Redt Energy Share Discussion Threads

[owenski] 28/9/2021 07:35

From a typical clueless punter on the IES thread -

"robertspc127 Sep '21 - 09:39 - 2111 of 2111

No chance of a fundraising IMO. They have to get positive momentum and institutional interest first.
That means new orders otherwise it is going to be a very hard slog waiting for SG milestones. Patience wearing thin"

At odds with the statement the company has made within the results today -

"the Group expects to require additional finance within the next six months, assuming the continued rate of growth"

Even with their increased base opportunities, IES will be loss making for probably another two years, probably longer.

Bit of a gamble buying at the moment as one will be diluted to pay the wage bill.

I wouldn't bet against them having a bright future though, eventually.

[owenski] 03/8/2021 09:08

Cheers Green, you could well be right on that, it's a given they'll need more funds.

There are a couple of background issues here,
a major one is governments actually starting to make plans that use storage as part
of a national policy and not just an occasional show case project,
I really don't get what the hiatus is here as it seems bleeding obvious.

Next, These products are capital expensive and in order to be competitive,
I suspect they're operating on wafer thin to zero gross margin, that needs to change.

They're still at the starting pole commercially.

When they start turning over 100m plus, then they'll likely to be profitable,
but even then, not by much I suspect.

This Lithium fire in Australia may start to work in their favour,
obviously at some point the market will look ahead and may
start accumulating even though the present metrics are disconnected
from the valuation, so it's worth keeping a trading eye on this.

[greenmachine2] 03/8/2021 08:52

Owenski . I am pleased you put your thoughts on this old thread. I often think how much more money will they need from shareholders before they get to long term profitability. My current guess is £50 million.

[owenski] 21/7/2021 08:54

It's always a big red flag when a company that turns over a
piddling sub 1m presents a financial report that's longer than the Bible.

Their cost of sales and admin have ballooned.

It's difficult to even ascertain basics like gross margin.

This is still a company in early stage commercialisation, as such
I can see it'll need funding probably for another couple of years, maybe more.

Frankly it's not worth investing in unless it's a VC fund, it's worth trading though from time to time.

I'd estimate that it could well require a 100m turnover to generate a sustaining profit. That looks to be some years away.

This is why REDt and Avalon joined, both were failing to survive just like most other VRB outfits.

[owenski] 20/7/2021 21:57

As said in above post, cheap gets cheaper.

Problem is, length of time to sell anything and the fact that I think their margins are non existent.

Starting to look just like another iteration of REDt.

They'll have to start doing the rounds for funds again in a few more months, and so the dilution will start again.

[owenski] 30/6/2021 12:11

Always a queue of fools buying these thinking they're being clever,
they will usually be able to buy them at even lower prices.

Shame that most seem unable to analyse a business.

[owenski] 30/6/2021 09:27

Interesting if lengthy read in those results.

Some things that stick out that are the important parts -

They are still having to get their costs of production down in order to drive sales.

They are still up against Lithium competition even if Lithium isn't the best choice for the application.

They are still at early stages of commercialisation.

They stated the need for shareholder patience on their joint project - not an encouraging statement in itself.

It sounds as if they can sell units at a profit now for the first time - but the drive on cost efficiency suggests twofold -
one to be competitive in the market and two, to earn margin profit - I'd suggest currently any margin is probably miniscule.

They have a years worth of operating cash and 11m of sales for the year which will make them loss making.
Therefore, I'll wager they'll need to tap up another £10 - £15m in about March of 2022 -
whether they print shares off to Gamsa at 175 for this remains to be seen, but more dilution will be coming down the tracks.

Still a couple of years, maybe more, before this comes into it's own in my opinion.
It's on my watch list but no rush to buy in unless the technicals demonstrate a short term trade.

The share price likely to drift?

[owenski] 30/6/2021 07:14

Unfortunately, I can see them being loss making for another couple of years.

[owenski] 30/6/2021 06:57

Strange arrangement, their partner could buy the agreed 10% of the company for just over 10m at present instead of the locked in 175p price = c15m.

5m saving.

[owenski] 12/6/2021 14:01

Cheers zingaro, it's nice and quiet here.
I post mostly my own observations as notes to myself about the progress of the business.
No ramping. Just try to keep a realistic and accurate overview.

[zingaro] 12/6/2021 13:51

Owensksi: thanks for the posts. Why do you not post on the IES thread? It would be easier (for me at least).

[owenski] 12/6/2021 13:25

Looking weak, appears no one's buying the story.

As said, this year will be another loss making year and they'll
likely need funds again within a year.

However, if they can show stellar conversion of the pipeline
which I think is likely, then these could well start to attract interest.


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[owenski] 02/6/2021 10:39

So far the same problems exist at IES as it did under it's previous incarnation.

Scale, speed of adoption and cash.

