Q & A – DirectorsTalk Interviews https://www.directorstalkinterviews.com LSE London Stock Exchange PLC Company Interviews Wed, 17 Jul 2019 12:07:31 +0000 en-GB hourly 1 Q&A with Sativa Group PLC: Significant statement by the Health Secretary (NEX:SATI) https://www.directorstalkinterviews.com/qa-with-sativa-group-plc-significant-statement-by-the-health-secretary-nexsati/412788081 Wed, 17 Jul 2019 12:02:44 +0000 https://www.directorstalkinterviews.com/?p=788081 Sativa Group PLC (NEX:SATI) Chief Executive Officer Geremy Thomas caught up with DirectorsTalk for an exclusive interview to discuss their new broker and the significance of the Health Secretary’s recent statement on medicinal cannabis. Q1: Geremy, I see that you have appointed a new broker, is there any significance to this that investors should be ...

This article Q&A with Sativa Group PLC: Significant statement by the Health Secretary (NEX:SATI) was written by DirectorsTalk Interviews.


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Sativa Group PLC (NEX:SATI) Chief Executive Officer Geremy Thomas caught up with DirectorsTalk for an exclusive interview to discuss their new broker and the significance of the Health Secretary’s recent statement on medicinal cannabis.

Q1: Geremy, I see that you have appointed a new broker, is there any significance to this that investors should be aware of?

A1: I think it’s a very significant event for us, we have an ambition to build a very big business in the medicinal cannabis space and Cenkos have shared that vision with us by taking us on as a client.

They’ve published a sector note and they’ve also published a detailed note about the company where there’s a short-term buyer recommendation of 9p and a 12 month target of 15p so we’re very pleased about that.

Q2:  Matt Hancock, the Health Secretary, he made a statement recently about medicinal cannabis. What’s its impact for Sativa Group?

A2: It’s very significant because effectively the government are taking the brakes off by saying that real world data on use of medicinal cannabis can stand as an alternative to long-term clinical trials here which was always going to be pushing back the main price of Sativa which is medicinal cannabis sales.

So, yesterday’s reporting of that was a big boost for us.

This article Q&A with Sativa Group PLC: Significant statement by the Health Secretary (NEX:SATI) was written by DirectorsTalk Interviews.


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Union Jack Oil plc Q&A: Biscathorpe-2 Well (LON:UJO) https://www.directorstalkinterviews.com/union-jack-oil-plc-qa-biscathorpe-2-well-lonujo/412788071 Wed, 17 Jul 2019 11:30:40 +0000 https://www.directorstalkinterviews.com/?p=788071 Union Jack Oil plc (LON:UJO) Executive Chairman David Bramhill caught up with DirectorsTalk for an exclusive interview to discuss the Biscathorpe-2 well and the next steps for the company. Q1: Good news out today for Biscathorpe-2 well, can you just talk us through the highlights there? A1: This is probably one of the strangest wells ...

This article Union Jack Oil plc Q&A: Biscathorpe-2 Well (LON:UJO) was written by DirectorsTalk Interviews.


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Union Jack Oil plc (LON:UJO) Executive Chairman David Bramhill caught up with DirectorsTalk for an exclusive interview to discuss the Biscathorpe-2 well and the next steps for the company.

Q1: Good news out today for Biscathorpe-2 well, can you just talk us through the highlights there?

A1: This is probably one of the strangest wells we’ve ever been involved in because with Egdon a few years on this planning and in February we drilled it and everything looked against us, it really did look like a disaster of a well. As things unfolded and get you all the information, you begin to think hang on a minute, there’s something going on that we don’t know about.

So, we decided, along with Egdon and Montrose, to actually take some rock samples, cuttings from the well and send them up to APT Laboratories and low and beyond, they’ve extracted some good oil from this so this leaves the whole project wide open and expands it as well.

That’s it in a nutshell really, and all very very good. Also, it proves we’re not a one trick pony, everybody knows about West Newton and how good this is but this wouldn’t be far behind it in my opinion.

Q2: You had good news there, there seems to be quite a bit going on, you must be really pleased at the moment?

A2: It makes a change. Remember, we’ve had 3 years of dire luck, and it was dire, you think you’ve cracked it, you go around the corner, you bump into another obstacle. I think Andy Warhol said ’15 minutes of fame’, let’s hope this is longer than 15 minutes but it looks good.

Union Jack Oil is in great shape, of course we are, and people that know me, I’m not very happy very often but I am today, and have been for quite a few weeks, and we’ve got a great team, it all seems to be gelling together.

Q3: What does this mean for the companies involved?

A3: It’s still early days, there’s still maybe 3-4 months of work to get things sorted out on the seismic and plan a new side-track and also see what else we’ve got down there in the Dinantian, all very interesting.

Q4: What are the next steps for Union Jack Oil, what other things are going on at the moment?

A4: We’ve got our first born, Wressle, our discovery which loads 700 barrels a day of oil equivalent, again, we’ve had some dire luck on that on planning, however, we seem to be turning a corner on that one; the appeal, if you heard in November. Not long considering how quickly time passes and Egdon the operators have done everything that the inspector asked for so I’d be highly surprised if this one didn’t go through and that would give us some terrific cash flow.

This article Union Jack Oil plc Q&A: Biscathorpe-2 Well (LON:UJO) was written by DirectorsTalk Interviews.


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Q&A with Applied Graphene Materials PLC: New market opportunities (LON:AGM) https://www.directorstalkinterviews.com/qa-with-applied-graphene-materials-plc-new-market-opportunities-lonagm/412787925 Tue, 16 Jul 2019 11:47:24 +0000 https://www.directorstalkinterviews.com/?p=787925 Applied Graphene Materials plc (LON:AGM) Chief Executive Officer Adrian Potts caught up with DirectorsTalk for an exclusive interview to discuss their two recent announcements, water-based coatings and what’s next for the company. Q1: We’re speaking to you after 2 great announcements from the business earlier this week, you must be very pleased, could you tell ...

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Applied Graphene Materials plc (LON:AGM) Chief Executive Officer Adrian Potts caught up with DirectorsTalk for an exclusive interview to discuss their two recent announcements, water-based coatings and what’s next for the company.

Q1: We’re speaking to you after 2 great announcements from the business earlier this week, you must be very pleased, could you tell us some more about them?

A1: I’m really pleased with both the milestones that we’ve achieved and also very proud of our team and what they’ve achieved in conjunction with both product development and with a specific customer.

So, first of all, we were really pleased to be able to announce this week that one of our customers called Alltimes Coatings, they’re a market leader in the supply of protective coatings specific for building applications so things like roofs and cladding on buildings, they’ve come to market with a new ground-breaking roof coating product that utilises our graphene material.

As you’ll be aware, we manufacturer graphene and we put that into dispersion but then we’re much more than that. We’re able to take that right the way through to the application technology and work closely with customers to really enable our product to be put together that really works for their application.

So, in this case with Alltimes’ superior barrier performance, specifically, so what does that mean in reality? It pushes back the onset of rust formation specific to a roof application and that’s allowed Alltimes to be able to offer an extended guarantee to their customers so from 20 years current to 30 years. By doing that, by significantly increasing that life span of a roofing coating it’s given the end user the ability to reduce their maintenance costs for both building contractors and owners.

This product launch is a result of a very close collaboration between ourselves and the engineers at Alltimes and suffice to say, it’s pretty typical of the type of work that we do in the paint and coatings industry. It takes along time to bring a product to market but the performance that we’re able to achieve far outstrips what the current benchmark would be so typically maybe a 3 or 5 times enhancement to a standard corrosion performance primer.

So, we see significant scope and potential for Applied Graphene Materials in this market as our products come to market with our customers.

Q2: Now, you also announced a new environmentally-driven technology development, what can you tell us about that?

A2: So, number two announcement this week, we’ve brought a lot to completion. So, water-based coatings is an important area for the paint and coatings market and as you’ll be aware, we are front and centre in that sector, we see that as key strategic importance for us in terms of commercial delivery for this business.

Water-based coatings is really driven by a number of things, principally regulatory requirements so reducing the environmental impact of current technology solvent-based coatings. There are health risks associated with that and environmental issue with solvent-based paints, the industry, just generally, has a push to water-based coatings.

The flip side of that is that the performance of those coatings needs a step change to have greater industry relevance so what does that mean? Extending product life, pretty much in the same way that we’ve seen with the Alltimes coating product, so to be able to extend product life and what does that mean? Utilising our graphene products to enable anti-corrosion performance to be improved and one of their key challenges for use of graphene in the paint and coatings sector generally is the ability to incorporate that material in a meaningful way into water-based dispersions and that’s what we’ve cracked.

So, as part of our overarching technology platform development work that we’re doing with our Genable® dispersion technology, we’ve finally got there with water-based dispersions, we’ve filed a patent for our water-based applications.

We’re really excited about what that opens up, there are a number of different areas for both acrylic and epoxy water-based coatings and one of those areas is in the whole work of direct to metal technology. So, as well as primer technology, the ability now to use graphene in one shot coatings that are direct to metal.

Q3: I think you’ve just hinted at it but what’s next for Applied Graphene Materials?

A3: So, it’s all about, for us, continuing customer engagement and really what that is all about. It’s about bringing those customers and the technical engagement that we have with them to a successful conclusion.

These two announcements are just, for us, a really great example of the extensive ongoing work that we’re doing to introduce graphene, to incorporate graphene in a realistic way in customers’ coatings and to bring those through to successful commercial products in the paint and coatings sector.

So, we feel we’re making real progress, particular in this sector, as I said before it’s core to our commercial delivery and I think we’re doing really well. With support from our technical team, the excellence we’re able to bring to customer engagement and the increasing IP that we’re able to generate, I feel that we’re really on the cusp right now, I’m really excited about this to be honest and really look forward to continued success in the coatings sector.

Alltimes, as I mentioned before is just a great milestone for us and looking forward to that being one of many, and the  water-based technology, as we’ve just talked about, opens up new market opportunities for us that we didn’t have previously.

This article Q&A with Applied Graphene Materials PLC: New market opportunities (LON:AGM) was written by DirectorsTalk Interviews.


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Jubilee Metals Group PLC Q&A: Latest project update (LON:JLP) https://www.directorstalkinterviews.com/jubilee-metals-group-plc-qa-latest-project-update-lonjlp/412787770 Mon, 15 Jul 2019 10:05:59 +0000 https://www.directorstalkinterviews.com/?p=787770 Jubilee Metals Group PLC (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss their latest project update, the focus on copper, further growth & what shareholders should look out for in the coming months. Q1: Now, you’ve just released a projects update, can you talk us through the ...

This article Jubilee Metals Group PLC Q&A: Latest project update (LON:JLP) was written by DirectorsTalk Interviews.


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Jubilee Metals Group PLC (LON:JLP) Chief Executive Officer Leon Coetzer caught up with DirectorsTalk for an exclusive interview to discuss their latest project update, the focus on copper, further growth & what shareholders should look out for in the coming months.

Q1: Now, you’ve just released a projects update, can you talk us through the highlights?

A1: We released, earlier this week, the projects update. Of course, this excludes our production update, it really focusses on the projects that we are currently in execution mode. I think what the projects update really highlights is two things:

  • The company continues to add to its current earnings by bringing in further projects online to supplement our earning.
  • It highlights quite nicely is of course, the diversification as we start diversifying our income into other base metals, targeting the zinc side, the vanadium side, Zambia.

As the update highlights also, is that we continue to drive really hard to bring these projects on stream, in time and within the set budget.

Q2: Does this mean there will be a higher focus on copper over the coming months?

A2: I think what it does show is on the one side of course it’s the South African and Zambian, two areas of the business, both starting to grow quite rapidly. I wouldn’t say there’s a higher focus on copper, on base metals side in Zambia but definitely the Zambian growth justifying a very dedicated team and a very dedicated focus.

On the one side, we are bringing on stream further PGM, platinum group projects, quite significantly so, of course, the JV with Northam Platinum coming on stream which doubles our PGM capacity.

Accurately, as you say, the acquisition of the refinery with Glencore through the Sable Zinc refinery, bringing on stream zinc, bringing on stream vanadium and of course, supplementing all of those base metals with the copper line within the Sabre Zinc refinery justifies a very dedicated focus.

In line with that, we have implemented quite a significant dedicated team to sustain and develop that project in Zambia.

Q3: The company has continued to deliver consistent growth in earnings this so far year, I take it we can expect the same for the remainder of the year?

A3: I think what the projects do show, and of course metals have come off slightly, chrome especially from its high prices, is to diversify our earnings and bring on new projects which of course, yes, will continue to support the growth in the company’s earnings.

Q4: What else should we look out for in terms of news flow from Jubilee Metals Group in the coming months?

A4: I think there’s two areas, the one of course is our updates on our projects coming into operational, we have very exciting projects coming on stream both on the PGM side and on the base metals side, the base metals side being a very large project. So, definitely shareholders can look forward to the updates of those projects as they progress.

Also, as we’ve stated before, we are aggressively pursuing further projects and I think shareholders can look forward to update from Jubilee as we start adding to the existing projects and start giving clarity on what the next project pipeline that will supplement further the earnings into the future.

This article Jubilee Metals Group PLC Q&A: Latest project update (LON:JLP) was written by DirectorsTalk Interviews.


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Volta Finance Ltd Q&A with Hardman & Co (LON:VTAS) https://www.directorstalkinterviews.com/volta-finance-ltd-qa-with-hardman-co-lonvtas/412787760 Mon, 15 Jul 2019 07:04:31 +0000 https://www.directorstalkinterviews.com/?p=787760 Volta Finance Ltd (LON:VTAS) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview. Q1: Volta Finance was one of the attendees at your recent forum, and you produced a note on the company highlighting the questions and answers from attending investors. I see the ...

This article Volta Finance Ltd Q&A with Hardman & Co (LON:VTAS) was written by DirectorsTalk Interviews.


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Volta Finance Ltd (LON:VTAS) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview.

