I haven't been posting, since nobody wants an ex-holder to clog up the forum of a stock one currently holds with constant negativity. And of course I am negative; that's why I sold
If you are going to constantly complain about management and a stock, just sell and nick off. That's my motto. I read everything here with interest though.
In hindsight, the time to sell would have been when the cutting of the energy reseller division was announced -- a condition of Palisade Impact's financing due diligence; on the road to SA1 and VIC1 funding. Unfortunate timing, as it came just days after shareholders had been waiting for 12 months for financing news.
Another 12 months with Palisade due diligence. Another four (?) or so months with the wheel having turned full circle and back to finding financing -- with interest rates significantly higher than virtually zero mid-Covid. StockyBonbon is correct that Dec/Jan is a quite period with people on leave. That is nobody's fault. However, if these projects were so lucrative, with the ESG focus as well, they
would have been financed by now.
I was willing to look through a lot of delay and even poor decision-making. Eventually EmptyTrolly's narrative of 'only listing in 2021 to avoid insolvency due to poor contracting terms for NZ and BLM' came to the fore. I concluded that information released to market was designed to delay and obstruct rather than to genuinely inform. Too tricky with language for my liking. The online webinar sessions with Q&A for shareholders came to a stop. These guys did NOT want to deal with shareholders. Although I was encouraged to hear a poster here rang the company and received a call back from either Hamish or Joe after the suspension from quotation happened.
Even this time last year, Hamish was saying that by June 2023 we'd have three projects in-build (YVW, SA1 and VIC1) however Palisade must have been wavering (at least privately) and YVW hadn't even received the final government approvals (and they weren't due until at least September, I think LongCleanEnergy revealed) so mid-2023 construction was never going to happen. We knew nothing about the 12 months exclusivity term with Palisade Impact. DEL was still promising SA1 and VIC1 being 'in build' or 'in construction' a couple of weeks prior to PI withdrawing. So did they see the withdrawal coming? Was it incompetence or spin? Energy Retail was shut down for nothing, with Palisade gone. Back to square one. I came to suspect the various project statuses don't mean anything.
In Construction just means they've decided to build a site, rather than actually having blokes in hi-viz vests with shovels in hand on the site daily. The yellow 'long term development pipeline' icons on the homepage map are a joke. VIC2 disappeared without a trace. QLD1 keeps getting pushed forward another 9 months or so without explanation. The real problem, in a nutshell, is they just lost momentum. They had a moment in early '21 with positive announcements and were like an AFL team winning their last five games straight to sneak into the top eight. All that has long since gone. They supposedly listed (it was in the prospectus) to raise money to fund SA1. They money went on opex and to prop-up BLM and NZ. Too much double-speak and no transparency.
The auditor's note in last year's annual report about the company's viability as an on-going concern was a worry too.
There's the $5m in convertible notes mentioned. And the principal and hefty interest owed to RoadNight for the large scale energy generation credits (which I don't fully understand). Presumably that means actually generating your own renewable energy rather than talking about it, promising it, or re-selling grid (coal and gas) energy under the Delorean name. And then getting the money returned as you generate the power. With an expiry date for the credits, I presume. A bit of a problem when you're claiming to be a leading Australian renewable energy company and won't generate any until probably late 2025 at the earliest. I don't know how they get this money back without having energy generation to off-set it. Brickworks has been 'in continuing progress' for about 2 1/2 years. In the meantime, Brickworks has signed long-term gas supply contracts with another company. YVW will almost certainly get built. The contract contain inflation provisions. However, even for experienced companies, delivering on-budget, and margins on EPC contracts is tricky. It's one, big $50m bet which could be lucrative (you'd certainly give it a shot if you were running DEL) or could be costly with delays and cost over-runs. It potentially makes the 4C quarterlies look good in the meantime but that money comes in one door, out the other, as it's used to buy materials and pay workers rather than actual profit earned.
At the same time, renewable energy conference and seminar appearances ground to a halt. You never see videos of Hamish or Joe. No appearances on podcasts. All that stopped in early '22. They aren't buying these super-cheap shares themselves; rather they collect their nice salaries and have enough owners' equity to ensure they can't be removed. If management aren't buying shares after a 90% drop, why should I?!
I am quietly surprised they returned from the trading suspension last year. I thought it was game over. I'm glad I was wrong.
I sold in May last year for 3.1 cents (from memory). Despite all I have written, I would like to buy back at 15+ cents with a couple of operational sites, funding secured, on-going revenue streams, and 'a return to profitability' as Hamish put it a few months ago. Not just a headline, but real profitability. DEL has some good technology and, presumably a core group of knowledgeable professionals who can plan and build these incredibly time-consuming and difficult projects with multiple parties involved. Unfortunately, until a BOOM site is completed and has been operational for six months we can't be sure if the real-world, on the ground practicalities, translate to the profitability, in Australia, as projected by DEL's figures. Nobody has done it. Sure, they built RichGro, BLM and the NZ site, but there is no publicly-listed financial data, in Australia, for an operating site. I suspect this uncertainty and uneasiness is what has meant that only ONE financing company has agreed to participate (and later rescinded) in two plus years. Management have had one job -- to secure funding -- and have not delivered. They've had more than enough time.
At the moment, profitability of completed sites is too uncertain, management has no runs on the board, funding sources is uncertain (at best), and even if funding arrived today, SA1 and VIC1 wouldn't be operational until mid 2025 at the earliest. I don't currently see as DEL as an investment-quality stock, but would love to buy in at a $75m to $100m market cap after holders have 10-xed and are laughing at the new money piling-in at all-time-high stock prices. Hopefully that will be possible in the future.
Long posts like these are exactly why I post infrequently
(20min delay)
