Hey all, I haven’t had a response over Friday and the weekend so here’s what I know. It’s not anything crazy but may shed a little more light.
CRH Ventures Deal- Did not fall apart, CRH just let it lapse. This does not signify bad relations between the two just that CRH decided not to proceed. The lack of communication has NOT been because they are in a crisis mode, there was just nothing more material FBR could say, it was purely just that CRH let it lapse for their own internal reasons. Because FBR was bound under the exclusivity clause this has meant that FBR was not able to pursue any further opportunities (in essence putting them in stasis) until it lapsed. Now FBR is free from that condition they are free to move forward with other opportunities which have arisen, like IP licensing. I did ask why there was no shareholder letter or conference call and they just didn’t have anything else to say which wasn’t explained. CRH for their own reasons let the period lapse without contacting FBR.
Lack of shareholder communication- The position is to update the market with material information, similarly they can’t make material updates until things are actually in play/sorted etc. As alluded to above no breakout communication to FBR just means it’s business as usual. And it sounds like it’s a very busy, business as usual which is good for us.
Builders- There is still great relations and ongoing dialogue with builders who are still showing incredible interest in FBR. They are getting more interest outside of the builders mentioned. Pulte still very interested. On this a KEY metric for US builders is cycle times. This is how many houses they can cycle through and is always noted on their financial statements. As HX can drastically improve this metric it is a key to builders generating more profits and a very positive way to lower cycle times. Pulte is very pro-technology and their technology estate even has things like bins being taken to the curb by robots which is just cool.
California- Currently looking at expansion there to take advantage of the current situation post wildfires. This is NOT a pivot away from Florida which is seen as the principal market still, it’s an extra opportunity.
Future Demos- FBR considers no more need for future demos, “the technology is now proven with builders and signed off by engineers for all builds without any issues”. That’s it, proven full stop. No more ‘it won’t work”, no more “expansion joints’, that’s it. Proven.
Marketing- They are approaching it from a business development perspective so they do not get ahead of themselves (like Icon has). They don’t want to promise the world and not deliver. They are taking a slower approach currently to conserve money and get it right so that adoption occurs in a more measured and financially beneficial way. They specifically don’t want a scenario where they build 100 homes like Icon then don’t get another contract afterwards. Too much interest = more risk, in essence.
Current state of HXs in workshop- The hold up has been confirming that everything is good to go in America. FBR kept them on hold in case they needed to be sent to a different market. Reading between the lines it sounds like they had a backup plan even for the trucks so with them moving forward in America I would expect an announcement soon for final completion, and then subsequent deployment.
Labour shortages in America- Ther is definitely anopportunity for FBR which is still being noted by US builders.
Samsung Heavy Industries- FBR was approached BY SHI after SHI had been looking “all over the word” for the technology they need, they were told “this is amazing and exactly what we need”. The IP licensing is GATED, which means that SHI will pay FBR before and during the IP licensing and adoption process. This is a new and alternative avenue for funding FBR into the future and contract negotiations are progressing. This is huge in my opinion as it's an even better way to get trucks funded for deployment into the states than FBR would ever have with CRH.
IP licensing- Have been approached from multiple entities across different industries outside of what FBR even considered, not just SHI, which are free to now be discussed and acted upon. To me it sounds like there is a significant opportunity here for meaningful revenue generation which we haven’t considered.
Funding- Very positive ongoing relationships. FBR has been approached by multiple entities, including a hedge fund seeking to engage them for use of their technology OUTSIDE of the states they are currently working in. FBR is being sought out, not the other way round.
Government Interest- There is still substantial Australian Government interest across both state and Federal jurisdictions. There is still ongoing dialogue. FBR are very keen to talk to American states as well. I suggested that they get Bill Pulte onboard and got a chuckle back, obviously they have thought about leveraging that relationship. Just reading today that Bill Pulte is trying to end the conservatorship of GSE’s in the US which would lower mortgage rates so that is a massive benefit for FBR policy-wise if it happens
Future Housing Fund Grants- FBR does not currently fit the requirements as the fund is designed to establish home building entities. However they have petitioned to expand the policy to also cover technologies associated with the building process. There is scope to for JVs with multiple building entities to fold them together which could then see FBR access grants from the fund under the current policy. There are other government grants which FBR can apply for and access however.
Employee feelings- It sounds like there is a certain level of excitement within the organisation now. Andrew very confidently and candidly said they are all really excited about what’s on the horizon and working hard to realise it. I didn’t get any impression that staff reductions etc are happening which is positive.
Investor relations- combative or abusive emails will not be responded to. I agree with this, Andrew Edge is rally intelligent and pleasant, and great to talk to and confirms that every decision that is made is absolutely made with investors in mind. I did raise the issue of announcements then leading to SP languishing and then retracting and the frustration we all have with this. I think the problem is that technological adoption is a slow rhythm, hopefully we can see more impetuous with positive announcement going forward.
Here are my questions: Have any US builds required rectification works?
Has truck chassis availability improved?
What is the status of the Hx’s being deployed to the US? Confirmed modules for left hand drive?
There is speculation regarding the last financials with 0.8 quarters of revenue left. Any comment? (A lot of speculation and worry surrounds this).
Has there been any consideration to a transfer of listing to the US market?
Did the Pulte build take more than a day?
Is a European entity still slated for establishment this year?
Has the CRH relationship renewed any new dialogue with Brickworks?
What’s happening with the Weinerberger multistage agreement?
Hope this sheds a little light. Cheers
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