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[bones698] 11/10/2024 18:32

The problem are the headaches with producing the discs at volume . Brembo don't have such issues so supplying them is easy unlike sce . Sure teething problems are expected but what sce have been guilty of is being totally inexperienced of manufacturing and not recruited quality personnel early on . That has led to issues throughout the process and even on purchasing the correct equipment for the process . It is beyond teething problems and lols to be a systemic issue ,one created by very poor management .

The product works and is very good and that is why the OEMs want to use it m,however if sce can't supply it they will have to change to brembo regardless . If sce survives they will use them ,if not it's game over for ace and the OEMs will change .

For me the odds of sce surviving are minimal ,they are years away from even achieving break even and the poor management have now created a situation that is almost impossible to recover from .

As for shareholders they have been wiped out pretty much already ,the market and share price say it's likely to fail completely and time keeps moving while sce flounder . I fear the worst possibly around q1 next year could be the end .

I think the new chair was fed BS and had no idea just how bad things were and will now find out for himself . No blame on him even if this fails as he was handed a live grenade .

Wether he can quickly raise capital and completely change their fortunes remains to be seen but the odds are heavily against him at this point .

[bagpuss67] 11/10/2024 13:26

Stinger. There are subsets of 1. Fundraise or Purchase of shares (varying degree of wipe out for equity) . Purchase of business and assets as a going concem from administrator (total wipe out)

[radgimus] 11/10/2024 11:34

There's 4 Companies that make a continuous strand ceramic so beyond the lengthy validation required, dual supply certainly an option.

[the stinger] 11/10/2024 10:58

2 ways to look at this - and only 2..

1. If it’s such a great product and really has £400m of forward orders (and more) and they are nearly there with being able to supply, then someone will either take it over as a bargain or invest at these very low levels for a multi.

2. It’s all been absolute BS from the start. Which if so how the hell did they get away with it and how/why the hell did the big holders invest at 40p/20p/10p.

Soon find out!

[soixanteneufdude] 11/10/2024 09:36

I think the point is that ST's discs are better performing than the chopped ones, so effectively there is no dual supplier alternative. Although lets face it, for the majority of customers who just pose about in their fancy supercars, they really won't know any difference

[bagpuss67] 11/10/2024 09:35

Yes. Having worked with motor vehicle OEMs it would be surprising if they had been idle on a plan B. However I still think actually pushing the button on that would be very unpaletable for them. But there will be a limit of what they will do and it may be that any support they give will be to allow then time to execute plan B or be conditional on an FSP

[tomtrudgian] 11/10/2024 08:53

Good question, Bagpuss67 and I have long thought about that. It seems quite impossible to believe that OEM’s have not, for at least a year, thought hard about dual or single alternative sourcing of discs. The retailing and commercial risks to the OEM’s of either disc poor performance, or the unreliability or expense of SCE’s supply seem too high.

Just how difficult are the changes needed for the OEM’s to change to the chopped Brembo carbon ceramic discs and callipers already available? Just how much more, or quite possibly less, expense would that involve?

And just why should OEM’s consider dual supply at all? Is the offer of marketing a choice of discs commercially viable, however well they work?

Shareholders have not seen the OEM contracts, but the auditors did. If the SEC’s development costs, already paid by the OEM’s, were not refundable (however unlikely), the auditors would never have disallowed them from being treated as SCE income under IFRS 15 rules. SCE were warned about this possibility in the audited accounts in 2022, and the 2022 and 23 accounts had to be restated to comply.

OK that money is in practice lost to the OEMs, but what is the much trumpeted multi-year contract order book £millions actually worth?

[bagpuss67] 11/10/2024 07:04

Bleak inference from share price action though I agree..

[bagpuss67] 11/10/2024 06:43

Bones. Do you think the OEMs are dual sourced on the discs supplied by ST?

[bones698] 10/10/2024 14:48

The funding solution is the issue . The ability to raise capital when in this situation are very limited . There is a very slim chance the OEMs will provide funds and on what scale that will be I doubt would be sufficient to turn it around .
The problems are not quick fixes and ingrained in the company . Lack of experienced staff ,done on the cheap ,no systems in place etc it was ran like a car repair shop from the 70's imo and why I was never comfortable holding. Good luck it's a hail Mary now from here and as said above I think the new chair was led into this without seeing the extent of the issues . Raising 10-15m which is what I think they would need looks nigh on impossible .

