenues of £0.1m

[colp54] 21/3/2014 10:42

Looks like we still have a pulse...

[colp54] 19/3/2014 11:35

Sigh...Wakey wakey Mr Madden!

[troutisout] 17/3/2014 10:54

LOL!
Don't take too much in the end of 2014 comment, we have seen that before.

However the Plymouth site seems to be moving forward and if it has PP for the industrial use now and that was on the back of React's Biomass power generation being used to produce power for the units and if Fulcrum Energy have got PP for their Power generator there, then it would seem likely REAC will get the green light from planners, just need to wait for the lengthy planning process to take place though.

Trout.

[colp54] 17/3/2014 10:49

Good find.Looks like the race is on between getting the Plymouth site construction ready and the financial close on Enfield!

[troutisout] 17/3/2014 10:24

Information on Plymouth,



The 20 MW plant seems to be a back up facility,

[troutisout] 17/3/2014 10:22

Hi all,

Back from my hols and catching up on a few things.

ryan83, I have seen that you have got a little bored with the speed of progress here, but is that because you might have a more short term investment goal, back in January you suggested RUR as they were awaiting a settlement, that wasn't as good as thought by the BBs and the share price has dropped ever since, CTP has been quite an active share lately mainly on the back of Henderson selling creating an overhang and good buying trying to eat that up.

This is very much a more longer term investment, if anything it is because it relies heavily on many contracts being signed and of course Planning permissions which take time!

However if you are patient this will give a very nice return and with so few shares in issue, is tightly held and therefore susceptible to large movements on small trading volumes.

At the moment there are many things happening and progressing, some may not be progressing as fast as we might like but they are still progressing. The recent acquisition shows they want to grow even more and the pipeline of smaller biomass projects should mean that we get more producing assets in a shorter timeframe.

We will get the Interim results in the next fortnight and I am sure they will update us on the projects, it will be interesting to see if the rest of the loan notes have been subscribed to, if so that gives us a cash cushion and together with the remainder of the £5m facility that GGES has will give us enough cash to progress more projects through the construction phase.

While I was away we have had some small sells take the price down, it seems the volume is no longer there on the offer, as it was, but this morning you could buy up to 15k of shares at 22.1p, over that 23.5p and up to a max of 50k at 24p.

So there is little buying interest.

I have built up a decent stake here now and am tempted to get a few more, however I am aware that this is on at least an 18-24 month timeframe. The projects like Enfield and Plymouth and Newry phase 2 will all be very important to the rise of this Company they are the big fishes while the individual wind and now the GGES projects add some small value, those smaller projects though will all add up to a decent asset base.

DYOR,

Trout.

[ryan83] 11/3/2014 09:14

Trout / Colp - but the company need to show they can deliver something right? If they can come out with a transparent announcement for Newry clearly stating if they are making a profit, what stage they are at etc. Just a lot of hazy announcements so far. I do have a reduced holding as stated but have decided to ignore the shares I do have in blind hope they go up lol. But the appointment of a PR company is progress..........I like the assets, dont trust the BOD, and it seems neither does the market. But that may just provide an oppurtunity - if CTP get to 2p I will be back for a good sized buy. Oh and MCR.....

[troutisout] 07/3/2014 11:47

colp54,

The only problem there, is that the liquidity means there is no way an institution would be able to buy in the market. Also they way they raise funds means the institutions are more likely to buy loan notes or even be part of the project equity funding.
On top of that we have Farmers with a large holding (although now smaller in percentage terms) and now GGES will have a 15% holding with a smaller one for their loan note holder. Directors and the Barretts hold plenty more.

I can't quite work out why there is suddenly all this liquidity on the offer and having a suspicious mind I wonder if FBD might be looking to convert some loan notes??? On Tuesday their holding will be much lower in percentage terms and they could convert some of the loan into shares at this level (10 day average), they were too close to the 30% to do that previously.

Who knows, but I believe with the new PR company, that newsflow will be forthcoming and that we could see Directors and FBD increase their holdings.

Trout.

[colp54] 07/3/2014 11:20

Hi trout

That's a good point about probably contacting the wrong PR company at the wrong time etc and I see that Yellow Jersey is trying to generate some interest in the company - They also seem quite excited that they've generated a few column inches on some obscure Eco trade type websites, although I suspect that'll do little to attract new investors.

I saw that yesterday's RNS was the 4th most read on investigate at the end of the day, but it clearly didn't float any/many boats.

It's the all important AIM sentiment that they need to address to generate some interest. There's lots of competition out there for PI funds and in the probable absence of institutional investors buying in the market, that's their target audience. Until they realise that, and start engaging and delivering etc, I don't really see this doing very much.

I still believe this is a good story and will continue to hold, but they're really making a pig's ear of it at the moment.

[troutisout] 07/3/2014 09:48

Morning all,
Having slept on it and pondered the few other comments here, it is clear that this share is unloved and under the radar.
It is also clear that current shareholders have become disappointed with the progress and succumbed to other shares that are seeing large rises at the moment as the momentum takes them up.

However when I first looked at this, it looked good but wasn't going to be short term, a massive problem was the liquidity and that meant buying or selling in any decent amount was difficult (that has changed at the moment with a large amount being offered as it looks like someone is exiting). So I have continued to add in small tranches as the price flowed and ebbed.

I haven't tried to make contact with the Company as yet and can see that others may have had problems, but I don't know what the problems were or the way they were addressed. What I do believe is that the poster here who tried to get information through AB Church may have picked the worst time to do this and the wrong people,



If his reply came from AB Church then I wouldn't take much from it, perhaps a similar e-mail to the new financial PR consultants might bear more fruit, especially if what they have stated in their release is to be believed.

We have the Interims coming up this month and so we will have an update on Enfield then, but I suspect we may hear about the Enfield financial close before that.

The current offers are very different, 100k at 26p being offered by Barclays, 23k at 25.25p but for 22k only 23.2p, that is a huge difference in spread cost (£450), so if you are looking to buy check out the prices first.

DYOR,

Trout.

[troutisout] 06/3/2014 16:23

Hi all, back home again, still cannot believe the price, just got 13k at 23.4p.

Trout.

[ryan83] 06/3/2014 10:36

I think Colp's basic summation is spot on.

In terms of the 38p share issue for acquisition - doesnt interest me. For all we know they could be overpaying the overall balance to be paid but at a higher shareprice. If the management were any good at looking after shareholders and informing them then sentiment would be better and a better reaction to seemingly good news. As you can tell I'm distinctly unimpressed with management but the assets once delivered are very good. The question is when the hell will they pull their finger out and deliver something! Next 6 months???

Anyway - gl matey and as I said still invested and will add more once a few concerns are allayed.