Q1: Volta Finance was one of the attendees at your recent forum, and you produced a note on the company highlighting the questions and answers from attending investors. I see the first question was about being a forced seller of assets, which sounds like a read-across from the problems seen at Woodford and H20 What can you tell us about that?

A1: We see minimal read-across from those situations.

First, there is no redemption pressure, as the company has the permanent capital of a closed-ended structure.

Second, there is limited gearing – just over 10% of the fund – and this is structured so it can be repaid over a year; by way of comparison, in the last 12 months, total cash generation from income, natural maturities and sales were close to 40% of the portfolio.

Third, the Board is clearly independent from the manager; it combines extensive experience in the industry with a broad investment company knowledge, and critically has individuals who are not afraid to challenge the manager.

 Fourth, we detailed in our 26 June note on the Manager’s Hardman & Co Forum presentation the extensive and independent verification of asset values; the actual prices they have achieved on asset sales fully verify its accounting approach.

Finally, the company’s platform distribution is not an issue for the company. Lots of reasons here why there is no read-across at all.

Q2: The bias of other questions appeared to be on credit.  Could you comment how VTAS may optimise returns if the expected gentle economic deterioration happens?

A2: Looking forward, AXA IM expects more volatility on credit, and one way to benefit is to invest in CLO equity. Critically, new CLO equity benefits from higher re-investment returns. While this might, at first sight, appear counter-intuitive, the actual market-wide returns from CLO equity issued just before the 2007/08 financial crisis were around twice those issued in the years before.

It is all about balancing higher impairments against higher spreads and picking the right manager to exploit the opportunities.

We discussed downturn scenarios extensively our initiation report in September last year and, more specifically, in our note, Investment opportunities at this point of the cycle, published on 14 January 2019. In summary, we believe the manager has the necessary experience through the cycle and expertise to deliver.

It is worth noting it outperformed the market in generating those higher returns earned from CLOs issued in the financial crisis.

Q3: On credit, we hear a lot about lenders getting squeezed on their security and, especially, so- called cov-lite documentation. How do you see that evolving for them?

A3: Anecdotal evidence from a senior credit executive in a major bank and multiple other sources is that the effective enforceability is weaker than in 2007. For Volta Finance, we need to break up the impact of these changes into the two key credit loss determinants.

First, for a given economic pattern, the probability of default is lower, but, second, the loss in the event of default is higher. At this stage, it is too early to know whether the ultimate economic effect will be different, the company management’s view is that any net impact will be modest. However, we believe investors also need to focus on the sentiment impact. Fewer defaults are better for sentiment than lots of defaults.

As both the company’s NAV and its discount are sensitive to sentiment, in any downside, the extreme sensitivity-driven volatility seen in the past should not recur.

Q4: there were some questions about the relationship with AXA Investment Management. What can you tell us about that?

A4: AXA IM has advantages of scale, risk control, deal access and excellent long-term performance. Axa has a material investment in structured finance, which we believe is a long-term core business to it. For Volta Finance, there are clear conflicts of interest policies and reporting structures in place. Perhaps most critical is the fact that the Board is willing to challenge the manager.

This article Volta Finance Ltd Q&A with Hardman & Co (LON:VTAS) was written by DirectorsTalk Interviews.


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Surface Transforms plc Q&A: New contracts, settlement of claim and the future of the company (LON:SCE) https://www.directorstalkinterviews.com/surface-transforms-plc-qa-new-contracts-settlement-of-claim-and-the-future-of-the-company-lonsce/412787583 Thu, 11 Jul 2019 11:43:53 +0000 https://www.directorstalkinterviews.com/?p=787583 Surface Transforms plc (LON:SCE) Chairman David Bundred caught up with DirectorsTalk for an exclusive interview to discuss the two new contracts, the settlement of a £300,000 claim, announcement of mainstream contracts, further capacity and the future of the company over the next few years. Q1: It’s a long time since we last spoke? A1: Yes, ...

This article Surface Transforms plc Q&A: New contracts, settlement of claim and the future of the company (LON:SCE) was written by DirectorsTalk Interviews.


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Surface Transforms plc (LON:SCE) Chairman David Bundred caught up with DirectorsTalk for an exclusive interview to discuss the two new contracts, the settlement of a £300,000 claim, announcement of mainstream contracts, further capacity and the future of the company over the next few years.

Q1: It’s a long time since we last spoke?

A1: Yes, it’s been too long but I’ve said it before we only announce when we have something meaningful to say and fortunately, last week was one of those occasions.

Q2: So, what was said in the RNS last week?

A2: Well, we said three things.

Firstly, we announced two contract awards, collectively worth more than over £6 million, over the lifetime of the vehicles involved. These combined with previously announced contracts now give us over £8 million in total of revenue visibility for 4 years from January 2020 with more orders to follow from this customer base with spares and potentially, even more new models.

What really pleased us about these contract awards is that it’s new business from an existing customer group. These people who know us, they know our products, they’ve experienced our supply chain competence, it really is a great endorsement.

The second announcement in the RNS was that we said we had amicably settled our claim, which is worth over £300,000 of cash, arising from the delayed start of production on another previously announced contract. It’s been a long saga but we got there.

Finally, we said that are making progress on the bigger high volume, mainstream customers, particularly the German car manufacturer we describe as OEM5.

Q3: What does all this mean for cash and profits?

A3: We’ve already said we expect to be cash positive in mid calendar 2020 which is, of course, before the start of production on these two new contracts.

So, the contracts part of the announcement relates to the securing future profitability after the cash break-even point. In terms of the immediate issue of cash, we’ve already stated we had sufficient cash headroom to get to cash break but clearly the addition of the £300,000 cash before that date strengthens the position further.

Q4: You mentioned OEM5, the central issue with Surface Transforms is surely the lack of contract with big mainstream OEM’s, you describe them as OEM5 and OEM3. Where are you with testing and when are you going to announce a mainstream contract?

A4: There’s two separate answers on the testing.

The testing/engineering on OEM5, it’s as good as finished, technically, there is nothing significant left to prove.

We’ve still got some work to do on OEM3 testing but I can say test results have been encouraging, most encouraging. If we had anything to announce, we would’ve announced it.

In respect to a contract announcement on OEM5, we said in the RNS that we felt we could announce in the near term and that remains the case.

Q5: You haven’t said anything about the progress on the factory.

A5: No, there’s no significance to this, it’s only because our recent statements have been about customers. If you mix product, production, factory announcements with these customer announcements, the RNS’s become too long and you lose messages.

But, as you asked, in summary, the work on the new factory is going well, we’re on target for signing off the new capacity this year

Equally importantly to the additional capacity is, of course, confirming the product cost reductions, many of which were tied to bringing a number of processes in house. Again, this is progressing well and we expect to hit our production cost targets as the capacity is filled.

Q6: So, just talking about capacity, when do you think you’ll need more capacity as you win new orders?

A6: Well, the capacity we’re putting in place, in addition to what we already have, gives us enough capacity for sales of roughly £17 million of sales per year in Knowsley that’s enough for now.

The company’s recurring OEM sales growth starts in January 2020, as I’ve said before, with the contracts we announced last year. The new contract awards I referred to before will be starting production mid-2021 to 2022 so we don’t need new capacity for announced contact awards.

The real question I suppose you’re asking, looking beyond the announced contract awards and thinking about the other opportunities that we talk so much about, we’ve got time and we’ve got floor space to deal with capacity needs as we see further contract awards beyond filling the £17 million.

We need about 18 months to build a new line and our factory in Knowsley, with extra production lines, has floor space to generate more than £50 million of sales.

Q7: How do you see Surface Transforms over the next few years?

A7: Perhaps I can answer your question by thinking reiterating the core messages of the company’s investment proposition.

There’s three issues, the market potential, the position of the key customers and where do we now stand.

Let’s talk firstly about the big picture market background and I make no apologies for this being a repetition of things we’ve said before.

There are only two companies in the world who can manufacture carbon ceramic discs, Surface Transforms and a German/Italian JV called Brembo SGL, there really are no other competitors.

The technical superiority of replacing iron discs with carbon ceramic discs has never been in dispute, lower weight, greater heat dissipation, longer life, no dust etc. The issue has always been about cost, put simply are these advantages worth the extra cost of carbon ceramics? Only customers can decide that.

Even at present, where we are now on that costs/selling price curve, the customers are putting carbon ceramic discs on cars over £60,000, initially drive axle only, and on cars over £100,000 on four wheels. On that current position on the price curve, we can achieve strong margins and our sole competitor has already achieved sales of over £150 million.

If every iron disc on those high end cars was replaced with a carbon ceramic disc, that market would be worth £2 billion, obviously it’s going to take many many years to get to these level of sales, we need to keep our feet on the ground. Think of it this way, Brembo SGL penetration into the iron disc competition is currently only 7.5% of the market available.

Secondly, let’s talk about the customer situation. The customers, who are now taking the carbon ceramics, do not like the current sole supplier monopolistic position of Brembo SGL, they are very keen for competition and want more capacity. Let there be no doubt, they are vigorously supporting us, we’re not naive, they’re vigorously supporting us because we’re the only other game in town.

They will only buy a product that’s been tested, literally to destruction and literally with hundreds of thousands of track and road miles testing. In addition, they’ll only buy when they see a supplier with quality competence, robust supply chains, underlying competitiveness and capacity, they’ll only buy from a good supplier.

So, finally, and this is the key point to answer you r question, where are we against all this well-known background? The key point is, we are now just about, arguably already through though that phase, we are confident with the product, we are cost competitive and our customers like what they see with the quality and supply chain.

We are in discussions with customers whose programmes would ultimately fill the £50 million sales floor-space footprint of Knowsley. We have a superior product that works in the field, we are competitive, we have capacity, we have quality approvals and we have a robust supply chain.

Our potential customers support us, we have our tails up so I hope that answers your question.

This article Surface Transforms plc Q&A: New contracts, settlement of claim and the future of the company (LON:SCE) was written by DirectorsTalk Interviews.


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City of London Investment Group Q&A with Zeus Capital (LON:CLIG) https://www.directorstalkinterviews.com/city-of-london-investment-group-qa-with-zeus-capital-lonclig/412787455 Wed, 10 Jul 2019 08:46:36 +0000 https://www.directorstalkinterviews.com/?p=787455 City of London Investment Group PLC (LON:CLIG) is the topic of conversation when Zeus Capital’s Research Analyst Robin Savage caught up with DirectorsTalk for an exclusive interview. Q1: You have published a research note on City of London Investment Group 8 days after its year end, 30th June, and 8 days before management makes its ...

This article City of London Investment Group Q&A with Zeus Capital (LON:CLIG) was written by DirectorsTalk Interviews.


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City of London Investment Group PLC (LON:CLIG) is the topic of conversation when Zeus Capital’s Research Analyst Robin Savage caught up with DirectorsTalk for an exclusive interview.

Q1: You have published a research note on City of London Investment Group 8 days after its year end, 30th June, and 8 days before management makes its detailed pre-close statement. Why have you published a note before the statement?

A1: At the end of last week CLIG published its group FUM on its website. We observe

  1. CLIG’s FUM rose 2.4% in the 4th quarter to US$ 5,396m which is 3.6% above our forecast
  2. Sterling has weakened, FUM in Sterling is £4,283m which is 6.9% ahead of our forecast

This FUM supports comments management made on 16 April in its IMS, notably

  • CLIG has an active pipeline … particularly in non-emerging market strategies

Higher than forecast FUM and Sterling Weakness on 1 July 2019 suggests consensus forecasts may need to be increased

Q2: What is the outlook for next year?

A2: We will update our P&L forecasts when CLIG’s management and Board have published their view of the outlook on:

a) The “mix” of net inflows and FUM

  • round $4,200m or 78% of FUM is Emerging Market …. Where the market level is similar to last June and the end of March …. but CLIG’s performance been top quartile  over the past month and exceeded the index over the past year.
  • Around $990m or 18% of FUM is in Developed Market and Opportunistic Value strategies … where the market growth been stronger and CLIG’s assets have probably grown by around 50% over the past year

     b) The state of the current “pipeline” on new FUM

  • We note that the CAPACITY for CLIG’s non-Emerging Market strategies is larger than that the Emerging Market strategy
  • We expect non-emerging market net inflows to be materially larger than Emerging Market net inflows

Obviously, Sterling weakness will continue to be positive for CLIG which generates substantial non-Sterling revenues

CLIG has a strong capital position, with over £18m of net cash, which suggests that CLIG can continue to make generous payments to shareholders

c) CLIG, like other asset managers, has high cash conversion …. and minimal capital requirements

d) In February 2019 CLIG Board declared a 13p special dividend which is around £3.3m

Q3: At 420p, the CLIG shares are up 6.1% since 31st March.  How do you see City of London Investment Group shares trading over the next few months and years?

A3: Over the past 5 years, CLIG has delivered its shareholders an attractive and reliable dividend stream generated by a leading Emerging Market investment manager.  

CLIG has also been organically developing a track record in non-emerging market strategies. Its non-emerging market FUM has now reached nearly US$ 1bn … this is a level where many asset allocators, who have been tracking CLIG’s performance, may start allocating new funds.

In our opinion, CLIG current share price reflects the current level of Emerging Markets BUT NOT

a) The growth of Non-Emerging Market FUM, which has developed an impressive track record over the past 5 years

b) CLIG’s final 18p dividend or further special returns

  • The yield on the final dividend alone is 4.3%
  • The prospective yield including the interim dividend is 6.4%, is attractive

This article City of London Investment Group Q&A with Zeus Capital (LON:CLIG) was written by DirectorsTalk Interviews.


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Non-Standard Finance PLC Q&A with Hardman & Co (LON:NSF) https://www.directorstalkinterviews.com/qa-with-hardman-co-non-standard-finance-plc-lonnsf/412786796 Wed, 03 Jul 2019 10:29:03 +0000 https://www.directorstalkinterviews.com/?p=786796 Non-Standard Finance PLC (LON:NSF) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview. Q1: Non-Standard Finance let its highly contested bid for Provident Financial lapse, where does the group go from here? A1: While there has been deafening noise around the lapsed Provident Financial ...

