Thalassa Share Discussion Threads

[masurenguy] 13/9/2016 07:53

NAV at 30/6/16 was 77p per share of which cash constituted 44p per share.

Group results for the 6 months to 30 June 2016 showed revenue of US$5.2m versus US$9.9m in 1H15, a decrease of 47.8%. Revenue from Seismic Operations has been generated from the Spring surveys over the Snorre and Grane fields for Statoil. The additional revenue generated in 2015 from the project with TGS in the Barents Sea and late data sales for the 2014 multi-client data set were not repeated in 2016.

Cost of Sales decreased by 60.8% in 1H16 to US$2.3m (1H15: US$5.7m). Cost of Sales as a proportion of Revenue was 43.3% as compared to 57.8% in 1H15 and 49.9% for the whole of 2015.

Gross profit was US$2.9m, a decrease of 29.9% versus the same period last year of US$4.2m. Gross margin increased by 34.4% to 56.7% from 42.2% in 1H15 and 8.4% from the full year 2015 gross margin of 50.1%.

Administrative expenses for 1H16 were US$2.4m, 9.9% less than 1H15 of US$2.7m. ARL contributed costs of US$0.2m in 1H16 (1H15: US$0.2m).

Operating Profit before depreciation was US$0.5m versus US$1.5m in 1H15 with operating margin at 11.2%, from 15.2% in 1H15. Adjusted Operating Profit before depreciation (excluding R&D costs at ARL) was US$0.7m (1H15: US$1.8m).

Depreciation of US$0.4m (1H15: US$1.1m) reflects depreciation on the Group's equipment, the decrease due to the impact of write downs on equipment made at the end of 2015.

Operating Profit decreased to US$0.1m (1H15 US$0.4m). Adjusted operating Profit was US$0.3m (1H15: US$0.6m).

Net financial income of US$0.8m included foreign exchange gains and interest income in the period partially offset by interest and share option expense (1H15: US$0.1m).

Profit before tax, was US$0.9m versus US$0.5m in 1H15. Adjusted profit before tax was US$1.2m (1H15: US$0.8m).

Tax in the period of US$0.2m incorporates an estimate of the tax liability incurred from the Company's operations across its different regions (1H15 US$0.06m).

Net profit was US$0.8m compared to US$0.4m in 1H15. Adjusted net profit was US$1.0m (1H15: US$0.7m).

Net assets at 30 June 2016 amounted to US$26.4m (1H15: US$39.7m, 2015: US$26.4m) resulting in net assets per share of US$1.17 (GBP0.77) versus US$1.61 (GBP1.02) in 1H15 and US$1.12 (GBP0.79) at 31 December 2015, the decrease across comparative periods largely as a result of the exceptional write downs and the impact on net assets as at 31 December 2015.

The Company had debt of US$0.0m at the period end (1H15: US$0.0m, 2015: US$0.0m).

Trade Receivables was US$5.5m as at 30 June 2016, which has since been received in full.

Cash as at 30 June 2016 was US$13.2m (1H15: US$14.4m, 2015: US$20.3m).

Net cash outflow from operating activities amounted to US$(4.0)m as compared to cash outflow of US$(2.8)m in 1H15. The cash outflow of US$4.0m does not reflect the US$5.5m of outstanding trade receivables at 30 June 2016, all of which was subsequently received.

"WGP took the strategic decision some years ago to invest in technology and focus its efforts on developing opportunities that would be funded out of production budgets rather than exploration; on the basis that the oil production sector is less cyclical and to therefore de-risk the downturns. Hence the focus on Permanent Reservoir Monitoring ("PRM") opportunities. Whilst the market has not grown at a pace that would have been expected, it is clear that oil companies will continue a strategy for Enhanced Oil Recovery ("EOR") in the near to long term future, whilst new exploration is deemed too high risk.

