Duyuru • Jan 18
Velocys Announces Cancellation of Admission to Trading of Shares on AIM from 18 January 2024 Further to the announcement made by Velocys on 17 January 2024 that the Court-sanctioned scheme of arrangement in relation to the recommended cash acquisition by Madison Bidco Limited of the entire issued and to be issued share capital of Velocys had become Effective, Velocys announced that, following an application to the London Stock Exchange, the admission to trading on AIM of Velocys Shares has been cancelled with effect from 7.00 a.m. 18 January 2024. Duyuru • Dec 06
Velocys to Cancel of the Admission to Trading of its Shares on AIM The boards of directors of Madison Bidco Limited (‘Bidco’) and Velocys plc (‘Velocys’) announced that they have reached agreement on the terms and conditions of a recommended cash acquisition by Bidco of the entire issued, and to be issued, ordinary share capital of Velocys. It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the 2006 Act. Velocys Shares are currently admitted to trading on the AIM. Applications will be made for the cancellation of the admission to trading of Velocys Shares on AIM and steps will be taken by Bidco following the Acquisition becoming Effective to re-register Velocys as a private company. New Risk • Oct 31
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: UK£4.79m (US$5.81m) This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-UK£14m free cash flow). Share price has been highly volatile over the past 3 months (13% average weekly change). Revenue is less than US$1m (UK£254k revenue, or US$308k). Market cap is less than US$10m (UK£4.79m market cap, or US$5.81m). Minor Risks Currently unprofitable and not forecast to become profitable over next 3 years (UK£15m net loss in 3 years). Shareholders have been diluted in the past year (18% increase in shares outstanding). New Risk • Oct 20
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of British stocks, typically moving 12% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-UK£14m free cash flow). Share price has been highly volatile over the past 3 months (12% average weekly change). Revenue is less than US$1m (UK£254k revenue, or US$309k). Minor Risks Currently unprofitable and not forecast to become profitable over next 3 years (UK£15m net loss in 3 years). Shareholders have been diluted in the past year (18% increase in shares outstanding). Market cap is less than US$100m (UK£19.5m market cap, or US$23.7m). Major Estimate Revision • Sep 28
Consensus revenue estimates decrease by 68%, EPS upgraded The consensus outlook for fiscal year 2023 has been updated. 2023 revenue forecast fell from UK£1.62m to UK£510.0k. EPS estimate increased from -UK£0.011 to -UK£0.01 per share. Energy Services industry in the United Kingdom expected to see average net income growth of 23% next year. Consensus price target of UK£0.19 unchanged from last update. Share price fell 12% to UK£0.011 over the past week. Duyuru • Sep 21
Velocys plc Provides Financial Guidance for the Year 2023 and 2024 Velocys plc provided financial guidance for the year 2023 and 2024. Financial results for the full year 2023 are expected to trend in line with results reported for first half with an increase in revenue expected to be seen in 2024 following completion of the project funding and as the pipeline crystallises. Reported Earnings • Sep 21
First half 2023 earnings released: UK£0.006 loss per share (vs UK£0.004 loss in 1H 2022) First half 2023 results: UK£0.006 loss per share (further deteriorated from UK£0.004 loss in 1H 2022). Net loss: UK£9.23m (loss widened 80% from 1H 2022). Revenue is forecast to grow 68% p.a. on average during the next 3 years, compared to a 6.7% growth forecast for the Energy Services industry in the United Kingdom. Over the last 3 years on average, earnings per share has increased by 1% per year but the company’s share price has fallen by 41% per year, which means it is significantly lagging earnings. New Risk • Jul 26