This article Non-Standard Finance PLC Q&A with Hardman & Co (LON:NSF) was written by DirectorsTalk Interviews.


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Non-Standard Finance PLC (LON:NSF) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview.

Q1: Non-Standard Finance let its highly contested bid for Provident Financial lapse, where does the group go from here?

A1: While there has been deafening noise around the lapsed Provident Financial bid, the fundamental outlook for NSF is unchanged.

It still has the market-leading network in unsecured branch-based lending and is number two in guarantor loans, both growing strongly, it is number three in home credit.

The direct costs of the bid were circa .5% of NSF’s market capitalisation and we estimate a further disruption/extra finance effect of 2%-3%. This may be compared with a share price fall of 28%.

Delivery of consensus earnings and franchise growth expectations will be the key to restoring management credibility and reducing the discount to the peer group. The strong growth expected as a standalone entity is unaffected by the lapsed deal and we believe investors should now focus on that.

Q2: If we drill down into those business opportunities, what do you see from the branch based business, Everyday Loans?

A2: We reviewed ELD in our reports ‘Reading the runes: strong controlled growth’, published on 5th December 2018 and ‘Everyday Loans: a heart of gold’, published on 14th May 2018.

In summary, we believe there is a long-term growth opportunity from a business with an excellent, sustainable market position. In particular, for the foreseeable future, the company can:

  1. use technology to deliver an enhanced customer experience and operational efficiency, the opportunities from the latter are designed to enhance the branch face-to-face business model, not replace it;
  2. generate better leads from deeper, broader broker relationships, focused marketing and improving conversion rates; and
  3. iii) expand its branch network, with a long-term potential optimal size of the network of 100-120 branches, compared with 65 at the end of 2018, the network has already added eight new branches with 73 now open).

As a standalone business, it offers:

  1. operational leverage allowing economies of scale, best practice cross-fertilisation, and better control of risk;
  2. earnings stability in macroeconomic downturn as rate increases and increased non-standard demand offset higher impairments; and
  3. limited regulatory risk. As part of the NSF group, it has incremental opportunity from cross-sales.

Q3: And in the Guarantor Loans business?

A3: GLD offers exposure to a structurally growing market and the potential opportunity to continue to take share from the market leader. Guarantor loans offer the potential borrower a much lower cost of finance, which is both more affordable and creates the opportunity to re-build a credit record. The strong growth in recent years is evidence of real demand for such a product. The regulatory and reputational risks of involving a third party in the loan have been known about for many years.

In our initiation on NSF published on 11 November 2016, we noted: “From multiple aspects, including treating customers fairly, good business practice and limiting potential mis-selling compensation claims, the guarantor’s responsibility has to be very clearly outlined before the loan is issued.” We believe this has been firmly embedded in NSF practices.

Q4: Finally, how will Non-Standard Finance generate profit growth in the home collect market which appears to be showing very little structural growth if any?

A4: HCC has opportunities in improving credit and efficiency. Having grown significantly under NSF’s ownership, we view this division as having shifted to become a cash-generating machine, rather than significant growth business.

This article Non-Standard Finance PLC Q&A with Hardman & Co (LON:NSF) was written by DirectorsTalk Interviews.


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Toople PLC Q&A: Settlement of loan & Trading update https://www.directorstalkinterviews.com/toople-plc-qa-settlement-of-loan-trading-update/412786792 Wed, 03 Jul 2019 09:23:32 +0000 https://www.directorstalkinterviews.com/?p=786792 Toople plc (LON:TOOP) Chief Executive Officer Andy Hollingworth caught up with DirectorsTalk for an exclusive interview to discuss the settlement of the David Breith loan, trading update, their sales centre in Durban and whether growth will continue. Q1: A few weeks ago, you announced the settlement of the David Breith loan, can you just talk ...

This article Toople PLC Q&A: Settlement of loan & Trading update was written by DirectorsTalk Interviews.


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Toople plc (LON:TOOP) Chief Executive Officer Andy Hollingworth caught up with DirectorsTalk for an exclusive interview to discuss the settlement of the David Breith loan, trading update, their sales centre in Durban and whether growth will continue.

Q1: A few weeks ago, you announced the settlement of the David Breith loan, can you just talk us through that?

A1: It was an opportunity where obviously we had an outstanding loan since the company floated in June 2016 where Dave Breith had a loan of just over £600,000 in the business and that was for gaining access to the IPR of the Merlin software platform and any sort of debt to the business prior to market flotation.

The terms of the loan were very simple, minimum 3 years, non-interest bearing and then only repayable at a time that the Toople board consider the company in a position to repay that debt.

There was an opportunity to repay debt at a considerable discount and the Board settled that debt at less than 25p in the pound which actually the net result of that was to make the company a debt-free business; we now have no debt in the business whatsoever.

At the same time, we had, from our brokers, an approach for some interesting further TOOP stock that they couldn’t get on the market, we had our permissions as a standard list and we were able  to secure some private placing.

So, we were able to service the debt without affecting the working capital of the business and obviously to enhance the working capital of the business with the placing as well. So, timing was perfect although I would comment that without the private placing, the Board, at less than 25p in the pound in the settlement of the debt, the Board would have elected to cease that opportunity anyway.

Q2: Today you provided the market with a trading update, can you just talk us through the numbers Andy?

A2: Obviously the numbers are very very strong, we’ve previously communicated to the market that we’re growing quite materially and we’d already told the market that we’d achieved over 900 orders in April and subsequent to that, now we’ve achieved over 1,000 orders from customers in May. Just finishing June, as of Friday night, the actual numbers from Friday night was 1,150 orders in June so over 1,100 orders and we then would’ve received more orders online on Saturday and Sunday.

So, if you just look at the main number, of over 1,000 orders, if we compare that to our trading this time last year, as a year-on-year comparison, we’re now bringing in 3.5 times more orders every single month than we did for the same period last year. It represents, as stated, a 250% growth year-on-year comparison.

Q3: The update today, it mentioned that you’ve established a sales centre in Durban n South Africa, what’s the rationale there?

A3: Very simple. The rationale is what we’re seeing from customers is our digital marketing activity that we put out there to create the brand to put different propositions in the marketplace, what we see is a lot of small businesses and a lot of sole traders that want to interact with the company, post 8pm, and indeed on Saturday’s and Sunday’s.

What we can see is that when a customer is interacting because you because our marketing is 100% digital, the real best time to interact with that customer is whilst they’re on their laptop, whilst they’re on their laptop, whilst they’re on their tablet or their mobile. If you leave it for a period and they move on to the next thing then what we’re seeing is customers end up, even though they’ve filled in an enquiry form on the proposition that they’ve seen, some of those customers we never get to contact.

Indeed, if we look at all of the lead generates on a monthly basis and all the enquiries that come in on our digital marketing activity, we convert overall, about 30% of those leads. If you then look at the actual customers that we get to contact, we actually convert over 80% of all of the customers that we actually end up getting in contact with based on their enquiry.

So, what Durban will do is significantly extend our operating hours, post 8pm in the weekdays and on Saturday’s and Sunday’s so that the enquiries already coming in, we’ll convert more of those enquiries. So, our conversion rates will grow because we’re there and we’re available with the customers and we can interact in a real-time basis.

So, we will see an increase in conversion rates over the coming months and what that means is as you increase your conversion rates on the leads that you’re already generating in the marketing budget that we’ve got then you’ll obviously see the net result is the overall reduction in the cost of acquisition of an order or a customer.

So, it’s a good thing from a company perspective and drives a really great interaction with the customer.

Q4: Just going back to the numbers that you mentioned, do you think growth will continue for Toople?

A4: I think certainly. If we look at absolutely the growth month-on-month which we’ve tried be as detailed as possible in the bulletin which shows monthly growth.

Just going back to exactly what I said about the Durban presence, obviously the Durban presence will undoubtedly fuel further growth and fuel further conversion rates so we look forward to the coming months and the next year, with significant confidence.

This article Toople PLC Q&A: Settlement of loan & Trading update was written by DirectorsTalk Interviews.


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Anglo Asian Mining Plc Q&A with Hardman & Co (LON:AAZ) https://www.directorstalkinterviews.com/anglo-asian-mining-plc-qa-with-hardman-co-lonaaz/412786281 Thu, 27 Jun 2019 08:57:10 +0000 https://www.directorstalkinterviews.com/?p=786281 Anglo Asian Mining Plc (LON:AAZ) is the topic of conversation when Hardman and Co’s Analyst Paul Mylchreest caught up with DirectorsTalk for an exclusive interview. Q1: Can you give us an overview of Anglo Asian Mining? A1: The company produces gold, mainly, silver and copper from 4 mines in Lesser Caucasus region of western Azerbaijan. ...

This article Anglo Asian Mining Plc Q&A with Hardman & Co (LON:AAZ) was written by DirectorsTalk Interviews.


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Anglo Asian Mining Plc (LON:AAZ) is the topic of conversation when Hardman and Co’s Analyst Paul Mylchreest caught up with DirectorsTalk for an exclusive interview.

Q1: Can you give us an overview of Anglo Asian Mining?

A1: The company produces gold, mainly, silver and copper from 4 mines in Lesser Caucasus region of western Azerbaijan. Three of the mines are located at its flagship 300 square kilometre Gedabek complex and a fourth is located 50km to the north west.

The company has also invested heavily in downstream processing facilities which include a heap leaching operation, an agitation leaching plant, which cost $45m, and a flotation plant, which allow the company to produce gold dore bars and copper concentrate.

We should emphasise that Azerbaijan is a friendly jurisdiction for the resources sector, although predominantly in oil and gas up to now. The production sharing agreement that AAZ has negotiated with the Government of Azerbaijan is essentially the same as the one BP negotiated for oil and gas.

Senior management is a mixture of Azeri and British nationals and the former have close ties to the Azeri government. The President of Azerbaijan conducted the opening ceremony for the first mine at Gedabek in 2009.

In 2018, the company produced 83,376 gold equivalent ounces, of which about 73,500 oz. was actual gold, paid its maiden dividend and ended the year with net cash on its balance sheet. The production guidance for 2019 is 82,000-86,000 gold equivalent ounces.

Q2: What sets the apart from the average junior mining company?

A2: The vast majority of junior mining company are exploration plays and don’t have any production, whereas AAZ is, obviously, considerably more advanced. Nor does the company need to raise additional capital, certainly for the foreseeable future, if at all.

In terms of financial metrics, the outstanding aspect of the company is its cash generation, which is primarily due to its low-cost production. The company’s all-in sustaining cost, or AISC, per ounce of gold production for FY 2018 was $541, which puts it comfortably in the lowest quartile for the gold mining industry cost curve globally. In terms of the SandP Global Market Intelligence’s projected 2019 cost curve, the company is bordering on the lowest decile.

The main reasons for the low-cost structure are: i) it’s Azerbaijani jurisdiction; ii) predominance of open pit mining; iii) access to the national power grid; iv) modest levels of reinvestment (despite bringing o new mine production, e.g. Ugur); and v) investment in efficient downstream processing facilities.

To give you an indication of their underlying cash generation, the company began 2018 with net debt of $18.1m and ended with year with net cash of $6.1 million.

Q3: Can you outline some of the key investment criteria relating to the company?

A3: I’d make three points in terms of investment criteria:

Firstly, we have calculated a fair value based on a DCF valuation, using a discount rate of 8% and an average gold price of $1,350/oz, of 156 pence per share.

This valuation also includes significant stockpiles of copper and gold in ore and in the tailings dam, which amount to 87,000 oz. of gold and 10,900 tonnes of copper. While the company cautions that it’s got more work to do on establishing the route to extract this metal, we are assuming fairly modest recovery levels of 46% for gold and 60% for copper.

Secondly, we mentioned the company’s cash generation, which is prodigious. We estimate that during the seven years from 2019-25, the annual free cash flow, defined as net income + depreciation and amortisation – capital expenditure, will average $27.7 million. The average free cash flow yield, i.e. dividing that figure by the market cap., is 16.2%.

We also estimate that the aggregate free cash flow generation during this period will be in excess of the stock’s current market capitalisation. Obviously, if AAZ doesn’t find some attractive new mines to invest in, the company will need to significantly increase its pay-out ratio, which is currently set at 25%.

Lastly, the company paid a dividend of $0.07/share in 2018 and we expect a similar payment in 2019 which implies a dividend yield of 4.7%.

Q4: Your financial model for the company doesn’t currently look beyond 2025, can you explain why?

A4: We are currently assuming that they produce between 80-90,000 gold equivalent ounces in each of the next seven years to 2025.

We have been very conservative in our estimates at this point. Our 2019-25 production estimates are confined to the 482,000 oz. of remaining Proved and Probable gold reserves, and related silver and copper, for the Gedabek open pit mine and the three other mines at Gadir, Ugur and Gosha.

This excludes an additional 553,000 oz. of Measured and Indicated gold resources and additional silver and copper. While the confidence level of Measured and Indicated resources is slightly lower than reserves, we would emphasise that Measured and Indicated resources are typically enough on which junior mining companies will base a mine plan.

Secondly, we are also not assuming anything either before or after 2025 for the potential for mining at the Gedabek open pit to transition to an underground mining operation in the next few years. Nor are we assuming any upward revisions to reserves and resources from ongoing exploration work at the three other mine sites.

Q5: At this stage, how do you assess Anglo Asian Mining’s prospects beyond 2025?

A5: We think that it is highly likely that the company’s production will continue well beyond our current 2025 forecast horizon.  There is the potential for an underground mine at Gedabek and the exploration work during 2017-18 has already identified a down dip in the ore body from below the Gedabek open pit towards the nearby Gadir underground mine.

Secondly, we believe that the Gedabek- Gadir area could be part of a much bigger porphyry-epithermal system of copper-gold mineralisation.