The significance of the Statoil and ConocoPhillips Scandinavia AS ("COPSAS" / "COP") contracts should not, therefore, be underestimated. A typical proprietary marine seismic survey may last 4 weeks, maybe longer in the case of a large multi-client type survey. The contracts that WGP has for PRM activity in the Norwegian Sector are multi-year and multi-survey. The barriers to entry are immense - as the whole premise of PRM is for absolute repeatability and elimination of all variances, wherever possible, on a survey-to-survey basis.

In terms of operational activity, in 1H 2016, WGP completed the sixth surveys for Statoil over Snorre and Grane, now into the third year of the PRM contract. I am happy to report that after a challenging start (deployment of new, bespoke, state of the art equipment) operational performance improvements are now reducing technical downtime and increasing operational productivity. Meanwhile, the Ekofisk PRM contract that was executed in December 2015 for COPSAS saw the final design and procurement stages of the fifth generation Portable Modular Source System ("PMSS(TM) "). The first survey for COPAS is scheduled to commence in September 2016, following assembly, shake down and testing of the equipment.

Whilst the pipeline of new exploration opportunities has all but dried-up, the company continues to receive new PRM enquiries and will remain resolute in securing these and maintaining its lead market position in this sector. As for exploration activity - it's truly a case of keeping one's ear to the ground and avoiding the economic suicide which some in the industry are currently engaged in such that they are losing money at the Gross Margin Level! Whilst we might be trundling along the bottom or near the bottom of the oil price curve, we are unlikely, in our opinion, to see any sustained recovery until mid-2017. By that time, there will have been little or no new exploration activity for 3 years or more. As stockpiles are consumed, and global demand outstrips global supply, there will inevitably be a race for new exploration."

[janeann] 13/9/2016 07:46

Yes certainly an interesting read - would have like some justification for the choice of investments especially LSR

[catswhiskas] 13/9/2016 07:44

Probably a few pence off the share price as well.

[kooba] 13/9/2016 07:41

Sure does!Well that's got it off his chest!

[cockerhoop] 12/9/2016 21:47

I'm sure the Interim Statement in the morning will make interesting reading.....

[kooba] 12/9/2016 21:38

Whose Daniel?Believe big players will look at the underlying value of the actual company against a strategy of securing value through a large minority interest rather than checking the price in a tenner!But for those like myself who think DS (Duncan) knows what he is doing it presents the opportunity of getting into LSR at a discount for what he has had to pay for a seat at the table...and I have started buying a few.A couple of interesting suggestions on the LSR bb worth reading...what price an asset backed play yielding 6% plus in this return starved environment??

[gbill11] 12/9/2016 16:36

Someone should tell Daniel the idea is to buy the shares of a large holder who wants to sell out. That way you can get in at a discount to the prevailing share price. Instead Daniel has bought out a big shareholder who wasn't really wanting to sell. Result is he's paid a big premium and the investment in LSR is showing an immediate loss of 10-15%

[cockerhoop] 12/9/2016 13:58

Slightly off topic here but today's RNS suggests agitating to change the investment policy at LSR (which was selling off the properties with a incentive structure geared for prompt sales) to something else - which conceivably could be less activist?

[kooba] 12/9/2016 08:43

Wouldn't mind if THAL turned into Crystal Amber !!Must be one of the best performing funds this year.DS certainly an activist and looks like he thinks he can extract more value from LSR than the current managements plan...which seems to be being executed ever so slowly.

[jmf69] 12/9/2016 07:49

Maybe we'll get more info in the interims tomorrow?

[cockerhoop] 12/9/2016 07:48

THAL has turned into Crystal Amber overnight!