Next rns will be interesting

They should have outsourced the lot to a company that can make the discs ,pass on the risk and focused on selling .

2.5m and 3m sell doesn't seem like some big holders are confident tbh
A story of awful management here plain and simple

[major courtenay] 10/10/2024 08:47

If it’s still a listed company after the new chair sorts (if he can) his funding solution, it could be worth a look then for sensible folk, but a pure gamble otherwise.

[the stinger] 10/10/2024 08:47

Will the big holders let it go after £100m spent..

[bagpuss67] 10/10/2024 08:13

Volume dried up.

Non insider bets placed and waiting for the wheel to stop spinning?

Let's hope SCEs wheels don't completely come off...

[fft] 10/10/2024 07:36

Where did you get the info about the kiln from? The extra kiln that was due to be installed in December has been pushed back to mid 2025. Presumably you are talking about a different one. There are quite a few kilns/furnaces. Can you specify which process ? Thanks.

[major courtenay] 10/10/2024 07:35

Insanely I have topped up at these very low levels. I concede it’s probably hope money more than an investment. If there’s a fundraise (without rights issue) current holders will be virtually wiped out.

[the stinger] 10/10/2024 07:28

Majority of big holders still in... you never know..

[soixanteneufdude] 10/10/2024 07:19

Still think this is worth an all or nothing punt at this price if you have any spare cash you don't mine loosing.

Although yes I did say that when these were at 1.5 which is where the majority of my position started unfortunately. Not dumped yet though as it was money I was prepared to loose, and there's always the slim chance this might turn a corner.

Also has to be a takeover target now. The right buyer with some tenacity could turn this into a right little goldmine, if they sacked off this useless overpaid board and got the production issues sorted out.

[bagpuss67] 10/10/2024 07:10

Would be good if that was sorted. Is that what's needed to make the £20m revenue capacity robust (subject to whatever these down stream process issues are)?

[washingmachine] 10/10/2024 06:49

Off line Kiln on final testing

[bagpuss67] 10/10/2024 06:24

It is possible he didn't know the extent of the issues if he was talking to Bundred who seemed to think everything was fine: successful in fact. But I doubt that from what PF has said. He seems like a switched on and previously successful guy.

Having said that. He hasn't bought any shares so his own jury must be out about whether there is any value in the equity. Also I note that Zeus and Cavendish havent reinstated forecasts. So presumably the company is unable to guide them. Furthermore there is no sign of a presentation to shareholders presumably because they can't yet articulate a path to survival.

I still believe there is some chance of equity surviving either through a purchase of the equity (1p?) or by AK negotiating advance payment from major customers and putting a total break on cash out and then hopefully this down stream issue is sorted by year end and they emerge with 85% yield and decent real capacity headroom.

Also, it would be very unwise for them to incur credit and draw down on the capex facility if they did not have a reasonably robust plan to avoid insolvency as they would be at risk of wrongful trading. The bar for this has been lowered a bit by a recent court case. So I assume they have taken advice and are comfortable to continue for now.

Finally. Although not impossible to work through, it would be a complete pain in the backside for the OEMs in particular the largest customer for this to go through an insolvency process.

[bones698] 10/10/2024 06:12

The stinger , pretty much agree and the share price and market seem to think the same . You do have to wonder why the new chair took the position though given it looks a poison chalice . Either he didn't know the extent of the issues here or was brought in to shut up shop .

The problem is the amount of cash they will need to turn it around having spent nearly 20m in the last 9 months and failed to do so miserably .

I think you made the right decision to sell out and save what capital you could no matter how painful that was .

[amanitaangelicus] 09/10/2024 19:47

To be T/o.ed for next to nowt. Useless key directors of course to KP jobs. The Aim circus strikes again.

[amanitaangelicus] 09/10/2024 19:42

To be T/o.ed for next to nowt. Useless key directors of course to KP jobs. The Aim circus strikes again.

[the stinger] 08/10/2024 15:40

I don’t think they’ll save it this time round therefore sold out. Shame on all the jobs though but at the end of the day the BOD have not been open about the state of play and caused the mess.