A bit of geology. AAZ classifies the Gedabek open pit as a high-sulphidation epithermal system and Gadir as a low-sulphidation epithermal system. The largest copper-gold mines in the world are porphyry systems formed from hydrothermal fluids that originate in large magma chambers in ancient volcanoes. High and low-sulphidation epithermal mineralisation often occurs as the upper portion of a larger system which is linked at depth with porphyry mineralisation.

The company’s drilling programme and a recent airborne geo-physical survey have discovered evidence of porphyry mineralisation. The company is ramping up its exploration programme and there is a possibility that the current mines in the Gedabek area are sitting above a larger “system” of copper-gold mineralisation which could be exploited in due course.

If we look at the location of Gedabek from a bigger picture perspective. It lies on the Tethyan Tectonic Belt which stretches from Corsica and Italy in western Europe across two continents to south east Asia. It contains more than 400 significant mineral deposits. Since 1965, more than 80% of discoveries have been copper and/or gold and 19 of them would be classified at ‘Giant’, over six million ounces of gold or five million tonnes of copper.

There’s a lot of exploration work to do in the company years, but there is considerable upside potential.

This article Anglo Asian Mining Plc Q&A with Hardman & Co (LON:AAZ) was written by DirectorsTalk Interviews.


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Hardman & Co Analyst Q&A: RM Secured Direct Lending PLC (LON:RMDL) https://www.directorstalkinterviews.com/hardman-co-analyst-qa-rm-secured-direct-lending-plc-lonrmdl/412786085 Wed, 26 Jun 2019 06:36:44 +0000 https://www.directorstalkinterviews.com/?p=786085 RM Secured Direct Lending PLC (LON:RMDL) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview. Q1: You called your report on RM Secured Direct Lending “Predictable revenue streams generating high yield”, why? A1: In a world when the market is desperate for yield, we ...

This article Hardman & Co Analyst Q&A: RM Secured Direct Lending PLC (LON:RMDL) was written by DirectorsTalk Interviews.


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RM Secured Direct Lending PLC (LON:RMDL) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview.

Q1: You called your report on RM Secured Direct Lending “Predictable revenue streams generating high yield”, why?

A1: In a world when the market is desperate for yield, we believe it is really important to understand how that dividend is generated.

RM Secured Direct Lending offers investors an ongoing ca.6.5% dividend yield, whose sustainability is supported by multi-year assets, a rising revenue yield and economies of scale. Credit, we believe, is well controlled, and we provide readers in our report a detailed review of its assessment, monitoring and recovery. We believe the gearing level is appropriate, the investment manager’s interests are aligned to shareholders, and that any discount will be actively managed.

Like any lender, there are risks when the cycle turns; also, RMDL has some junior debt positions, and its book has shown a propensity to turn over, which in the future could see more external refinancing.

Q2: RMDL is a lender, could you tell us more about its strategy?

A2: RMDL is operating in a part of the market where competition is moderate. High-street banks have significantly withdrawn from non-standard lending, and the size of RMDL’s participation, £2 million to £10 million plus, is too small for many corporate lenders/capital market investors looking to structure complex deals.

RMDL can thus charge for intellectual capital, and its permanent capital structure means it can also exploit illiquidity premiums.

Q3: You have previously highlighted how important credit management is, can you outline what RMDL does there?

A3: Credit risk management is core to any lender. We conclude that credit at RMDL is well controlled, significantly reducing the risk that impairments will put the dividend under pressure.

In particular, we note: i) robust credit assessment with appropriate measures specific to the bespoke nature of the clients; ii) the benefits from control post draw-down; iii) the value of security; and iv) the diversification of the portfolio.

Credit risk management is about limiting the probability of default and reducing any loss in the event of default. RMDL’s procedures appear well positioned to do both and, to date, there have been no major loss incidences.

Q4: You touched on manager alignment with shareholders, what is RMDL doing differently from peers?

A4: RMDL has agreed with the investment manager that half its fees are used to buy shares that will then be locked in for 12 months. The shares are bought in the market, or could be issued at NAV, quarterly in arrears.

With a holding of 961k shares, ca. £1million, we believe this generates a significant alignment between the investment manager’s interest and shareholders. While the lock-in is for a year, the programme was committed until December 2019, i.e. three years after RMDL launched. This appears a reasonable balance between allowing the investment manager access to cash for its own business needs and ensuring that it will be on risk should performance disappoint.

Q5: What is RM Secured Direct Lending doing to manage the discount?

A5: RMDL is trading at premium to NAV so its discount management is about limiting any prospective downside rather than action today. It has a number of discount management policies in place to limit any downside, in particular a buy-back programme should the discount hit 6% and a liquidity event at NAV (less costs) at year four. Having such policies may, of course, prevent the discount ever reaching 6%, as the market will expect the company to be a buyer at that level.

This article Hardman & Co Analyst Q&A: RM Secured Direct Lending PLC (LON:RMDL) was written by DirectorsTalk Interviews.


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Morses Club PLC Q&A with Hardman & Co’s Mark Thomas (LON:MCL) https://www.directorstalkinterviews.com/morses-club-plc-qa-with-hardman-cos-mark-thomas-lonmcl/412785925 Mon, 24 Jun 2019 11:03:37 +0000 https://www.directorstalkinterviews.com/?p=785925 Morses Club PLC (LON:MCL) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview. Q1: What did you take away from Morses Club’s recent results? A1: We took two key messages from the FY19 results announced on 2nd May. First, the core business is now ...

This article Morses Club PLC Q&A with Hardman & Co’s Mark Thomas (LON:MCL) was written by DirectorsTalk Interviews.


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Morses Club PLC (LON:MCL) is the topic of conversation when Hardman and Co’s Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview.

Q1: What did you take away from Morses Club’s recent results?

A1: We took two key messages from the FY19 results announced on 2nd May. First, the core business is now in a reliable, steady state with modest organic volume growth. It should, however, generate profit growth from acquisition opportunities and technology-driven efficiency improvements. As always, the agents remain core to the group but incremental returns can be generated from managing them better. Conservatively managed growth is being driven from the new business lines. Management has indicated it expects FY22 pre-tax profits of between £3 million and £5 million from its recent online lending acquisition where the price paid was just £8.5m.

Q2: Can you give us some detail on the numbers?

A2: Looking through the accounting noise, revenue was up 6%, credit issued by 2.4%, and the net loan book by 6%. Efficiency improved with adjusted pre-tax profits up 14.6%. Impairments remained well controlled (22.4% of revenue, like-for-like FY’18, 22.5%). Customer numbers increased by 3% to 235k.

The CTL deal could introduce some noise, both real and accounting. It will transform the profit and loss account, being a lower-cost but higher-impairments business than home collect. Although FY’19 was a beat against our forecasts, we have at this stage left our FY’20 forecast EPS largely unchanged.

Q3: The CTL acquisition was clearly important, what did management say about it?

A3: CTL transforms the company’s online capability, it was bought out from a bigger group which has gone into administration because of problems in its completely separate payday division. So, none of the problems were bought in the deal but the business had been affected as previous management focussed on the problem areas and in the transition to new IT platforms.

Management outlined the objectives for CTL as: i) to deliver breakeven on a monthly basis by the end of FY20; ii) to generate profits into FY21, such that there is a positive return after the cost of funding off the back of ca.200k short-term loans p.a., 50k customers on acquisition February 2019; and iii) to deliver a profit before interest and tax from FY’22 and beyond of between £3m and £5m. We note this compared with FY’19 pre-interest profits of £23.7m.

Q4: Management are highlighting use of technology, what did you think about it?

A4: Unlike PFG, Morses Club has been clear that the agent remains the core of the business model, this does not mean, though, that the agent practices have to remain static.

Technology means that the administration side of the business can be significantly automated while still having a close personal relationship between agent and customer. Some of the benefits include firstly automated reporting reducing error rates and need for manager time to be spent on correcting errors.

Second, collections are being made through the portal via customer action rather than the agent visiting the customer’s home, MCL advised that 20% of the traffic on its portal was customers making repayments. An agent can service more customers if they visit fortnightly rather than weekly. To still be treated as home collect for regulatory purposes, the customer must have the option of collections being made at home. Such automated payments may see administration benefits, especially as customers are drawing down their loans in non-cash ways. MCL is clear that the agents will still visit but just less frequently.

This article Morses Club PLC Q&A with Hardman & Co’s Mark Thomas (LON:MCL) was written by DirectorsTalk Interviews.


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Zenith Energy Ltd CEO Q&A with Andrea Cattaneo (LON:ZEN) https://www.directorstalkinterviews.com/qa-with-zenith-energy-ltd-ceo-andrea-cattaneo-lonzen/412785772 Fri, 21 Jun 2019 09:02:48 +0000 https://www.directorstalkinterviews.com/?p=785772 Zenith Energy Ltd (LON:ZEN) Chief Executive Officer Andrea Cattaneo caught up with DirectorsTalk for an exclusive interview to discuss drilling at the Jafarli field, the importance of a top drive and the key things investors can expect for the rest of the year. Q1: Can you give us an update on when Zenith Energy plan ...

This article Zenith Energy Ltd CEO Q&A with Andrea Cattaneo (LON:ZEN) was written by DirectorsTalk Interviews.


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Zenith Energy Ltd (LON:ZEN) Chief Executive Officer Andrea Cattaneo caught up with DirectorsTalk for an exclusive interview to discuss drilling at the Jafarli field, the importance of a top drive and the key things investors can expect for the rest of the year.

Q1: Can you give us an update on when Zenith Energy plan to start drilling at the Jafarli Field in Azerbaijan?

A1: As you know, the start of the drilling is imminent, just a question to finalise certain missing  items which are arriving in the country as per our communication presently, they are still clearing transportation and customs final steps.

When these items are in the worksite, we will make the usual video and communications so the investors will be informed.

Q2: Can you expand on the importance of a ‘top drive’ in the drilling process and when you expect this to actually arrive?

A2: So, as per arrival, we just said that these final missing items are including the top drive which is the main one and this is clearing customs and then being delivered from customs to the site.

Point one of the importance, that you asked me, about the top drive is due to the fact that as our investors know, we are drilling our depths between 2,500 and 4,500 in this field; Murkadkhanli, Jafarli and Zardab and so the importance was to have a top drive rather than a normal rotary table because it adjusts sensibility and the finesse is our drilling process.

So, that has been the origin of capital raise that we use exclusively to pay this equipment and the importance is that after so much waiting and starting, we want to execute the drilling process at best.

Q3: What are the key things now that investors can expect from Zenith Energy Ltd in the rest of 2019?

A3: I think that the investors can expect a lot from the main item of success of this year which has been the purchase of the rig. I can’t say enough times to the investors that this is the future that distinguishes Zenith from its peers, very few companies have the internal ability to drill owning a rig, we have.

Of course, owning the rig, the most natural thing would be to drill, to drill, to drill, the only analogies would be where and how deep and in which field and of course, these would be the variety of technical choice we made.

What the investors should know and be very confident about is the ability to drill in a field that has reserves of, for our portion, 32 million barrels excluding, because they’ve not yet been recorded, the reserve of Zardab. So, this reserve has additional news that will be assessed and disclose din due course.

So, there is a lot of oil and then the ability now with our own rig to drill it and bring it to production.

This article Zenith Energy Ltd CEO Q&A with Andrea Cattaneo (LON:ZEN) was written by DirectorsTalk Interviews.


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Reabold Resources PLC Q&A with Co CEO Sachin Oza (LON:RBD) https://www.directorstalkinterviews.com/reabold-resources-plc-qa-update-on-west-newton-a-2-mica-1-lonrbd/412785620 Thu, 20 Jun 2019 10:16:58 +0000 https://www.directorstalkinterviews.com/?p=785620 Reabold Resources PLC (LON:RBD) Co Chief Executive Officer Sachin Oza caught up with DirectorsTalk for an exclusive interview to discuss the West Newton A-2 appraisal well and provides an update on Mica-1 in Romania. Q1: A few announcements this week, firstly the West Newton A2 appraisal well. Sachin, can you tell us about this news? ...

This article Reabold Resources PLC Q&A with Co CEO Sachin Oza (LON:RBD) was written by DirectorsTalk Interviews.


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Reabold Resources PLC (LON:RBD) Co Chief Executive Officer Sachin Oza caught up with DirectorsTalk for an exclusive interview to discuss the West Newton A-2 appraisal well and provides an update on Mica-1 in Romania.

Q1: A few announcements this week, firstly the West Newton A2 appraisal well. Sachin, can you tell us about this news?

A1: So, the West Newton A-2 appraisal well successfully appraised, it was the primary Kirkham Abbey formation that was first discovered in 2013 with the West Newton A-1 well and this is in East Yorkshire, close to Hull.

The A-2 well results correlated very favourably with that original A-1 and reservoir characteristics including things like net pay exceeded our expectations as well as the presence of liquids. So, the original Competent Person’s Report that indicated a 2C Contingent Resource of 189 Bcfe of gas equivalent is very well supported as it the project NPV of $207 million.

It’s important to highlight just what the scale of this accumulation is as it is potentially the largest ever onshore UK gas field and one of the largest ever hydrocarbon accumulation onshore UK.

For all of these reasons, it’s a very exciting project.

Q2: Why is it so exciting for Reabold Resources?

A2: Our exposure to this project is in effective 24% economic interest through its 36% equity holding in Rathlin, the operator of the licence area, so clearly with those types of economics and that scale our exposure makes West Newton highly significant for our shareholders.

Q3: We are the next steps for the project?

A3: The immediate next steps in Q3 would be to test the well by way of an extended well test and that’s to give an idea of what the flow rates are going to be from this well and we very much look forward to that.

We would then plan to drill a well from the West Newton B site, that fully permitted, and that’s to appraise the Kirkham Abbey formation but it’s also to test the optimal place to test the Cadeby formation. The Cadeby is an oil target which had oil shows both in the A-1 and the A-2 and this Cadeby oil potential could be even larger than the Kirkham Abbey but needs to be properly evaluated by this B well.

Q4: We also saw an Operations Update at Mica-1 in Romania, can you talk us through the highlights?