[masurenguy] 12/9/2016 07:37

12 September 2016
Thalassa Holdings Ltd

Acquisition of ordinary shares in The Local Shopping REIT plc ("LSR")

Further to the announcement on 9 September 2016, Thalassa Holdings Ltd, a holding company currently with subsidiaries in the Energy Services and Defence and Homeland Security Industries is pleased to announce that, on 9 September 2016, it acquired a further 6,225,000 ordinary shares ("LSR Shares") in The Local Shopping REIT plc ("LSR") at an aggregate cost of approximately £2.05m. As a result, the Company is now beneficially interested in 19,093,376 LSR Shares, which represents 23.14% of the issued share capital of LSR. Duncan Soukup, Chairman of Thalassa Holdings Ltd, commented: "Following this further share purchase and the resultant wholesale changes to the shareholder register of LSR, the Board of Thalassa intends to engage with the Chairman of LSR as soon as practicable, with a view to reviewing and changing LSR's investment policy approved in July 2013."

[kooba] 09/9/2016 17:22

LSR has been liquidating since 2013 I'm informed...not sure how hard they are trying and how much the management are sitting on their hands taking fees?maybe there is the prospect of taking control and either executing the liquidation strategy efficiently or looking at better managing the remaining portfolio and extracting further value.I am happy that dd has been done thoroughly and that there are a few lucrative outcomes here.I do except that the company's strategy needs better explaining though and note the int's came out on the 22nd sept last year , so I'm sure we can expect the usually entertaining Chairmans statement giving some incite into plans around that time.

[cockerhoop] 09/9/2016 17:01

Tilts,

He may well have picked up his initial 2m at a lower price, then negotiated the further 10m with a single seller at 34p. You've suggested he was freely able to buy 6m at 33p today after the price rise so 34 appears a bit toppy to me but perhaps he has a plan.

Clearly it does open the possibility of the LSR end game moving forward somewhat.

[tiltonboy] 09/9/2016 16:39

kooba,

Many thanks. This certainly seems more than an aimless punt. There is undoubted value in LSR, and in addition to 43p of assets, it's retained earnings will be in excess of 2p per annum. This is no dud investment, even though it appears to be at odds to its mandate. The key to LSR is unlocking the value, with the current board/managers appearring reluctant for one reason or another to make substantial sales. Hopefully THAL have the key.

[cockerhoop] 09/9/2016 16:12

It was certainly shrewd to sell a big slug of his THAL shareholding at the top of the market to the EBT using a loan provided by THAL, just didn't benefit the shareholders!!

He certainly has a record of being profligate with shareholder cash - EBT loan, country house, bizarre Russian debt writeoff.

Whether buying LSR at 34p when it was recently available at around 25p is shrewd........time will tell.

[kooba] 09/9/2016 15:54

DS is the largest shareholder He lives in Monaco and is a multimillionaire mostly through investing in special situations.He has a history of making money in Thalassa when times were tough post credit crunch by playing the markets.Papua looks like a punt...maybe it will end up a shell for reversal?The LSR investment is obviously more meaning and looking like its growing...I'm am sure there is a game plan and the prospect of a good return on the investment.I'm sure DS will spell out what the plan is after he has bought what he wants to...not many even on advfn tell you how cheap things are when they are still buying!DS is a bit of a maverick but is certainly a shrewd player..can only say if you don't like his style you better leave...though most negative posters seem to have anyway!

[cockerhoop] 09/9/2016 15:17

Not sure there's a coherent game plan Tilton, last Friday he was buying Papua Mining!!

Maybe next Friday he'll be taking your last 350k of PEG :-)

[tiltonboy] 09/9/2016 15:07

Looks like THAL have picked up another 6m shares at 33p. Would love to know what their game plan is.

[skirbell] 09/9/2016 13:12

I also sold out last week as I thought I had invested in an oil services company with an inovative product. It now seems that THAL is actually some form of investment fund and one with a very opaque strategy.

[garbetklb] 09/9/2016 09:24

I don't think LSR is a bad investment - I've had some myself for a while now. And a lot more plausible than last week's mine........
BUT, it's not what THAL is supposed to be about - fine if it's a way of investing the cash balances, but DS should explain the strategy.
I sold out of THAL last week and don't really want to come back to a company run this way. Additionally, I suspect the IHT exemption would be looking shaky now......