Versarien Share Discussion Threads

[1retirement] 19/7/2018 15:48

The sheriff of aim doing his best to help out the old pals club?!

[snoopy12] 19/7/2018 15:34

Fair point but he did sell some recently in the bigger scheme of things it sometimes works as the market at the best of times is frickle minded.

[handykart] 19/7/2018 15:34

Who is "cynical bear" ? If he is such an important person "Initiating coverage" why do they not use their real name ?
Calling themselves "Cynical Bear" just sounds like one of the idiots posting on Twitter.

[hew] 19/7/2018 15:32

Only glanced over posts today, but didn't see mention of tweet below. Article interesting, but that it was a Versarien tweet more so for me:

Versarien® plc‏ @versarien
More

WHY ELECTRIC CARS NEED DIFFERENT KINDS OF TYRES
hxxps://www.pirelli.com/global/en-ww/road/why-electric-cars-need-different-kinds-of-tyres …
@versarien @2DTECH #graphene #2dmaterials #EVs #strong #silent #tyres

[graphite bot] 19/7/2018 15:32

Did we not order machinery to go to china
perhaps we have kept it and ramped up our own manufacturing capabilities.
if it is taking China longer to agree Versariens terms it would make sense

[impvesta] 19/7/2018 15:28

jkok1 19 Jul '18 - 14:04 - 22027 of 22059
0 0 0
"Vasilis and Scrutable. Putting various parts of the figures together you have the following: Total VRS Sales £9.024M. Of this AAC itself is £4.60M Carbide is £3.2M and Versarien Technologies is £1.2M. This apparently leaves graphene at £24K which is a number others have picked on. I wonder if some rounding errors have crept into the results to give this figure?"

jkok1 the 24K isn't worth the thin air it has been plucked out of! It is purely a rounding difference arrived at by adding together the figures quoted in round £100Ks (4600K + 3200K + 1200K = 9000K) and comparing that to the more precisely disclosed revenue figure of 9024K.

[dianecarberry] 19/7/2018 15:27

Initiating coverage of Versarian: SELL
By Cynical Bear | Thursday 19 July 2018

If you like this, please share this article using the buttons below

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

I’ve been following darling of the bulletin boards, Versarian (VRS) for some time finding the ever-increasing share price more and more incredulous. I thought I would use today’s results to take a closer look and come up with a considered valuation. In short, this appears to be the in the top 5 most overvalued shares on AIM – get out while the going’s good!

With any business, it is best to start with management and that is where much of the value lies it seems to me with this stock, the CEO, Neill Ricketts. In many ways, he is the perfect AIM CEO; he is very active on Twitter and always keen to get news flow out, preferably with no numbers or names included. Let’s be clear though, that aside, I am unable to find any evidence from his track record that he is able to build a profitable business.

Prior to setting up Versarian, he was head of the ventures arm of Elektron Technology (EKT) until he left there and set up Versarian, taking some of the ideas with him - although I note in today’s results that he appears to have given up on the thermal copper foam that was going to be the company maker back at the beginning. The beauty of running an “advanced engineering materials group” is that you can always go after the next magical golden egg, graphene being the obvious advanced material of choice for now. Again, this makes for a brilliant AIM story.

Looking at today’s numbers, the business states that revenues have increased by 52% to £9 million an and losses before tax have decreased by 27% to £1.6 million. Cash as at 31 March 2018 of £2.3 million.

That only tells part of the story though and one needs to break it down into its various parts to try to get a sense of value. Neill segments the business in two parts. First, there is the Hard Wear and Metallic Products that is predominantly made up of the Total Carbide business that Neill ran at Elektron and that he acquired from it when Versarian came to market in 2013.

Total Carbide was acquired for £2.28 million. It is worth noting that in the year to 31 January 2013, Total Carbide had revenues of £3.8 million and profit of £56,000. Interesting to compare that to this year’s revenues of £3.2 million – doesn’t sound like a great growth story to me.

The second segment, the Graphene and Plastics Product Division, is a bit of a misnomer as pretty much 100% of the revenue in the year has come from the plastics business acquisition of AAC Cyroma. It was acquired in October 2016 for around £2 million when revenues were £4.27 million. These have now ticked up slightly to £4.6 million. The rest of the report is all about graphene and although revenues are limited, there is plenty of information about the various partnerships. But how much are these words worth?

Being generous, I will value the mature businesses at more than double what Neill paid for them, let’s call it £10 million. However, with the current share price still around 127p, that values the graphene side of the business at around £180 million.