A4: Through Danube Petroleum, the company is exposed to a drilling campaign in Romania.

The IM-1 well, and we believe one of the lowest risk pre-drill wells that we’ve got, will be commencing shortly as was announced in the update. The permits are all in place, construction is just beginning for that programme and we look forward to the drilling results of IM-1.

It’s worthwhile saying we also have fully permitted the IM-2 well and after the results of the IM-1 well, RBD are able, at low cost, to increase its exposure to Danube Petroleum and also allow the funding of that IM-2 well.

So, we look forward to the campaign and very excited by it.

Q5: What’s the forward plan there for Reabold Resources PLC?

A5: Initially, as I was saying, it the drilling of these two wells and what we are essentially doing is re-drilling gas discoveries from this appraisal programme. These gas discoveries can be put into production relatively quickly because of nearby infrastructure and a nearby gas processing facility that has spare capacity.

The ability to tie in these discoveries into that gas processing facility and allow us to start monetising the discoveries that we hope to be making means that we can start bootstrapping our way to start exploring throughout the rest of the license area which has a significant amount of potential beyond the next two appraisal wells.

This article Reabold Resources PLC Q&A with Co CEO Sachin Oza (LON:RBD) was written by DirectorsTalk Interviews.


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OnTheMarket plc Q&A: Full year results (LON:OTMP) https://www.directorstalkinterviews.com/onthemarket-plc-qa-full-year-results-lonotmp/412785206 Mon, 17 Jun 2019 11:14:55 +0000 https://www.directorstalkinterviews.com/?p=785206 OnTheMarket plc (LON:OTMP) Chief Executive Officer Ian Springett caught up with DirectorsTalk for an exclusive interview to discuss the key take-outs from their full year results, creating value for agents, converting trial agents to paying contracts and what investors should look out for. Q1: Full year 2019 results out yesterday, what are the key take-outs ...

This article OnTheMarket plc Q&A: Full year results (LON:OTMP) was written by DirectorsTalk Interviews.


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OnTheMarket plc (LON:OTMP) Chief Executive Officer Ian Springett caught up with DirectorsTalk for an exclusive interview to discuss the key take-outs from their full year results, creating value for agents, converting trial agents to paying contracts and what investors should look out for.

Q1: Full year 2019 results out yesterday, what are the key take-outs from these results that we should take note of?

A1: Well, this is our first post-IPO year and so it hasn’t been a year for driving up revenue but it has been a year where we have been investing the cash we raised. So, the expectation was material losses as a result of doing that and fairly modest growth in revenue and that is exactly what we delivered.

The results on both those lines are pretty much as expected albeit the loss was lower that perhaps people may have expected. That was a result of the fact that generally having invested in the organisation and the team, and with a big investment in marketing, we were able to deliver what we’ve delivered with rather less spend than we anticipated. So, that meant we finished the year with a higher cash balance than perhaps would have been expected by some.

Q2: The OnTheMarket strategy from IPO was to build up the number of agents using the portal by offering them free trials to recruit them and then convert them to paying contracts when the value could be demonstrated. How have you done on creating value for these agents?

A2: I think we’ve had a great year. Our task was to move the portal from the scale it was at and from the performance it was delivering, which roughly speaking was 5,500 agents paying to list and around 6 million visits per month.

By the end of January, the end of our year, we’d increased the number of agents on the portal to 12,500 and we had quadrupled the number of visits and we had increased by seven fold the number of leads we were generating. So, you can work back from that to say that every agent on the portal was getting considerably more leads from us per branch than we’d started with.

If we look a bit further, so the period beyond January, we announced in May a further record month for both traffic and leads. On a leads per office per month basis we’re now up with and indeed potentially exceeding Zoopla and catching up with Rightmove.

What’s interesting is this is a business where there is only really a fixed stock of enquiries that can be got, portals don’t create them, we just fight to be the channel through which they are delivered. Our proportion of the leads generated by the big three is growing and growing and we estimate that we are up around 33% in the month of May and obviously, we look forward to continuing that progress.

Q3: Now that you have started the conversion of free trial agents to paying contracts, what’s your experience with that so far?

A3: We’re really pleased. We have already moved just about a thousand, in fact I can say today that we are over a thousand mark from free to paying contracts, the majority of those have opted to take our longer term contract which are for 5 or 3 years.

Both of those contracts deliver a new shareholding to the agents who commit, those shares represent roughly 50% of the contract value, if it’s a 5 year deal for instance at £4,000 a year then there would be £10,000 worth of shares issued but calibrated at the IPO price so that that is a fair distribution of the shares. All of those shares are locked in for 5 years, so it’s not about what we are doing today, or certainly what the share price is doing today, it’s about how we can develop and deliver this business going forward. So, we are very pleased with that.

The balance of the contracts that we are issuing are 1 year contracts, this is where agents are not quite ready perhaps to commit to us for that longer term period, maybe uncertainties in their own business. Those contracts have an option that allows the agent at a later date to transfer to one of the 3 or 5 year deals and get a shareholding albeit a lower one.

So, given the market conditions for agents are not the greatest, we think that’s a great start, momentum is continuing, our sales team are very optimistic about carrying that forward for the rest of the year and obviously beyond.

Q4: You’ve said it’s about growing the business going forward, what are the key things that OnTheMarket have to do over the rest of 2019 and what should investors look out for?

A4: I think we clearly need to continue the process of moving to paying contracts for all of the agents who are on the portal and we won’t be announcing that on a frequent or a regular basis because we can’t conduct that activity in public, it’s a negotiation within the industry with individual agent firms and obviously competitors have a vested interest in trying to interfere with the process as well. So, we won’t particularly be making big announcements about it probably until we get to our interim reports in October.

Certainly, investors should look out for more progress on the traffic and the value that we’re delivering because obviously as time goes on, the more value we can deliver to the estate agents, the more brand visibility we can generate, the more likely it is that they will be inclined to support us going forward and hopefully many of them for the long term as so many have already done.

We’re also improving, all the time, our product range, I think I have said to you before our aim is to match the product set that Rightmove currently delivers to agents and, indeed, in due course to better it. That’s to allow agents, should they choose to, to begin migrating away given the price increases and the declining performance of Rightmove in terms of leads generated.

So, announcements about increases in the value we’re delivering in all those respects would be good news and hopefully investors will appreciate that.

This article OnTheMarket plc Q&A: Full year results (LON:OTMP) was written by DirectorsTalk Interviews.


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Q&A with Bushveld Minerals Limited: Vanadium production & energy storage (LON:BMN) https://www.directorstalkinterviews.com/qa-with-bushveld-minerals-limited-vanadium-production-energy-storage-lonbmn/412784933 Thu, 13 Jun 2019 11:48:57 +0000 https://www.directorstalkinterviews.com/?p=784933 Bushveld Minerals Limited (LON:BMN) Chief Executive Officer Fortune Mojapelo caught up with DirectorsTalk for an exclusive interview to discuss the updated resource statement for Vametco, key points from their final results, the recent Bushveld Energy RNS and what to look out for in the coming months. Q1: Now, there’s been quite a bit of news ...

This article Q&A with Bushveld Minerals Limited: Vanadium production & energy storage (LON:BMN) was written by DirectorsTalk Interviews.


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Bushveld Minerals Limited (LON:BMN) Chief Executive Officer Fortune Mojapelo caught up with DirectorsTalk for an exclusive interview to discuss the updated resource statement for Vametco, key points from their final results, the recent Bushveld Energy RNS and what to look out for in the coming months.

Q1: Now, there’s been quite a bit of news flow for BMN over the last month or so and towards the end of last month, you provided an update on the Vametco Inferred and Indicated Mineral Resource. Can you just talk us through the highlights?

A1: We essentially provided an updated resource statement for Vametco. Vametco is our core producing platform and following some additional work that we did, some drilling, we are very pleased with the updated results.

These reflect the significant increase on our resource size, confirms the great quality of our resource space, so we now have a resource space that is 187 million tonnes with an average grade of 1.98% V2O5 which represents an increase of some 31%, as well as a growth in our reserve of 85% to 48.4 million tonnes.

Again, importantly, this is a growth that is not at the expense of the quality of our resource space and the reserve grade is at 2.02% V2O5 which is fantastic.  

Q2: We also saw final results for the period ended 31st December 2018, in your view what were the key points that investors should take from those results?

A2: It’s the first time that we have the results reflecting the consolidated position of the company including Vametco, which we acquired at the start of 2017 so for the first time we can see the impact of an asset like Vametco on the performance of Bushveld Minerals.

On a consolidated basis, BMN has demonstrated very solid financial figures and $92 million revenue, an EBDITA of $101 million and with a very strong cash position of $42 million.

Of course, underpinning all of this is Vametco itself which has demonstrated its attraction, its solid proposition to us as a low cost producer.

One other point that I think you will pick up on from our financial results, which is important to highlight, is the fact we reached all of these results without any debt on our balance sheet so that positions us very very well going forward.

Q3: Now, just yesterday we saw that your subsidiary, Bushveld Energy Limited, has enabled the successful deployment of an innovative vanadium electrolyte rental product in industrial-scale batteries. Obviously, this is very exciting but what does this mean for the company?

A3: So, you know we’ve got two key platforms for vanadium in our company:

Bushveld Vanadium which is really the production asset comprising three very very attractive deposits with a resource which is fantastic, the largest primary vanadium resource space of anyone with the kind of grade that I talked about earlier. Vametco is one of two production assets with Vanchem coming on board, the two of them at full production capacity would be producing the order of 8,400 tonnes of vanadium per annum.

With that kind of production platform, which is low cost, we believe that we’re very well placed to play a meaningful role also in the energy space so we’ll continue to supply to the steel sector but we also see the energy storage market as a really attractive market for us as a company to get involved with.

That’s important at three levels, the first one being that it helps strengthen and diversify vanadium demand. The second one is the fact that the stationary energy market in its own right is a very very compelling commercial opportunity for us as a company. Thirdly, we think that energy storage provides a very neat natural hedge for us as a company because if vanadium prices come lower, the attraction of vanadium flow batteries in traditional energy storage applications becomes that much more compelling.

So, that’s the underlying motivation for us to grow into this in an interesting market however, we are also mindful that one of the key hurdles to adoption for vanadium redox flow batteries is the volatility in the vanadium price. Unlike many of the battery systems, vanadium makes up a significant share of the cost of the vanadium flow batteries, we’re talking between 30% and 45% quite easily.

So, a rental product like the one we have done is our way of solving for that challenge, we believe that it takes out a significant chunk of the upfront capex of the battery systems and convert it into an opex number over what is a long life span for these batteries.

They’ve got a very long life span, a vanadium flow battery can last for about 20 years, during that period the electrolytes doesn’t degrade and because it doesn’t degrade, it has a significant residual value. At the end of the life of a vanadium flow battery, that electrolyte can easily be put into another battery and so, that’s why we thought an effective solution would be a very very key enabler for vanadium flow batteries.

We’re very pleased to have done the first contract and I should say that this is the first and we certainly hope to do a lot more going forward.

Q4: Now you’ve said the structures and documentation is now in place and forms the groundwork for future projects. Is it safe to assume then that there’s already been discussion about further projects? I guess that I’m asking what else should investors be looking out for in coming months from Bushveld Minerals?

A4: If we’re talking further projects, it depends what we’re referring to.

If we’re talking about our primary producing platform, I think that it’s fair to say that with Vametco and Vanchem, our priority is to complete the acquisition of Vanchem post, competition approvals, and to make sure that we undertake that refurbishment programme as quickly as possible to get Vanchem producing at a 4,200 metric tonne of vanadium per annum level.

Vametco, we have a clear priority to increase the production volumes there, incidentally as you increase your production volumes, you further lower your cost of production which will make our production that much more competitive.

So, those are the immediate priorities for us from a vanadium production point.

On the energy front, there are a number of initiatives that we have said that we are doing, certainly we want to grow a pipeline of the rental product and we also want to grow in our pipeline of vanadium flow battery projects. One of the things we do is try to develop mandates for large-scale energy storage solutions which we can solve through vanadium batteries.

Of course, we’ve got the electrolyte plant that we’re building up in East London and we have a solar-VRFB mini-grid that we are busy with at Vametco which we are quite excited about, which we’d like to use to demonstrate the business case for typically what you call your traditional large energy user-type customers.

So, that’s a lot of stuff that the market can expect from us.

On a corporate level, we have announced that we are looking and seeking a listing on the Johannesburg Stock Exchange, we think that we have a story that resonates very very well with the capital markets in South Africa and we’d like to create a platform for local capital markets to participate in our story.

We continue the work, of course, to expand our organisational capacity, we’ve seen tremendous growth over the last 2 years and it’s quite important to us to make sure that our capacity to manage this growth, as well as the growth that lies ahead, is strengthened and in respect of that, you will also see some news flow in the coming months.

This article Q&A with Bushveld Minerals Limited: Vanadium production & energy storage (LON:BMN) was written by DirectorsTalk Interviews.


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Avacta Group Plc Significance of the clinical candidate selection (LON:AVCT) https://www.directorstalkinterviews.com/avacta-group-plc-significance-of-the-clinical-candidate-selection-lonavct/412784790 Wed, 12 Jun 2019 12:05:22 +0000 https://www.directorstalkinterviews.com/?p=784790 Avacta Group plc (LON:AVCT) Chief Executive Officer Alistair Smith caught up with DirectorsTalk for an exclusive interview to discuss the significance of the latest RNS. Q1: First off, could you explain the significance of your latest announcement about selecting the Affimer candidate for first time in human clinical trials? A1: For a new platform like ...

This article Avacta Group Plc Significance of the clinical candidate selection (LON:AVCT) was written by DirectorsTalk Interviews.


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Avacta Group plc (LON:AVCT) Chief Executive Officer Alistair Smith caught up with DirectorsTalk for an exclusive interview to discuss the significance of the latest RNS.

Q1: First off, could you explain the significance of your latest announcement about selecting the Affimer candidate for first time in human clinical trials?

