Cantseethewoodsforthetrees
21 Aug 2017
Re: Yesterday's ST Deepsleeves,I have no interest in RM2, palletts, etc but such co. mismanagement seems to be a regular feature of AIM cos and yet another warning sign for PIs to double/treble check just what they're investing in and to be aware that there is a much greater risk in this less-regulated sector.'Caveat emptor' was never so appropriate!Good luck.
deepsleeves
21 Aug 2017
Re: Yesterday's ST Cantsee....Given that the concept of a trackable plastic pallet was not new nor invented by RM2. The idea of choosing to manufacture in the low cost environment of Canada was ridiculous and the fascination with production volumes in RNS since the IPO frankly absurd.It makes you wonder what Molson, Rose and Walsh ever actually achieved at Molson M&S and Diegeo if they could be taken in and continue to support this company.The hype on the IPO was outrageous and should have been investigated by the FCA.You also must wonder how Woodford got so involved in this shambles.Deep
Cantseethewoodsforthetrees
21 Aug 2017
Yesterday's ST Woodford-backed AIM darling faces crunchThe Sunday Times - Business20 August 2017Peter EvansAn AIM-listed maker of plastic pallets faces a cash squeeze after a series of blunders by an all-star board of directors, including the scion of an international brewing empire and the former bosses of Marks & Spencer and Diageo.RM2, which invented a plastic pallet that is stronger than wood and can be tracked around the world using a microchip, has burnt through more than £130m since listing on AIM three years ago.It had reserves of $2.7m (£2.1m) at the end of May and was forced to tap existing investors, including the star City fund manager Neil Woodford, for $20m in June.At its current cash burn rate, it is understood RM2 will be able to keep the lights on for the next nine months, but it does not have the funds to buy new stock. Its existing stockpile is not enough to fulfil the large volumes of orders it hopes to receive.The situation is acutely embarrassing for RM2’s high-profile board, which is chaired by the beer magnate Ian Molson and includes ex-Marks & Spencer boss Lord (Stuart) Rose and former Diageo chief Paul Walsh as directors.Molson, who chaired the executive committee of his family’s beer company until a 2005 merger with rival Coors, said an attempt to manufacture the pallets inhouse had been a “terrible mistake” and admitted the “decision to take the company public had been problematic and premature”. RM2’s shares closed on Friday at 6p, having floated at 88p.
deepsleeves
03 Aug 2017
CEO for a month Must be some sort of recordDoes not say much for the selection processDeep
deepsleeves
25 Jul 2017
Re: Equity offering cancelled. LankieI do not think there is any "IF" about RM2 being short of cash. Without further funding raising they will be unable to pay for the 3rd party manufacturing they have on order or plan to order .Seems like the partners do not trust them much and require payment up front or by LC and who could blame them.Seems like Woodford is in so deep he couldn't get out if he wanted to..Deep
lankie
25 Jul 2017
Re: Equity offering cancelled. Weird !If the company is short of cash how is it not in the best interests of the company to raise equity finance ?If consultation with key investors has revealed little appetite to invest further then that's a different matter.There is so little information coming out of this company that one becomes more and more sceptical about the creadability and integrity of management . The only positive is Stuart Rose's position on the Board and his track record. Also Neil Woodford as an investor would be deemed to be positive but he's had some spectacular duffs recently.
deepsleeves
24 Jul 2017
Equity offering cancelled. One does wonder if"the Board has concluded that the best interests of the Company and its shareholders would not be served by completing the current proposed equity offering"is management speak for nobody interested at the prices we want/need?What happens next if RM2 cannot fund the sub contract production?Deep
deepsleeves
03 Jul 2017
Re: Results And my comment to Lankie about roosting pigeons seems to be just about spot onDeep
deepsleeves
03 Jul 2017
Re: Results PreemptiverightFascinatingCannot say results were not announced as I have just checked via my Barclays Stockbrokers account and there they are - not good from iiiCan see why RM2 would not be shouting about them to muchCash burn 2nd half of the year was $11M after exceptional items apparently and so the $20M should last through 2017 provided the lower cash burn of the 2nd half 2016 continuesTurnover hardly movedPallet pool increased 15% which sounds ok or by 35k units which is the proverbial drop in the ocean Last food business I worked in had £10m turnover and shipped out 400 pallets/day which would require a pool of about 9k pallets on a 3 week cycle - so an additional 35k units is not exactly great.Lets not forget about the new CEO - initially sounds great working for Bramble/Chep but deep down he is an accountant and most recently another merchant bankerSuspect RM2 will be back cap in hand next yearGood luckDeep
preemptiveright
03 Jul 2017
Re: Results Results out on Friday along with another round of fundraising. $20m convertibe preferred shares being placed. Flat revunes, cash at 31st May 2017 - $2.6m. Cash burn for 2017 so far of $1.4m per month. Outlook:"The Directors have analysed the Group's situation and applied their best estimates to assumptions of the future development of the business. The Group acknowledges that there are currently material uncertainties which may cast significant reservations on the Group's ability to continue as a going concern and it is possible that the Group may be unable to realize its assets and discharge its liabilities in the normal course of business. Nonetheless, subject to the uncertainty related to the coming fundraising, the Directors are confident that the Group will have adequate resources to continue its operational existence for the 12 months period starting from December 31, 2016, and accordingly, continue to adopt the going concern basis in preparing the consolidated financial statements."
deepsleeves
03 Jul 2017
Re: Results Could be pigeons coming home to roostDeep
lankie
02 Jul 2017
Results Shouldn't their results have been published last Friday ? Any reason for the price drop ?
lankie
19 May 2017
Any news The price is drifting on no news. I presume the results are out on 30 June. Any reason for the price drop ? Are the rules whereby no news can be released for a period before announcing results?
JB1234
31 Mar 2017
What does it do? RM2 has devised a more durable glass fibre and resin pallet which lasts longer than traditional wood products, many of which break after a few trips or are riddled with bugs. It currently has 500,000 pallets deployed in the market. The company floated in January 2014 with half its market cap in cash and board members including former Diageo (DGE) boss Paul Walsh. Credibility problem Last year RM2 said customer feedback had prompted it to change the friction coating method from powder to a gel-based system. This would make it better for health, hygiene and safety needs. The company then admitted it wasn’t cost effective to manufacture pallets in Canada, despite having already built a large factory. Unsurprisingly, the share price collapsed. ‘We over-estimated the ability to mass produce at a reasonable price,’ confesses chief executive John Walsh in an interview with Shares. How has it fixed the problem? RM2 struck a deal with two well-known manufacturers to set up new factories on its behalf in Mexico and China, taking equipment from its Canadian plant. ‘We didn’t develop a fully automated production process. It wasn’t cost effective to have human intervention in Canada, but it does work in Mexico and China where labour is cheaper,’ explains Walsh. Mexican production could become live within the next two months, we understand. Chinese operations should follow in early 2017, although there have been delays importing the kit. A deal has been struck with AT&T (T:NYSE) to install chips in pallets so customers can track and trace their goods in transit. Walsh believes earnings visibility will soon improve as it keeps winning new business. He hopes by mid-2017 to be able to tell the market how new pallets will be deployed out to the end of 2018. RM2 expects to rent out 85% of its pallets on three to five year agreements and sell the remaining 15% of production. Key risks include further delays to the Chinese plant start-up, potential fundraising and slow pace at which contracts are fulfilled. The business hasn’t been very transparent in the past with contract awards, so it must improve communication. (DC)
JB1234
31 Mar 2017
Not posted on this site before but been a keen reader of what everyone's thoughts are since the IPO. Came across this piece in the shares magazine.