The IP for these businesses were acquired for less than £1 million and although there are a whole host of collaborations and partnerships, there is no current evidence of any of these turning into a profitable commercial relationship as yet. Accordingly, at this point, one needs to somehow assess the likelihood of Neill Ricketts translating these deals into cash but I can find nothing in Neill’s past to give me that comfort. Being generous again, I can envisage hope value of say £20-30 million so my conclusion is that I can’t really understand why this share is trading at over 30p!

In addition, further funding will no doubt be required by the end of the year. As I said at the top of this piece, Versarian is the darling of the masses for now but unless real traction is generated on the graphene side soon, gravity will prevail as it always does in due course and shorting at anywhere near the current price looks like free money in the medium term to me. I await the bulletin board and Twitter backlash with interest.

[belo horizonte] 19/7/2018 15:27

The acolytes are out in force. Any dissent with superGrease and you are moderated.Only rappers permitted. On here they try to fill the page. Corbyn would be proud of the clowns. Doesn't change the fact that VRS is possibly the most overbought share on AIM. Seen it before and will no doubt see it again.

[woodpeckers] 19/7/2018 15:25

grabster, I can't imagine VRS allowing them to have any conditions like that! When would 'falter' come in.... far too dangerous from our point of view. Our government backing will I think, mean that though we are 'small fry' we wouldn't need to give in to such demands.

I also think that when companies realise what our products can do we will actually be in the driving seat if Neill handles it the way I think he will... "Ok, so you don't like the terms, fine, there are plenty of your competitors who are prepared to accept that these are the terms..." (I appreciate he may be a 'little' more subtle than that ! :-)

[club sandwich] 19/7/2018 15:24

snoopy - he already owns 15% of the company (with options) - why would he buy more? And if he wants more he'll just grant himself some more options ;-)

[snoopy12] 19/7/2018 15:21

Let us see if NR buys a few shares to give the market the lead. No better person then him putting the stamp.

[grabster] 19/7/2018 15:20

CS - your post crossed with my edit on that very point ;-)

[redstone64] 19/7/2018 15:19

Did anyone else pick up from the Podcast that VRS have just reached the 1 tonne annual capacity and were moving towards the 3 tonnes mentioned in the results? This seems to me that they have already been increasing capacity from the 250kg capacity single machine ordered in December without us being aware? Or was there a hint at this at the investor day?

[club sandwich] 19/7/2018 15:17

"VRS is a fragile tiddler"

not for long, I suspect. Can't see HMG being interested in fragile tiddlers...

[woodpeckers] 19/7/2018 15:05

grabster, I would have thought VRS would want to keep control/ ownership of all machines... if the 'other' company owns them wouldn't that risk them learning a little bit about our recipe? I appreciate that we still have the final 'secret ingredient' to add but as the machines aren't actually that expensive from what I've gathered I would keep ownership in house if I were Neill.

[ewads] 19/7/2018 15:01

FrommRNS 'US expansion targeted through a local sales office in Palo Alto and appointment as inaugural Council Member of the US National Graphene Association'

Is US on the back burner?

[club sandwich] 19/7/2018 14:57

grabster - all sounds very reasonable. My point was that in the future vastly more graphene will need to be produced - wherever, by whoever, however - to meet anticipated demand. 35,000T a year is 96T a day...

[edit] sadly, at that stage I doubt it will still be selling for £1/g ;-)

[woodpeckers] 19/7/2018 14:55

Wonder how long before we hear what was so important that Neill felt he needed to do a return day trip to Madrid the day before results? Great to hear 'All good" re that in the interview.
Intrigued, needing to be fresh for interviews and analysts he surely wouldn't do this unless it was important!

[grabster] 19/7/2018 14:49

CS - I don't expect Versarien to necessarily be funding the supply of machines for the biggest contracts that they win. This is - at present - a tiny company looking to do deals with giant global corporations. To protect themselves, I would expect some of the biggest corporations to be owning the machines, and in some cases to possibly require a jv arrangement not just a supplier arrangement.

[turbocharge] 19/7/2018 14:49

my gut feeling is I need to eat something... :)

[grabster] 19/7/2018 14:43

"..I reckon it has definitely brewed.
there not buying on hope, not there style."

True. But I imagine that any prospective customer considering placing a big order will want to know that production capability already exists to fulfil it.

My gut feeling is that a substantial order for Nanene will materialise and be announced within the next 10-15 weeks.

[club sandwich] 19/7/2018 14:42

20pc

"Andy the major snippet is that the order has been placed for capital equipment for the increase to 3T of Nanene per year, i will say that again 3T of Nanene wow."

that's only a big number in a historical context. If the predictions for graphene demand are anything like right, in say 5-10 years someone (or several someones) will need to be producing that and more *a day* to keep up with demand. 3 x 365 is only 1000. What's the figure for anticipated global demand? 35k T a year?

[1teepee] 19/7/2018 14:41

I just didn't know. Thats great news:)