A1: For a new platform like Affimers de-risking is a critical milestone for potential partners and therefore, first time in human tests of the platform represents a major de-risking of a new technology which can only improve the number and size value of licensing deals, partnering deals that we can do.

So, getting the first candidate molecule into human has been the objective for a couple of years and that is the reason we selected PD-L1 which is a relatively low risk in terms of target biology, a relatively low risk target for us to progress into the clinic.

So, it’s a key milestone and the fact that we have been able to select the candidate Affimer for development allows us to stay on track for an IND filing at the back end of 2020 and dosing patients in Phase I shortly afterwards.

Q2: What’s the long term plan for developing immunotherapies with a PD-L1 inhibitor?

A2: There are, obviously, a number of PD-L1 and PD-1 inhibitors on the market so another inhibitor of this particular pathway is unlikely to have real clinical or commercial value on its own so, as I say, the primary objective was to get human data for the platform with a low target risk biology. However, TMAC drug conjugate programme and the bispecific’s that we are developing will be based around PD-L1.

So, PD-L1 Affimer will give Avacta Group a proprietary basis, or backbone, for developing quite novel bispecific’s and drug conjugates which will add considerably, and therefore commercial, value to our pipeline.

Q3: You mentioned the TMAC drug conjugate programme, last week Avacta Group announced that the TMAC linker was going to be tested in humans in the first half of next year which is much sooner than was expected. Could you talk us through that planned clinical trial please?

A3: Again, it’s critical to test that linker which is a key part to the TMAC platform in human as soon as possible. As we’ve just been discussing, we’ll have human data for the Affimer platform very late 2020, probably early 2021, and we already have a considerable amount of data from our collaboration with Tufts University on the first chemo-toxin that we’ll put into the first two TMAC molecule; the I-DASH inhibitor.

The linker, and its performance in human, is obviously a key piece of data that we need to obtain so we have compelling data in animal models but of course, you don’t know until you get into human trials whether they will be reflected in the performance in man, in human. So, it’s key to de-risking the TMAC platform to get that human data as soon as possible.

We had expected that would be as part of a full TMAC drug conjugate but what we have realised, again through our collaboration with Tufts, what we’ve been able to access and be able to do is to test that linker before we actually have a full TMAC drug conjugate ready to test in human. That is because the linker itself makes a chemo-toxin, a chemotherapy such as Doxorubicin, inactive by preventing it from entering cells.

So, by just attaching the linker to a chemotherapy like Doxorubicin, that should be inactive and harmless, as it were, before the linker is cut in the tumour microenvironment. So, there should be tumour-specific release of active Doxorubicin using this TMAC linker, Doxorubicin Prodrug it’s referred to as.

So, it gives us a relatively straightforward way of testing whether the linker works in human using a Doxorubicin Prodrug. The read-out is a straightforward efficacy read-out because if the linker works and is cleaved in the tumour microenvironment then active Doxorubicin will be released, there should be a reduction in tumour size which is obviously the outcome that’s being south and

What it also gives us potentially is a windfall opportunity. We’re not a chemotherapy company and we’re not going to start to develop chemotherapies, but it gives us an opportunity if the linker does improve that therapeutic index and safety of Doxorubicin, it gives us an opportunity for a licensing deal for that Doxorubicin Prodrug and potentially other FAP-Alpha sensitive linker prodrugs.

This article Avacta Group Plc Significance of the clinical candidate selection (LON:AVCT) was written by DirectorsTalk Interviews.


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Q&A with KEFI Minerals plc: Tulu Kapi & Saudi Arabia projects (LON:KEFI) https://www.directorstalkinterviews.com/qa-with-kefi-minerals-plc-updates-on-tulu-kapi-saudi-arabia-projects-lonkefi/412784618 Tue, 11 Jun 2019 10:42:55 +0000 https://www.directorstalkinterviews.com/?p=784618 KEFI Minerals plc (LON:KEFI) Executive Chairman Harry Anagnostaras-Adams caught up with DirectorsTalk for an exclusive interview to discuss their 2018 results, the Central Bank approval for Tulu Kapi project, production targets and their other projects in Saudi Arabia. Q1: You released your 2018 results yesterday, could you summarise for us the developments at KEFI Minerals ...

This article Q&A with KEFI Minerals plc: Tulu Kapi & Saudi Arabia projects (LON:KEFI) was written by DirectorsTalk Interviews.


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KEFI Minerals plc (LON:KEFI) Executive Chairman Harry Anagnostaras-Adams caught up with DirectorsTalk for an exclusive interview to discuss their 2018 results, the Central Bank approval for Tulu Kapi project, production targets and their other projects in Saudi Arabia.

Q1: You released your 2018 results yesterday, could you summarise for us the developments at KEFI Minerals last year and in 2019 so far?

A1: In respect of 2018, the number one development really wasn’t our doing but it was profoundly important to us and that is that the states of emergency ended in Ethiopia. Also, the appointment of a new government in the country which I suppose many would’ve seen the headlines every month or so with profoundly, progressive and positive changes in the country, that’s really so important to us, it can’t be understated.

That really unshackled our project, those changes in the local politic environment and positive initiatives have been possible since then, because of that. As a result of which, we have done a number of things through the course of 2018 and up until recently.

Firstly, we fully mandated the infrastructure finance, $160 million, that was in May last year and we then successfully completed the due diligence on the project, contractual relationships, risk assessments and so on would done in accordance with that.

Secondly, we secured project partners, $58 million in Ethiopia from the government and very strong conservative business groups in the country. We set up a working capital facility to make sure that we can keep the ball rolling down in the project company whilst we put together this very large project financing at the project level.

Lastly, we also introduced a very senior management team for development, construction, operations, people with impeccable records for such projects.

In 2019, the most significant thing is receipt, today, of the last government consent required for the project finance package to flow into closing procedures. This last Central Bank consent has been awaiting for 3 months now, it took some months instead of days because whilst we had agreed it a long time ago, the government decided to issue a general policy directive for the world at large, not just for one-off transactions. So, we were under confidentiality so we knew it was coming but we couldn’t really say so, that was the government’s business and we respected their confidentiality.

So, that’s it, unshackling last year and then flowing in actions since then.

Q2: Now, I understand you primary focus is on Tulu Kapi gold project, what’s still required for development to start on the project?

A2: As a result of today’s Central Bank confirmation of approval, we can close our partners agreements and equity subscriptions, protocol and rigmarole that one goes through in Ethiopia but it’s in our procedural. As set out in our RNS, there are no point of contention between the partners, they’ve all cleared the debt for each other and Central Bank have cleared the debt for us as a set. So, we can proceed with those closing procedures for the project equity and likewise move onto the debt.

In terms of the development on the ground, we are now allowed to, with the local authorities out there, to go through the details of the resettling of the first contingent of the people, that is a very small set of 60 households.

We’ve given ourselves several months to do that, it only takes a few weeks physically but we’ve given ourselves a few months to do that to be on the safe side because the country’s going through a lot of change and turmoil and we just want to be very careful and safe and secure for our first movers so that everything’s done nice and timely.

Q3: You’re targeting production in mid-2021, can you briefly outline the development program and what it entails in order for this to be achieved?

A3: Well, we’ve started some of the long lead steps already to 2-year development schedule and somethings are quite critical to have begun already and they have begun already, tender packages for the power installation and road installation in particular. These are critical path issues and that’s in hand with the people doing those jobs.

Between now and the end of the Ethiopian wet season, it’s not like a tropical wet season but nevertheless, we’ve said we’ll adjust some activities around it, for harvest cycle and the community as well as other factors so between now.

So, over the course of the next 4 or so months, we’re really focussing on the resettlement phase I; a small number of households and on the detailed engineering, or front end engineering. At the end of that phase, that equity funded phase, we then move forward with equity closing, bulk earth work and fabrication jobs within the fast flowing factories that provide the plant components.

We’ll then move on to assembly next year, mining will start the middle of next year, there is very little work to do on the mining side before one starts getting to the ore because there’s very little overburden. We then go onto commissioning and along the way a lot of recruitment and training are dedicated to maximum local employment so there’s a lot of recruitment, a lot of training.

That management team we appointed last year in preparation for all of this is setting up plans and so on to take care of that job.

Q4: Outside of going into production at Tulu Kapi, what other focusses are there for KEFI Minerals?

A4: Saudi Arabia, yesterday was Eid, the end of Ramadan, it makes a moment in time where we can remobilise into the field.

We’re quite focussed sharply on very very large copper/gold target we have in Hawiah as part of a very large belt of 24 VHMS systems. They’re all potential company makers, some of them will be good, not all obviously, but the first cab off the rank to drill-test within a few months is Hawiah and our field teams will get back into the field now.

With Tulu Kapi underway on the one hand in Ethiopia and drilling a huge VHMS system on the other hand in Saudi Arabia, you’ve got a parallel stream there. Obviously, Tulu Kapi taking 99% of the time and money in terms of people involvement and financial involvement but the Hawiah project is very very significant even though it takes very few people and very little money. It has an extremely high potential value to the project and if we’re successful in what we’re hoping to achieve in Hawiah, it would dwarf Tulu Kapi .

So, we’ve got both of those streams ahead of us, both of them very exciting and both of them can now start moving forward.

This article Q&A with KEFI Minerals plc: Tulu Kapi & Saudi Arabia projects (LON:KEFI) was written by DirectorsTalk Interviews.


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Fox Marble Holdings PLC Q&A: Final results (LON:FOX) https://www.directorstalkinterviews.com/fox-marble-holdings-plc-qa-final-results-lonfox/412784471 Mon, 10 Jun 2019 10:17:48 +0000 https://www.directorstalkinterviews.com/?p=784471 Fox Marble Holdings plc (LON:FOX) Chief Executive Officer Chris Gilbert caught up with DirectorsTalk for an exclusive interview to discuss the key factors of their final results, progress in 2019 and what we can expect going forward. Q1: Final results for the year ended 31st December 2018 out, can you tell us what the key ...

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Fox Marble Holdings plc (LON:FOX) Chief Executive Officer Chris Gilbert caught up with DirectorsTalk for an exclusive interview to discuss the key factors of their final results, progress in 2019 and what we can expect going forward.

Q1: Final results for the year ended 31st December 2018 out, can you tell us what the key factors were that drove your results for 2018?

A1: Yes, I think the way to look at this is this is a year where we have consolidated a lot of the production issues or were consolidating a lot of the production issues that we’d previously had and that our job was to build the machines such that we can satisfy the demand that we have created. We talked earlier in the year about the fact that towards the end of the year, we were in a position where our demand exceeded our abilities to supply.

So, whilst the numbers look relatively restrained in terms of what they were before, if you include the advances that we were paid on contractual sales that we’d made, our revenue was up €1.2 million to €1.7 million and our tonnage was 20and higher than it was the year before.

The other piece of the equation is since the factory came online last year, we were able to transact 7,000 square metres of processed material and I think the year before that it was significantly lower.

As a consequence of this, we can see that the business is building albeit I think probably at a slower level than people would’ve liked to see but there’s a lot that you can’t see that’s been taking place, particularly towards the end of the year which we’ll start to come through this year.

Q2: Can you describe then the progress in 2019 that you can talk about?

A2: Just to give you one key metric for example, in Q1 of 2018 our total sales were under €100,000, our sales in Q1 of 2019 were over €500,000, that’s 6 times as much as it was in the same period of last year. So, that reflects a very very strong start to the year and given that includes the period where the quarries are shut down because of the normal winter shut down, that’s a spectacularly strong start to the year and a very good result.

Of course, what drives this is our capacity to produce so our production figures for that period in 2018 were just over 2,000 tonnes and our production figures for the same equivalent period this year in 2019 is just under 6,000 tonnes, that’s 3 times as much. This significant increase in production is a reflection of the capital investment that we’ve made specifically in the quarries to increase production and that is driving through now to the bottom line which I think is what 2019 is all about.

Q3: How has Fox Marble progressed from your perspective?

A3: The topline figures, as I’ve just described, I think speak for themselves. The underlying progress that we, as a company, I think are going to be able to demonstrate to the market and everybody more widely is that our marketing, sales and distribution platform is far more robust than it has been in the past, we have got multiple customers in lots of parts of the world and repeat ordering on a regular basis.

So, for example, yesterday I had 2 customers in our office here from Greece who were saying “we want 300 tonnes of your marble as a minimum from one of our quarries – the quarry in Macedonia – every month. We want to know that we can show up on the 25th of every month and take our 300 tonnes and that we can do this every month with a degree of certainty” so that level of certainty and security from our customer point of view is very important

From our point of view, it means we can plan for a number of customers coming into the quarries on a regular monthly basis and taking off, under the contractual relationships we’re entering into with them, specific amounts of material for which they pay in advance and that brings stability that we’ve been working towards.

So, that stability, that level of visibility that we can have throughout the course of the year, we know who these customers are, these are large credible customers that anybody would be pleased to have, bluechip in the stone industry, is what any quarrying and processing company would like to have.

We’re establishing these relationships and we’ve got them now and that’s the key progress rather than ad hoc or random sales that we were experiencing a couple of years ago, it’s not like that now and that I think is the key progress for us.

Q4: What can we expect from Fox Marble for this year?

A4: We have announced a couple of significant contracts and we are going to continue to announce contracts that range from very prestigious contracts relating to signature buildings and projects that anybody would be pleased to be involved with to these long term off-take agreements with the visibility and stability of a regular monthly distribution and shipping of material.

I think we’re going to be able to announce these regularly throughout the course of the year to the market and people I think will then start to understand the real progress that the company has made over the last 18 months to 2 years that’s gone into establishing the position we’re in right now.

We’re relatively pleased so come the end of the year, we’d like to be in a position for that to have reflected through to the bottom line and everybody can basically see the money which is of course what everybody is waiting for.

This article Fox Marble Holdings PLC Q&A: Final results (LON:FOX) was written by DirectorsTalk Interviews.