New major risk - Financial position The company has less than a year of cash runway based on its current free cash flow trend. Free cash flow: -UK£21m This is considered a major risk. With less than a year's worth of cash, the company will need to raise capital or take on debt unless its cash flows improve. This would dilute existing shareholders or increase balance sheet risk. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-UK£21m free cash flow). Earnings are forecast to decline by an average of 0.3% per year for the foreseeable future. Revenue is less than US$1m (UK£241k revenue, or US$312k). Minor Risks Currently unprofitable and not forecast to become profitable over next 3 years (UK£16m net loss in 3 years). Share price has been volatile over the past 3 months (11% average weekly change). Shareholders have been diluted in the past year (18% increase in shares outstanding). Market cap is less than US$100m (UK£27.2m market cap, or US$35.2m). Reported Earnings • Jun 30
Full year 2022 earnings: EPS and revenues miss analyst expectations Full year 2022 results: UK£0.009 loss per share (further deteriorated from UK£0.008 loss in FY 2021). Net loss: UK£13.2m (loss widened 56% from FY 2021). Revenue missed analyst estimates by 77%. Earnings per share (EPS) also missed analyst estimates by 10%. Revenue is forecast to grow 43% p.a. on average during the next 3 years, compared to a 8.6% growth forecast for the Energy Services industry in the United Kingdom. Over the last 3 years on average, earnings per share has increased by 24% per year but the company’s share price has fallen by 40% per year, which means it is significantly lagging earnings. New Risk • Jun 09
New minor risk - Shareholder dilution The company's shareholders have been diluted in the past year. Increase in shares outstanding: 18% This is considered a minor risk. Shareholder dilution occurs when there is an increase in the number of shares on issue that is not proportionally distributed between all shareholders. Often due to the company raising equity capital or some options being converted into stock. All else being equal, if there are more shares outstanding then each existing share will be entitled to a lower proportion of the company's total earnings, thus reducing earnings per share (EPS). While dilution might not always result in lower EPS (like if the company is using the capital to fund an EPS accretive acquisition) in a lot cases it does, along with lower dividends per share and less voting power at shareholder meetings. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-UK£21m free cash flow). Share price has been highly volatile over the past 3 months (12% average weekly change). Earnings are forecast to decline by an average of 2.6% per year for the foreseeable future. Revenue is less than US$1m (UK£241k revenue, or US$302k). Minor Risks Currently unprofitable and not forecast to become profitable over next 3 years (UK£16m net loss in 3 years). Shareholders have been diluted in the past year (18% increase in shares outstanding). Market cap is less than US$100m (UK£37.9m market cap, or US$47.6m). Reported Earnings • May 19
Full year 2022 earnings: EPS and revenues miss analyst expectations Full year 2022 results: UK£0.009 loss per share (further deteriorated from UK£0.008 loss in FY 2021). Net loss: UK£13.2m (loss widened 56% from FY 2021). Revenue missed analyst estimates by 20%. Earnings per share (EPS) also missed analyst estimates by 10%. Revenue is forecast to grow 43% p.a. on average during the next 3 years, compared to a 8.7% growth forecast for the Energy Services industry in the United Kingdom. Over the last 3 years on average, earnings per share has increased by 24% per year but the company’s share price has fallen by 13% per year, which means it is significantly lagging earnings. Price Target Changed • Nov 16
Price target increased to UK£0.37 Up from UK£0.15, the current price target is provided by 1 analyst. New target price is 647% above last closing price of UK£0.05. Stock is down 57% over the past year. The company is forecast to post a net loss per share of UK£0.0095 next year compared to a net loss per share of UK£0.0078 last year. Major Estimate Revision • Sep 28
Consensus revenue estimates fall by 82% The consensus outlook for revenues in 2022 has deteriorated. 2022 revenue forecast decreased from UK£2.20m to UK£400.0k. Forecast losses increased from -UK£0.01 to -UK£0.01 per share. Energy Services industry in the United Kingdom expected to see average net income growth of 12% next year. Consensus price target of UK£0.37 unchanged from last update. Share price fell 10% to UK£0.048 over the past week. Reported Earnings • Sep 22
