Originally posted by sabine
Thank you pb,
Not least for the bolded letters which are very reassuring . (Now I am replying to your text I scroll up to see what you wrote and that sentence jumps out and makes me very happy ... although as a disclaimer I was. already a bit euphoric from a gluten and dairy feast today.)
....The sentence is still there : )
I am not at all pessimistic either clear.png
(I blame Pioupiou and KKLL for the gluten - everyone should know by now I am hair trigger suggestible and the whole thing escalated from thoughts on ‘hlaf a loaf is better than none’ through to history’s bakers rightfully being kings of the world seeing as they owned the ovens people bought their dough to before taking home ‘the bread ‘....
To how
we now own the biggest stress-relieving oven furnace in the world Australia, and how, etymologically speaking, I ‘ord’ my NWH shares ......and NRW makes dough for me, which means it is my “hlafdige”!*
(....At this point I need to say I love it for its beautiful mind as well as it’s sex appeal and alchemical kitchen creations.)
*This of course puts us at the cutting edge (the very blade of the bread knife so to speak ) on modern discourse on gender terminology!
And that was before I had looked up the free bread culture of the Roman Empire ( thanks
@KKLL!)
Well it is no coincidence the baguette, from a bakery called ‘Regal’(!), said “eat me”.
Which makes me a servant I think
@Pioupiou as well as an oxymoron (for the active idle curiousity.).
And euphoric too...
And it is still there pb : )
I like the way you say things.
..but am still a bit confused about what you said re the cashflow/imcome situation as it relates to Gascoyne Resources.
The loan - extending payment terms to around 75 days was made in December so Gascoyne could meet working capital requirements
... https://www.asx.com.au/asxpdf/20181224/pdf/441h7thn06gvjp.pdf
Implying there will be no December cash flow from Gascoyne?
... the $324 million contract divided by six years averages at $54M a year. Less a few costs, that comes down to quarterly payments of about $12M ..
So there may be a $12 million cashflow shortfall on what was expected?
The company anticipated revenue of about $500 million, EBITDA around $70 million, and earnings of around $45 million.
As $12 million has most likely been removed from the December income, the glass half-emptiest of all would be to take it directly off the earnings?
That would bring them down to $32 million vs $22.5 million as at end of calendar year 2017.
We were trading around $1.60 after the interim results last year .
Given all that has been achieved elsewhere and how unfairly low the price has been recently the fund managers looking for ‘the crack’ would, in my opinion, be very hard to penalise the company if there is a reported shortfall on these lines.
The $12 million cashflow from Gascoyne is just delayed not deleted (or we get a gold mine) plus there will be interest payments coming to us from here on in.
Also we are looking all the brighter now for the earnings downgrades elsewhere.
And didn’t all the broker upgrades appear
after NRW announced the payment extension and loan?
Cheers
position was expected it would be hard to identify this but yes $12m less than otherwise is likely in H1
"the glass half-emptiest of all would be to take it directly off the earnings?"
Yes, or take off a risk adjusted amount - e.g 50% chance of GCY paying up in short notice, so take $6m off. This only makes sense to me if there was a number of these scenarios in play and you were looking to be add them up and work out some kind of aggregate probable outcome. AJM's CR means it seems good for now, and as we've discussed here the industry outlook is positive.
1. How close to the line is NRW going for cash now? (Given it bought RCR for cash and looking at the trajectory from FY2018 I'd say it's all good.)
2. How comfortable am I as an investor that there is no systemic problem propping up? (Samsung was a disaster, but aside from that NRW seems really focussed on long term relationships but also doing profitable work only. Witness the way they have maintained margins while also winning high profile contracts with well established clients. GCY and AJM are struggling to become profitable however, but represent a strategic push for NRW big pushes into gold and lithium, giving some tolerance for a little more risk. We saw with Empire Resources that their desire to win work has some bounds. All up I'm very comfortable that NRW are approaching this the right way for us shareholders. No risk at all = no reward).
Also, short term cash not being an issue, NRW has collateral for the GCY loan (which I'd expect would yield at least some cash eventually if all went pear shaped).
)and the story just got worse and worse .
(20min delay)