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Q&A with W Resources PLC: Latest La Parrilla update (LON:WRES) https://www.directorstalkinterviews.com/qa-with-w-resources-plc-latest-la-parrilla-update-lonwres/412784462 Mon, 10 Jun 2019 08:56:26 +0000 https://www.directorstalkinterviews.com/?p=784462 W Resources plc (LON:WRES) Chairman Michael Masterman caught up with DirectorsTalk for an exclusive interview to discuss their latest La Parrilla update. Q1: Michael, when we last spoke, you’d had a busy first quarter a La Parrilla and it seems the pace continues. A couple of weeks back, you announced the first ore fed to ...

This article Q&A with W Resources PLC: Latest La Parrilla update (LON:WRES) was written by DirectorsTalk Interviews.


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W Resources plc (LON:WRES) Chairman Michael Masterman caught up with DirectorsTalk for an exclusive interview to discuss their latest La Parrilla update.

Q1: Michael, when we last spoke, you’d had a busy first quarter a La Parrilla and it seems the pace continues. A couple of weeks back, you announced the first ore fed to the commissioned jig and mill plant at La Parrilla, can you just talk us through that?

A1: There’s four parts, if you like, to the La Parrilla process, there’s the mining which we announced today, there’s the crushing which is fully commissioned and fully operational, there’s the jig and the mill and then the concentrator.

So, what we’ve been doing for the last 3 or 4 weeks is commissioning the jig and feeding crushed ore through the jig to get all the balances right, to get all the upgrades right and that’s upgraded material. When we pass the crushed ore through the jig, we increase the grade and reject some of the waste mass and we take that jig material to our existing concentrator.

Q2: Today you announced an agreement with General de Maquinaria y Excavación which has been awarded a mining contract for the La Parrilla tungsten project in Spain. Can you just explain for us now what this means for W Resources?

A2: We’ve signed the formal contract, GME for short has all of the primary equipment in place and are mining away at La Parrilla.

I think the most important takeaway is that the cost structure in that contract is very much in line with final investment decision report in which the lower operating costs of the mine were laid out so the contract confirms that we can mine at those estimated rates that we were expecting.

One of the most important things, particularly in these volatile times, is having low operating costs so with a low strip ratio and low mining costs we’re well placed to make sure we’ve a very low cost long life mine.

Q3: With all of the pieces of the puzzle, so to speak falling into place, what should investors be looking out for over the coming months from W Resources?

A3: If March was a busy quarter, June is also a very busy quarter. We’re targeting construction completion of the concentrator, this is the large scale concentrator capable of producing 200 tonnes per month of tungsten concentrate. We’re targeting construction completion in June and then we’ll move on to commissioning in July so that’ll be an important milestone.

In the September quarter, we’ll move up to a more steady state of operations and production and shareholders can expect to see steady production reporting.

This article Q&A with W Resources PLC: Latest La Parrilla update (LON:WRES) was written by DirectorsTalk Interviews.


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EQTEC PLC Q&A: Agreement to acquire 19.99% ownership of NFCP (LON:EQT) https://www.directorstalkinterviews.com/eqtec-plc-qa-agreement-to-acquire-19-99-ownership-of-nfcp-loneqt/412784457 Mon, 10 Jun 2019 08:08:06 +0000 https://www.directorstalkinterviews.com/?p=784457 EQTEC plc (LON:EQT) Chief Executive Officer Ian Price caught up with DirectorsTalk for an exclusive interview to discuss the agreement to acquire 19.99% ownership of North Fork Community Power. Q1: Now, the Company has signed a legally binding agreement with Phoenix and North Fork Community Development Council to acquire 19.99% ownership of North Fork Community ...

This article EQTEC PLC Q&A: Agreement to acquire 19.99% ownership of NFCP (LON:EQT) was written by DirectorsTalk Interviews.


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EQTEC plc (LON:EQT) Chief Executive Officer Ian Price caught up with DirectorsTalk for an exclusive interview to discuss the agreement to acquire 19.99% ownership of North Fork Community Power.

Q1: Now, the Company has signed a legally binding agreement with Phoenix and North Fork Community Development Council to acquire 19.99% ownership of North Fork Community Power. What benefits will this bring to EQTEC?

A1: This deal is the next to be delivered under the framework agreement we announced recently with Phoenix Energy, our strategic partner in the US. It’s a template of how we want to work with our partners inside this framework agreement arrangement,  particularly where projects are close to contract signature, all the necessary agreements are in place and where we can make an impact on the process by taking strategic equity position.

The North Fork project is exactly that, our equity position accelerates the delivery of the project and we expect to sign that contract and begin work by the end of June 2019.

We’ll also benefit from receiving dividends from the strong cash flow that’s in the project once it’s operational and the initial investment is paid back.

In summary, the ownership position in the project will help build the balance sheet for the company and also, give us access to long term recurring revenues.

We’re also extremely pleased with the partnership developed with Phoenix Energy and we’re already in discussions with them to assist on the execution on another project within the framework agreement, that’s a 3 megawatt plant in Wilseyville, California.

So, it’s a real advantage for us developing a pipeline of projects with the same partner as we’re able to progress developments and contracts much more quickly with a standardised process for document delivery and execution.

Q2: The company expects to invoice NFCP, under a separate sales contract, for the sale of further equipment and the supply of engineering and design services to NFCP. Can you expand on this for us?

A2: So, as well as the supply of equipment we have in stock that we’re supplying from the project, there’s also a requirement to provide some additional new equipment which is under the scope of our supply.

So, we’ll be delivering the engineering design for the project with construction to commence almost immediately and this will bring around about €2.2 million for the company.

These revenues will be delivered over the next 6-12 months as we progress with the construction of the project according to its delivery milestones and we start off by receiving a 25% fee at contract signature, the rest of the payments as per the scheduled milestones.

Q3: EQTEC has a key emphasis on expansion and growth, what are the main targets for the remainder of 2019?

A3: As we’ve emphasised recently, with our focus on our 3 business verticals, our targets are really to delivery the framework agreements with these key strategic partners to set up the business, to deliver the contracts and revenues that our shareholders are looking for and rightly, expect.

We anticipate a number of other JV agreements with established partners in the coming weeks and the importance of these partnerships really is about credibility and access to local resources of the partners. Also, it secures us a pipeline of contracts in 2019 and beyond which are ready to be executed or very close to being ready to be executed. We look forward to talking about those in more detail in the months ahead.

Just in summary, I’d like to just say there’s an incredible amount of work that’s gone into selecting and settling these partnerships up and I’m confident that this investment of time and effort will pay serious dividends going forward.

I want to thank the wider team of the company for relentless work and especially our long term shareholders for their patience and support. We understand that in AIM, expectations are always inside a compressed time and rest assured, currently we’re building the foundations of a business that can be sustained in the long run and give us the growth we’re all expecting.

This article EQTEC PLC Q&A: Agreement to acquire 19.99% ownership of NFCP (LON:EQT) was written by DirectorsTalk Interviews.


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Urban Logistics REIT PLC Q&A with Hardman & Co (LON:SHED) https://www.directorstalkinterviews.com/urban-logistics-reit-plc-qa-with-hardman-co-lonshed/412784294 Fri, 07 Jun 2019 06:33:35 +0000 https://www.directorstalkinterviews.com/?p=784294 Urban Logistics REIT PLC (LON:SHED) is the topic of conversation when Hardman and Co’s Analyst Mike Foster caught up with DirectorsTalk for an exclusive interview. Q1: Urban Logistics REIT, can you tell us what it is? A1: It’s an investment company focussing on urban warehouses and it’s got a small amount of associated offices and ...

This article Urban Logistics REIT PLC Q&A with Hardman & Co (LON:SHED) was written by DirectorsTalk Interviews.


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Urban Logistics REIT PLC (LON:SHED) is the topic of conversation when Hardman and Co’s Analyst Mike Foster caught up with DirectorsTalk for an exclusive interview.

Q1: Urban Logistics REIT, can you tell us what it is?

A1: It’s an investment company focussing on urban warehouses and it’s got a small amount of associated offices and light manufacturing.

The driver, literally, is the last mile delivery and it’s therefore typically smaller and medium sized assets, around 50 to 80,000 square feet, so these are not the big boxes that you see along motorway intersections, it’s the last mile of delivery.

Quite important is that these are single let properties, making them more financially efficient and the creditworthiness shows high-quality tenants and the market’s in strategic under-supply.

Q2: Did anything stand out in their results which were announced 24th May?

A2: The net asset value (NAV) went up again by 11% and good dividends were paid and the yield on the stock is well over 5%, the dividend yield and those dividends rose 11% too. They’ve achieved returns well towards the top end of the UK property sector for a few years now.

Q3: What sort of returns are they achieving?

A3: Investors look at something called Total Asset Return which is that rise in NAV plus the dividends and for that year to March 2019, it was 17.7%, the year before it was 10.9% and before that it was 19.1%.

It’s worth saying those numbers slowly as they were really strong so that’s 17.7% last year, 10.9% the year before and 19.1% before that. They are only in part driven by the clear fact that the market is in strategic under-supply.

Q4: Do you think that’s sustainable?

A4: Yes, it’s a large undersupply. The assets are valued on average at a capital value of around £80 per square foot and that’s well below the approximate £120 or more of the new-build cost of these small/medium sized warehouses and that’s even before factoring in any land value at all.

So, it would take a fair bit of further asset value rises to stimulate much new development and these are at sites in the urban environment so it’s difficult to find even considering new development.    

Q5: What would happen if prices of these assets rose so far that new development was stimulated?

A5: The NAV of the company would be significantly higher, because the assets price would’ve risen under that scenario, and indeed from there on they might grow more slowly apart from some of the management’s extra value adding and that’s really crucial.

The management has clearly created valuable rises, management, for example, took profit last year on the Bedford asset, they’d held it for 37 months and they made a 74% total return and the buyer paid what we consider to be a market price.

What Urban Logistics did was get a new tenant in at £6.52 per square foot on Unit A and one at £6.26 per square foot on Unit B. The value was created by the purchase cost plus the selection of the appropriate tenant because on acquisition, it was £4.24 average rent and remember they got it up to £6.26. The acquisition price was set on that lower rent basis and they’ve done that sort of thing a few times.

Q6: Surely, as with all of these things, there must be risks?

A6: Yes, market rents have risen in the market generally to about 25% above Urban Logistics REIT’s current average £4.83 per square foot level.

Okay, if the UK economy saw prolonged weakness, the market in new rentals would soften, there’s a big gap there on the upside at the moment. There are those two major benefits of new-build costs being so much higher than the current value of these assets and of the internet shopping delivery fulfilment growth and the tenant roster is strong.    

Q7: Isn’t it the case that rents in this sector have gone nowhere for 20 years and maybe at the moment there’s just a one-off shift to on-line retailers needing these ‘last mile’ warehouses?

A7: That is very true that rents generally have gone up a bit, down a bit, they’re on a rise at the moment but they’ve gone sideways for the last 20 years, indeed. So, the rents are rising at the moment but it’s important to look at only a modest part of the growth in demand is internet shopping, there are lots of other drivers to demand growth.

Our full research report that Hardman wrote after the results goes into this but we conclude that internet shopping is useful, but there is that wide range of drivers and the story has a good dividend yield and it’s got a clear path to growth ahead of it. 

This article Urban Logistics REIT PLC Q&A with Hardman & Co (LON:SHED) was written by DirectorsTalk Interviews.


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Hardman & Co Q&A: Understanding discounts on investment companies https://www.directorstalkinterviews.com/hardman-co-qa-understanding-discounts-on-investment-companies/412784291 Fri, 07 Jun 2019 06:20:17 +0000 https://www.directorstalkinterviews.com/?p=784291 Hardman and Co Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview to discuss an article written on understanding the deepest discounts on investment companies. Q1: I see that you’ve written a chunky piece on understanding the deepest discounts on investment companies. Mark, why is that? A1: At Hardman and Co, what we ...

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Hardman and Co Analyst Mark Thomas caught up with DirectorsTalk for an exclusive interview to discuss an article written on understanding the deepest discounts on investment companies.

Q1: I see that you’ve written a chunky piece on understanding the deepest discounts on investment companies. Mark, why is that?

A1: At Hardman and Co, what we try and do is answer the questions of why you should invest in a company and what the risks are in doing so. For many investors, simply having a deep discount to Net Asset Value is a good enough answer to the first question.

However, we believe that investors also need to appreciate the risks and, in particular, the reasons why the shares are at a discount. Having understood those risks, investors need to be convinced  that there is also a catalyst for change on the part of the manager and how long it’s going to take for that market sentiment to reflect in a lower discount.

In our report, what we do is we look at the companies which have the largest discounts and review those very issues.

Q2: So, what were the key conclusions?

A2: What we found was that the largest discounts tended to reflect the compounding effects of multiple factors at play, not just a single one, indeed, for every company in this report, we have identified more than one issue.

While one factor, such as legacy performance, may be the major influence, the discount is materially worsened where other factors, such as corporate governance, play a role.

Addressing all the issues is likely to materially accelerate any discount reduction.

Q3: You refer to legacy issues, can you tell us more about why something in the past affects the valuation now?

A3: In each of the cases where we identified legacy issues as a key factor, the company has either gone back to basics or it’s fundamentally restructured so the outlook is fundamentally different from when the legacy event actually occurred. As the real risks have changed, the issue for investors is confidence that the manager can improve sentiment and convince other potential buyers that it will be different going forward.

Q4: And how important did you find prospective risks, rather than the past issues?

A4: What we found is there’s some correlation between the stress-test outlook scenarios as disclosed in the Key Information Documents which is a prospective share price performance risk measure, and the level of the discount. However, we would caution against over-reliance on this as it’s a very complex and opaque calculation, and there are many exceptions to this rule.

Some of the discounts we identified were driven more by prospective risks than historical ones and the common factor there might be things like illiquid assets, sensitivity of returns to macro drivers, competitive pressures and regulation. We’ve identified a range of other prospective issues as well including things like concentration and diversity risk and key staff dependency.

In the main, we believe these reflect the underlying business model of the company and they’re not going to change. While a deterrent to some potential investors, these prospective risks are also the reason why many of the buyers bought the company in the first place.