It's looking at potential revenue of 10 - 11m for 2021

Cash burn is at c 13m

thus it's loss making for yet another year.

They're down to 14m cash on the books currently, so they've got a years worth of funds still, not including cash receipts from sales

They are still doing show case installations and the phrase - 'takes time' has been used more than once.

Also, they're still tweaking the kit in order to improve margin, which suggests possible margin weakness and an inability to price upwards in order to make decent returns for the sales - that of course is capped by Lithium price point competition.

Recent partnership is a big plus, also, I cant doubt the gradual adoption of alternatives to Lithium.

If they can convert pipeline potential into meaningful grid scale installation deals, then this should take off.

difficult to price revenue in order to estimate B.E. turnover point, but I wouldn't be surprised if it was 50m maybe higher.

M.cap currently over 135m, so a fair bit of optimism already in the price. Might still take a couple of years but would think this has a bright future.

[danmart2] 19/5/2021 13:47

SP Looks expensive

[owenski] 11/5/2021 07:19

Hmmm, so IES giving away 10% of the company at a future date in return for financial backing as far as I can see.

Still looks to me like this is at an early stage commercialisation, thought they'd moved beyond that using Avalon's V3 model, but it appears not.

Anyway, that explains recent share price weakness - leaky ship.

They need large projects and lots of them to demonstrate that this tech is becoming main stream, as I've often said on here, love it or hate it, Lithium is an entrenched offering and will be hard to dislodge.

[owenski] 21/4/2021 10:40

Haven't looked in for a while, sold when these crossed the 50DMA, looked like it didn't have the momentum I was expecting. Hardly worth my time and effort, hey ho.

There's is a lack of news flow here and these projects appear to be taking longer to convert. And, of course there is always the background pricing problems of the V market plus incumbent Lithium to contest against.

I thought they would've had some news long before now, I'll keep this on my watch list as I'm sure it's day will come.

Meanwhile IES is on over a 100m M.cap even now and is likely to still be loss making.

[owenski] 07/1/2021 19:25

Looking innerestin


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[owenski] 23/12/2020 19:36

greenmachine, Hi

End of the day it's about understanding the business and where it is in it's development cycle, I don't need to post anything really, but it's good to validate ones thinking.

The IES US team seem to be a different breed to the old UK RED team, more commercially oriented and savvy, I have more confidence in them.

In the past I wasn't prepared to keep propping up a wage bill. This time round it seems the money is in part cap-ex for growth delivery, plus maybe a bit of balance sheet solvency proof to customers. The take up and minimum discount speak volumes from the last time when RED raised and was in survival mode.

VRFB's deffo part of the storage firmament and even if a tad premature, it does look like they're worth a foothold with view to upping ones weighting here on proof of delivery.

Might still be a year maybe two before cash flow positive but that gap will probably close, any larger scale commercial project contact uptakes will deffo prove the case here, reckon that's coming.

I'll wager my entry point - already in the money - is better timed than certain posters who probably still need a higher share price just to break even. Probably wont post much anyway, just run the position effectively.

Best wishes to you.

[greenmachine2] 23/12/2020 19:02

Hi Owenski. I have just seen your recent posts on the old RED thread which I normally no longer look at . Thank you for your comments. It is a shame that you can't post on the IES thread. The current valuation after the fund raise certainly very hopeful of sales and growth.

[owenski] 03/12/2020 07:15

Well I thought 10m, as per my previous couple of posts, but it's 20m

A good move, they need to beef up the balance sheet.

175 is a lot different from the previous discount rates, suggests the market believes in the outcome, and the evidence is, IES are starting to deliver.

IES's time looks likely to come.

[owenski] 23/11/2020 08:37

Timed my IES entry well so far.

[owenski] 21/11/2020 11:33

They need to raise again, no doubt about that, however, the news flow and potential deals looks more favourable under the IES US team rather than the old RED team.
Renewables and storage going to be the hot theme at some point for VRF systems and as the TA indicators showed a breakout on Friday, I've taken a starting position.

A future fund raise of maybe 10m is probably going to occur in a now more favourable climate, we shall see.

[owenski] 09/11/2020 09:03

IES

Currently just over 71m shares in issue - post massive consolidation - would be fairly easy to raise 10m or more and not have a massive share base.

I'd say they'll raise again come next year, existing shareholders will get yet another kicking. They don't have enough working cap. to meet the kind of demands they claim to be aiming for.

[owenski] 28/7/2020 11:18

IES, just like REDt, are ticking along in survival mode still needing to prove the concept, they are still at early stage commercialisation.

They have enough capital to deliver on current projects, but to scale the business into the kind that they and the market would require, will take a lot more capital - a whole lot more.

Shareholders will continue to be diluted.

Two cash burning early stage businesses just make for an even larger cash consuming entity.