They still appear to be burning cash at a fair rate. June cash position was £6.9 million where they had £10.2 the previous December, and that includes £4.1 million raised in May! The bond gives them another £5 million since then too. It is just as well that MeyGen is producing cash now to cover the cost of all this.
Brexit, and the doubts that must now surround future EU grant funding must be a part of the recent change in attitude towards this share. Any thoughts?
Posted on the Atlantis web site on 20th Sept. Excerpt below:
Tim Cornelius, Chief Executive of Atlantis, commented:
The first half of 2017 has been a very positive step forward for Atlantis and its portfolio of projects. The installation of the four turbines at MeyGen earlier this year, was achieved safely and in record time. We are extremely excited to see the final turbine, our AR1500, be reinstalled at MeyGen in the coming weeks and seeing the project complete its transition into full operations. MeyGen Phase 1A has already set a number of records, with over 2GWh of generation having been dispatched to grid, generating predictable revenue from ROCs and wholesale power sales from the PPA. This now allows us to consider a re-finance of the project to improve returns and liberate capital for new investment opportunities.
In addition, the first half of 2017 also saw us formally launch Atlantis Energy and the announcement as preferred developer of the 160MW tidal barrage and flood protection infrastructure project in the Wyre Estuary, England. We believe that this is the best pathfinder project in the UK to help demonstrate the benefits of predictable low-cost generation from a fleet of commercial scale tidal barrages across the UK. We are very excited to develop this project alongside the rest of our tidal stream portfolio throughout the UK, Europe, North America and Asia. There are number of very exciting projects being developed in South East Asia at present and we are well positioned to convert these opportunities into equipment sales and project development contracts.
Not reading anything ominous into that. He's staying till the end of the month so not being ghosted out due to any misdemeanour.
Tidal must be the way forward. Even if the sun ain't shinin' and the wind ain't blowin' the tide still ebbs and flows all day, every day, 365 days a year.
Bring it on, (as they used to say!)
At 8%, my only surprise is that the bond took so long to sell out. It is certainly a lot more than we the owners are likely to see for a long time to come!! Perhaps the month long bond buying period is a sign of caution by those investing?
Decided to take the hit and completely sell up today, a really poor outcome. Should have sold back in January but convinced myself this was a longer term prospect worth holding for a dividend stream.
I do not intend to become a bond holder and I cannot see a propsect of a yield nor an improvement in the share price anytime soon. When the bond is offering 8% over the next 5 years why would anyone buy the shares?
There is exciting value potental opening up in other stocks and I now have cash to invest.
As another poster said recently, sometimes you get sick of staring at your mistakes.
I share your worries. Cash is king and all that. Cash flow, or a lack thereof, must rank highly in the list of reasons why new products fail. I too would like to see a bit more caution on the part of ARL management with proof of concept, and at least some degree of organic, self funded growth.
Nice technology ARL, now make it work reliably, and make some money from it. Otherwise, what's the point?
Well I am more and more doubtful about this, ARL has a curious approach to its financial management. And I am not persuaded by the Abundance pr. This was a £5M 5-yr 8% bond launch because the company need to refinance, not a £2-5M let's suck-and-see offering which would be nice to have the cash so we can exploit the capital
To have only attracted £1M of investors on day 1 is awful, compare that with the WASPS 6.5% bond which sold around £25M last year. Fancy not being able to sell an ISA-wrapper approved bond at 8% !!!! No wonder they are having to run a 2-month sales campaign.
ARL will need massive investment in order to fund the many projects it has announced itself to be involved in, tens or hundreds of millions in the next few years, so this bond is almost a distraction. And it has failed, as I thought it was intending, to deliver organic self-financed growth using an accumulating income stream from power generation starting with Meygen, about which outtage we still have not been updated.
Unless a major investor with serious resources and proper management steps in I am beginning to worry about the future of ARL, and intend to sell out at the first sensible opportunity.
They say 8% is lower than their current debt, in fact it's the primary reason for issuing the bonds.
I've decided not to take part as "Abundance" are not abundant with information about the bond issue unless you make a deposit into your account.
If a company's in trouble its usually the bond holders that have to take a hair cut first.
It would be interesting to know the logic behind issuing bonds at 8% when borrowing is generally available at much lower rates. High interest rates are generally associated with a high risk of default, so what does that say about ARL?
I've started the process because 8% is not to be sniffed at. But it is quite time consuming and you've got to deposit your cash before you get to chose how you invest it. Still thinking about whether I'll go ahead.
On enquiry, unfortunately the bond will only be available to subscribe, hold and trade through the platform of the fund raiser Abundance (I nearly typed Ambulance there) where you would need to open a new account etc. There is enough risk in this already ...
So ARL are thinking of issuing £5M of bonds at 8%, to raise even more capital and to refinance some loans at harsh rates ... so that explains the bad news in the annual report that last year they blew £1M on interest payments on debts of around £10M.
Not sure this all makes me happy, firstly selling off a chunk of shares to Hyundai on the cheap which sliced the value of my holding, and now planning to pay a whopping 8% to new bond holders, presumably as an alternative to rewarding existing shareholders with a dividend anytime in the next 5 years.
I still like the idea of this technology and its potential, but I am not sure I like the way they are managing their finances nor the way they are treating shareholders.
Worth a punt, R ??
Wind doesn't blow all the time and solar isn't much good in the dark ! But the tide will ebb and flow roughly twice a day for as long as the human race will need it !!
The future's bright, the future's tidal :-))))
Twitter by ProActive yesterday, but can't find it now. It was regarding negotiations between ARL and the Duchy of Lancaster for a tidal flow project off the Lancashire coast. Will take about 3 yrs planning.
Good news if it comes off !!
If I can find it again I'll post link.
Luck all, TP
They talk about successful MayGen operation in Nov '16, but not the turbine removal earlier this year nor the consequences on income. Maybe that is a question for the AGM?
A bit disappointing, the long term success of this company rests on its ability to deliver power to the grid and earn a rising income. Definitely worth another read to work out why they are paying £1M a year in loan interest when they have around £10M cash assets, why they needed to dilute my holding without asking by issuing £4M new shares to Hyundai, what the financial outlook is etc. Not much to take away in terms of what I can expect from my investment.
Other events are all post-end and which should improve the balance sheet considerably.
PLC's should be able to set and meet expectations for when they report major events including interim and final reports on its finances. It is extraordinary to suggest that ARL could not have known the date of its annual report more than 1 day in advance, an auditor's services are well planned and are usually not the cause of a delay - except when they find problems!
Why are you making excuses for a multi-million pound company which ought to be able to do these things better, and as a listed company with public shareholders I would say it is obliged to be more informative and communicative?
Every well run public listed company is expected to do so, AIM and main market.
I am sure you are well meaning but what you have just posted is neither helpful or remotely correct.
What makes you think that they will know these dates in advance? The Annual Report will not be issued until the auditors have signed off (and that can not be planned for an exact date in advance) and the AGM date will not be announced until the Annual Report is available (because of the notice period required).
If only it did ... the awful website is actually announcing last year's results on 26 May 2016, when I was a whole year younger. Apparently it has no idea of what lies ahead. Even for AIM this is slack.
In conclusion, ARL's advisors Peel Hunt (with an aspirated "H" as in Jeremy), their team of public informationists including FTI Insulting, and the whole board are all very disappointing.
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