Q5: What other things did you look at?

A5: While the points above were the key factors concerning discounts, we also looked at a range of other factors such as how confident investors were in the accounting, fees and corporate governance; things like do the public shareholders have controlling votes or not, is there a major shareholder block and related party transactions.

We also looked at discount management techniques, size, and gearings and for companies that are in wind down, they face some very very specific issues as well so there’s a whole raft of issues there.

Q6: So, if you could summarise your report, what would you say?

A6: The discounts are there for a range of, often, inter-playing reasons. It is only if you understand those factors in depth that you can make a judgement as to  whether the company is a good opportunity or whether it’s going to be dead money.

This article Hardman & Co Q&A: Understanding discounts on investment companies was written by DirectorsTalk Interviews.


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ImmuPharma PLC Q&A with Chairman Tim McCarthy: Final Results (LON:IMM) https://www.directorstalkinterviews.com/immupharma-plc-qa-with-chairman-tim-mccarthy-final-results-lonimm/412783776 Wed, 29 May 2019 09:06:50 +0000 https://www.directorstalkinterviews.com/?p=783776 ImmuPharma plc (LON:IMM) Chairman Tim McCarthy caught up with DirectorsTalk for an exclusive interview to discuss their final results, spend going forward, corporate strategy for Lupuzor, Nucant & Ureka, key milestones for shareholders and the initiation note issued by The Life Sciences Division. Q1: ImmuPharma have just issued final results so first Tim, can you ...

This article ImmuPharma PLC Q&A with Chairman Tim McCarthy: Final Results (LON:IMM) was written by DirectorsTalk Interviews.


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ImmuPharma plc (LON:IMM) Chairman Tim McCarthy caught up with DirectorsTalk for an exclusive interview to discuss their final results, spend going forward, corporate strategy for Lupuzor, Nucant & Ureka, key milestones for shareholders and the initiation note issued by The Life Sciences Division.

Q1: ImmuPharma have just issued final results so first Tim, can you give us a summary of the financial highlights and include for us the loss for the year and your cash position?

A1: We posted financial year results for December 2018 last Friday showing an operating loss of around £8 million although almost £2 million of that are accounting adjustments so if you strip those out it’s around £6 million of which almost £5 million is R&D expenditure.

All of those numbers are very much in line with what we were expecting, the expenditure on R&D reflects the spend on the Phase III programme for Lupuzor and also what we’re calling the ‘open label’ extension study on Lupuzor as well which is a further 6-month study.

So, very much reflects the business model of the company which is called a virtual model or an outsourcing business model so as we spend on programmes, obviously the overall spend goes up and perhaps those programmes come to a close then the expenditure dramatically reduces.

So, no surprises there, we ended the year with just under £5 million in cash, that’s following a £10 million fundraising we did at the beginning of last year so we’re in pretty good shape especially looking forward when a lot of the expenditure on these programmes have now finished.

Q2: You’ve touched on spend, can you just provide us a little guidance on spend going forward and your cash runway?

A2: As I say, just under £5 million in the bank at the end of 2018 and what you will see going forward in 2019 and beyond is a dramatic decrease in that R&D expenditure which I just mentioned, about £5 million for last year. We’re not running a Phase III programme at that moment and the open label extension study, we took an awful lot of the cost for that last year as well, a few residual costs in this year.

Whilst I think about it, we are on track to report the results of that open label study within the next month, we said we’d report it before the end of Q2 which is the end of June so we’re on track to do that.

Overall, looking forward, the £5 million puts us in a good position because the dramatic decrease in R&D expenditure from this year on so good cash position for the foreseeable future.

Q3: Over the last month, ImmuPharma has provided an update to shareholders on its future corporate strategy for both Lupuzor and its earlier stage assets, Nucant and Ureka. Can you provide an update on the pipeline?

A3: We first updated at the beginning of May with the corporate update and then we reiterated that in the results last Friday. So, it breaks into two parts so the main asset being Lupuzor which is our Phase III product for lupus, just to remind your listeners, and we reported the results of that study last year.

So, unfortunately, we didn’t meet the statistical significance on the primary end point but within the study, we did show it was effective and very very importantly, the drug has a very very safe profile, that’s unusual with any drug of this type.

What we are seeing is an awful lot of renewed interest in Lupuzor, we as a company are very much concentrated on the paths to market for Lupuzor so that’s both the development pathway and also the regulatory pathway.

With a lot of the data, obviously now being examined form that Phase III study, it’s showing us an awful lot of very good signs and that is what other people are seeing as well so we’ve had a number of discussions ongoing for a little while now. Those discussions are starting to come to fruition so we are expecting to see some movement in and around Lupuzor over the next few months so we’ll see where that gets us but it’s looking quite good at the moment.

On the other part of the portfolio, these are two pieces of technology, one is a cancer technology called Nucant and the other is a peptide technology platform, both of these in subsidiaries of the company. We’ve indicating previously that we’re looking to divest certainly Ureka in one way or another and get it separately funded and what we recently decided to do was to make it a more stronger investment proposition but putting those two technologies together. They’re actually formally in separate subsidiary companies so those two companies will merge, we will then spin-off the merged unit.

Again, we’ve had a lot of interest surrounding those technologies and so that will likely be a private equity type deal where we spin-off into a separately funded vehicle or even possible a separate listing on a European exchange. So, whichever way it goes, the advantages to IMM shareholders will be that it will be separately funded so it won’t be diluted to our current shareholders.

I don’t think there’s any value recognised in the IMM share price and its corporation valuation for those technologies. Everybody is always concentrating on Lupuzor and when you look at the share price at the moment, the corresponding valuation which is about 10p and about a £14/15 million market cap, there is absolutely no value ascribed to those technologies at all.

By spinning them out, without further dilution to shareholders and potentially unlocking an awful lot of value, recognised value, in those two technologies, that then should flow back into recognition in the share price on AIM plus whatever we do with Lupuzor in the future.

So, I think some pretty good stuff coming up in the future, very much.

Q4: Just looking forward, what key milestones should shareholders be looking out for over the next 12 months?

A4: Well, the very first one which I mentioned briefly there was the results of the open label extension study, we call it an extension study because the study is open to patients who participated in the Phase III study. So, we’ve got just over 60 patients in the study, we should be reporting those results within the next month, certainly by the end of June, so that’s the first piece of news.

As I alluded to, the two main parts of the company, certainly over the next 12 months, it maybe sooner, but we should be doing something very practically with the spin-out and then we’ll see where we get to with the interest with Lupuzor.

So, if you add all of that up, quite a lot of potentially positive news flow coming up.

Q5: Today, an independent research outfit, The Life Sciences Division have issued an initiation note on ImmuPharma with a price target of 92p, can you give us some insight into their views behind this pretty bullish price target really?

A5: Yes, obviously it’s always nice to have a buy recommendation and a bullish price target which is frankly way above where we are, virtually 10p versus 92p price target but this is very much based on their own independent research.

A lot of the note concentrates on Lupuzor although there is comment on the technologies as well and what it’s focussing on is the differentiation that Lupuzor has against other drugs in development for Lupus.

Very much what I alluded to earlier that it’s a very safe drug which is quite unique in itself but the results that we did get from the Phase III are very encouraging especially when you look at it in targeted populations.

They’ve done, I think, a very very good job at analysing all that data and putting it in a context with the other drugs in development in this area which unfortunately for patients are not getting a very good run through, either because of associated safety or frankly lack of efficacy.

In that context, they’ve had a look at Lupuzor and its chances of getting through to the market and I think on that basis alone, that’s why they’re very positive and they’ve come up with a recommendation.

Very pleased to get that and I think, certainly in these days with post-MiFID which a lot of your listeners will be familiar with, it’s very difficult for small companies like us to get good independent research. That is what investors require otherwise they’re investing in companies blindly whereas 5/10 years ago, there was a lot more research available even for small companies.

So, to get something as well written as this I think is a real bonus for the company and its shareholders in turn.  

This article ImmuPharma PLC Q&A with Chairman Tim McCarthy: Final Results (LON:IMM) was written by DirectorsTalk Interviews.


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Metal Tiger PLC Q&A: Exploration Update for Kalahari Metals (LON:MTR) https://www.directorstalkinterviews.com/metal-tiger-plc-qa-exploration-update-for-kalahari-metals-lonmtr/412783741 Tue, 28 May 2019 09:40:31 +0000 https://www.directorstalkinterviews.com/?p=783741 Metal Tiger PLC (LON:MTR)) Chief Executive Officer Michael McNeilly caught up with DirectorsTalk for an exclusive interview to discuss their recent Kalahari Metals exploration update. Q1: Exciting news this morning with Kalahari Metals where drilling operations have now been approved and shares are on the up. Michael, can you remind us of your investment size ...

This article Metal Tiger PLC Q&A: Exploration Update for Kalahari Metals (LON:MTR) was written by DirectorsTalk Interviews.


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Metal Tiger PLC (LON:MTR)) Chief Executive Officer Michael McNeilly caught up with DirectorsTalk for an exclusive interview to discuss their recent Kalahari Metals exploration update.

Q1: Exciting news this morning with Kalahari Metals where drilling operations have now been approved and shares are on the up. Michael, can you remind us of your investment size in Kalahari Metals and what you see as the real value drivers here?

A1: Yes, very exciting news this morning, Kalahari Metals which is a metals company which Metal Tiger own 50% of currently, this is the news we’ve been waiting for.

We’ve met our farm-in requirements, we own 51% of Triprop but obviously, more to the point, we’re embarking on a 2,100 metre drilling campaign at the Ngami Copper project where we just received our environmental permit drill and Kalahari have engaged drillers who will hopefully be starting in early June. They’re looking to drill all three of the dome targets there.

Once that’s completed, we should be looking to drill the Okavango project which is to the north-east and along strike from Cupric’s ground in a lot of Cupric’s deposits. That is of course still subject to that project receiving its EMP’s, they are currently being vetted and we anticipate that we should receive those in the next couple of week.

So, very very encouraging and of course, it’s worth noting that we are also progressing the EMP’s for the Kitlanya ground where Kalahari acquired 100% of the Kitlanya ground subject to change of control approvals. Of course, the 51% is all subject to the change of control approvals by the Botswanan government.

Q2: What sort of scale could Kalahari Metals deliver if the drills go well?

A2: Well, obviously, there’s a huge amount of ground to cover, we’re only targeting the dome targets so we’re not targeting the traditional targets here so we are going after these domes. Each dome has several kilometres in strike and, obviously, we’ll know more about the scale and potential once they’ve drilled it.

It’s certainly from the modelling, each target on its own could be quite substantial of the three at the Ngami project and then there’s one dome target at the Okavango project which looked particularly compelling. Of course, in all these, we’ve done a lot of geophysical modelling, the team at Kalahari has done a lot of geophysical modelling, done a lot of targeting with soils; a reinterpretation of previous soils, but there’s nothing like drilling something.

This drilling campaign really is being done to support further drilling campaigns should we get a better understanding of the potential from the first drill hole so we will be looking to drill each and every dome. Of course, if the first one pulls out exceptional looking core, that may change but the intention here is to really put a few holes into each of these dome targets at Ngami and then eventually at Okavango and then interpret that information and do further drilling as required.

Of course, we’ll be looking to delineate further targets on the Kitlanya ground, some of the scale of the actual land packages is immense and I think it’s of strategic importance on the scale of the Kalahari copper belt. Certainly, when taken in conjunction with MTR’s exposure to joint venture with MOD as well as its large ownership in MOD, we’ve got exposure directly or indirectly to almost 21,000 square kilometres, which is the size of a small European nation.

Q3: The Government of Botswana seems to be highly supportive of the drilling in the Kalahari Copper Belt, what does that mean for the development of the company’s interests in the belt?

A3: I think what you’re going to find is there’s currently four players really, there are several other smaller private groups which we have spoken to but they’ve maybe got land packages that are interspersed between the four main players.

You’ve got Cupric who I believe have actually started flying some AM again which shows that they’re obviously going to be trying to delineate some targets on their ground, potentially for further exploration. You’ve obviously got MOD, you’ve got Kopore and then you’ve got Kalahari Metals.

The government of Botswana seems to be very supportive but in particular, they’re very supportive of companies that come in and go about things the right. So, obviously we have imediately on making the investment, one of the first criteria was to ask the non-MTR directors of Kalahari and the operators of the company to focus on getting these EMP’s in and go about things in a respectful manner.

So, we’ve done that and obviously the government has signed off on that and we expect we’ll get more support from them. Obviously, Kopore had their EMP’s in place over a large portion of ground for some time and the people that we’re working with, that Kalahari is working with, contractors, they’ve worked the belt, they know a lot of the farmers and they have a very good reputation.

I think what you’ll find is that the drilling will be quite aggressive in terms of if it’s a single drill rig, it’ll probably be going 24 hours a day with multiple shifts so we’ll be able to over a lot more ground.

Q4: What other developments are going on in the Metal Tiger portfolio?

A4: Well, obviously, the largest single investment in our portfolio is MOD Resources Ltd (LON:MOD)and they’ve just come out with their DFS recently and I’ll leave to investors who probably follow the story to read up on MOD. There’s lots of discussions going on in terms of the approach access to financing and the potential to develop the T3 project as well as ongoing exploration.

In terms of the other equity portfolio, looking at Thor Mining PLC (LON:THR) for example, I’m quite shocked that the market hasn’t had a more positive reaction to their rather strategic holding at Pilot Mountain given the recent developments with rare earths and China and the trade war. Hopefully the market wakes up to that, we are still a very large holder in Thor and anticipate that there should be some value creation there in the short term.

Privately, we’ve got an investment is a Thai lithium company that’s started drilling and we anticipate hopefully that we’ll be getting some results back from that drilling imminently.

There’s many many to cover but I think that covers some of the main ones at this point.

This article Metal Tiger PLC Q&A: Exploration Update for Kalahari Metals (LON:MTR) was written by DirectorsTalk Interviews.


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