First half 2022 earnings released: UK£0.004 loss per share (vs UK£0.002 loss in 1H 2021) First half 2022 results: UK£0.004 loss per share (further deteriorated from UK£0.002 loss in 1H 2021). Net loss: UK£5.14m (loss widened 182% from 1H 2021). Revenue is forecast to grow 92% p.a. on average during the next 3 years, compared to a 9.0% growth forecast for the Energy Services industry in the United Kingdom. Over the last 3 years on average, earnings per share has increased by 43% per year but the company’s share price has only increased by 28% per year, which means it is significantly lagging earnings growth. Board Change • Jun 23
Less than half of directors are independent Following the recent departure of a director, there are only 3 independent directors on the board. The company's board is composed of: 3 independent directors. 4 non-independent directors. Independent Non-Executive Director Tom Quigley was the last independent director to join the board, commencing their role in 2021. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model. Reported Earnings • May 19
Full year 2021 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2021 results: UK£0.008 loss per share (up from UK£0.011 loss in FY 2020). Revenue: UK£8.28m (up UK£8.11m from FY 2020). Net loss: UK£8.44m (loss narrowed 4.0% from FY 2020). Revenue missed analyst estimates by 1.1%. Earnings per share (EPS) exceeded analyst estimates by 8.2%. Over the next year, revenue is expected to shrink by 73% compared to a 4.5% growth forecast for the industry in the United Kingdom. Over the last 3 years on average, earnings per share has increased by 84% per year but the company’s share price has only increased by 15% per year, which means it is significantly lagging earnings growth. Price Target Changed • Apr 27
Price target increased to UK£0.37 Up from UK£0.15, the current price target is an average from 2 analysts. New target price is 535% above last closing price of UK£0.058. Stock is down 9.5% over the past year. The company is forecast to post a net loss per share of UK£0.0085 next year compared to a net loss per share of UK£0.011 last year. Board Change • Dec 31
High number of new directors Independent Non-Executive Director Tom Quigley was the last director to join the board, commencing their role in 2021. Major Estimate Revision • Dec 16
Consensus revenue estimates fall by 15% The consensus outlook for revenues in 2021 has deteriorated. 2021 revenue forecast decreased from UK£9.93m to UK£8.40m. Forecast losses increased from -UK£0.01 to -UK£0.01 per share. Energy Services industry in the United Kingdom expected to see average net income growth of 8.0% next year. Consensus price target of UK£0.37 unchanged from last update. Share price fell 11% to UK£0.071 over the past week. Board Change • Nov 01
High number of new and inexperienced directors There are 5 new directors who have joined the board in the last 3 years. The company's board is composed of: 5 new directors. 1 experienced director. No highly experienced directors. CFO & Executive Director Andrew James Morris is the most experienced director on the board, commencing their role in 2017. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Executive Departure • Oct 07
Senior Independent Director Sandra Nan Shaw has left the company On the 30th of September, Sandra Nan Shaw's tenure as Senior Independent Director ended after 1.8 years in the role. As of June 2021, Sandra Nan still personally held only 551.09k shares (UK£29k worth at the time). Sandra Nan is the only executive to leave the company over the last 12 months. The current median tenure of the management team is 2.75 years. Reported Earnings • Sep 26
First half 2021 earnings released: UK£0.002 loss per share (vs UK£0.004 loss in 1H 2020) The company reported a solid first half result with reduced losses, improved revenues and improved control over expenses. First half 2021 results: Revenue: UK£8.24m (up UK£8.06m from 1H 2020). Net loss: UK£1.83m (loss narrowed 33% from 1H 2020). Over the last 3 years on average, earnings per share has increased by 115% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Reported Earnings • May 18
Full year 2020 earnings released: UK£0.01 loss per share (vs UK£0.019 loss in FY 2019) Full year 2020 results: Net loss: UK£8.80m (loss narrowed 8.5% from FY 2019). Over the last 3 years on average, earnings per share has increased by 110% per year but the company’s share price has fallen by 24% per year, which means it is significantly lagging earnings. Reported Earnings • Sep 19
First half earnings released Over the last 12 months the company has reported total losses of UK£7.96m, with losses narrowing by 21% from the prior year.