CSS - Clean Seas Seafood

[tge oracle]

Re: CSS - Clean Seas Tuna

There is no keeper Pixel, by that I mean there is no underwriter to this opportunistic raising. I note this is being pitched to retail investors with no mention of participation by institutional shareholders or the Stehr's and that's because , I believe , they wouldn't participate.
This sudden Cap raising also brings in to question the profitability of the YTK business.
They say they only need $5M, I bet they wish they could ask for more, problem is, that would spook the market.

Disc - Not invested, opinion only

In connection with my earlier post, I note that the share purchase documentation has been issued.
I am surprised that this offer is not underwritten considering their optimistic predictions for the CSS , in particular, the YTK business. I also note that the SP is languishing at the offer price which doesn't bode well for full participation.
My main question would be if things are so great why are the major investors left out with only mum's and dad's being asked to stump up?
Another observation is the numerous errors made in the initial SPP advice announcement , which had to be subsequently corrected on the ASX. I can't help thinking that this SPP was put together in such a hurry, without warning, that they couldn't even get the grammar right.

Disc - not invested, opinion only.

 

[Sdajii]

Re: CSS - Clean Seas Tuna

My main question would be if things are so great why are the major investors left out with only mum's and dad's being asked to stump up?

The major investors are smart and well-informed enough not to bother.

Even if only a tiny proportion of the shareholders take this up they'll raise all the capital they're trying to get. The main reason for this might just be to make it look like investor sentiment is strong, because "Hey look, the SPP was oversubscribed!"

It's not a big capital raising they're doing, it just seems like they're doing what CSS always does: playing silly games.

If CSS dumped its pie in the sky tuna game it might even do okay, but it seems they've already pumped too much into it to be willing to turn back now. Some have said this is too big to fair... I think failure is inevitable, but it's too big to put an end to it before it fails.

Goes without saying, but... Disclosure: Not holding CSS.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

My fascination and interest in aquaculture, particularly Tuna propagation, and CSS's current valuation has prompted me to commence accumulating.
I was considering waiting until next year but didn't expect the valuation to drop to these levels.
It is very hard to ascertain the true value of CSS, however, I do see value in the YTK business and infrastructure assets. Brokers appear to apply a book value of around 15c. I am not applying any value to the SBT business but there could be intrinsic value in the scientific knowledge recorded/documented over the past few years.
JEF gave an optimistic outlook for 2012 and beyond which is encouraging as he has a respected reputation in the business community and is unlikely to make statements he doesn't believe are factual.


Disc - commenced accumulating CSS.

 

[nizora]

Re: CSS - Clean Seas Tuna

JEF gave an optimistic outlook for 2012 and beyond which is encouraging as he has a respected reputation in the business community and is unlikely to make statements he doesn't believe are factual.

Who is JEF ?

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Who is JEF ?

Nizora,

Sorry, I thought most would realise I was referring to John Ellis-Flint ,CSS Chairman of Board Of Directors, that's the problem when using acronyms.
The AGM ( Annual General Meeting ) was held yesterday. The text of his address is on ASX announcements.
His history and background is on the CSS website.
I only hope they can secure the services of a CEO of his calibre. There is no reason why the YTK business can't be run profitably and efficiently under good stewardship.
A good CEO will not surprise the market with unplanned Cap Raising's such as the latest. They knew the SBT project will require substantial funds. I was concerned that YTK was falling behind again, however, JEF reported that sales are growing and ahead of budget so this is why I decided to start accumulating yesterday.

Make no mistake, CSS is still a very risky proposition but I do believe they are starting to slowly head in the right direction.

disc - Invested in CSS ( accumulating ). Opinion only, not based on any factual information, just my intuition.

 

[nizora]

Re: CSS - Clean Seas Tuna

Nizora,

Sorry, I thought most would realise I was referring to John Ellis-Flint ,CSS Chairman of Board Of Directors, that's the problem when using acronyms.
The AGM ( Annual General Meeting ) was held yesterday. The text of his address is on ASX announcements.
His history and background is on the CSS website.

Thank you tge!

 

[tge oracle]

Re: CSS - Clean Seas Tuna

In reference to my earlier post re-CSS valuation , I have applied the following estimates. ( Pls Note - My valuations are not based on any factual information. The CSS valuations are itemised in the annual report )

1. Property / Infrastructure - $ 15M ( CSS - $ 30M )
2. Biological Assets ( SBT / YTK stock ) - $ 10M ( CSS $ 16.6M )
3. Non current assets ( leases/licences etc.) - $ 5M ( CSS - 13.1M )
4. intangible assets ( research/goodwill etc ) - $ 0 ( CSS - 15.3M )
5. Cash on hand - $ 7.3M ( CSS- $ 7.3M)

My valuations apply virtually no value to the SBT side of the business in all of the above areas. These valuations will amplify considerably with SBT commercialisation or a significant improvement in YTK production and sales.

Note - Invested in CSS ( accumulating ) . My opinion only, DYOR.

 

[nizora]

Re: CSS - Clean Seas Tuna

The major investors are smart and well-informed enough not to bother.

Even if only a tiny proportion of the shareholders take this up they'll raise all the capital they're trying to get. The main reason for this might just be to make it look like investor sentiment is strong, because "Hey look, the SPP was oversubscribed!"

It's not a big capital raising they're doing, it just seems like they're doing what CSS always does: playing silly games.

Not holding CSS.

Why would anyone bother to subscribe when you can get it cheaper from the market??

 

[Sdajii]

Re: CSS - Clean Seas Tuna

Why would anyone bother to subscribe when you can get it cheaper from the market??

That's a good question now. They only reason would be if they pulled a carrot out before the deadline. I imagine that's what they'll do, and buying now is probably a good trading opportunity. Enough people will go for the plastic carrot for you to sell at a profit before they bite the carrot and say yuck. It's a little tempting, but I haven't followed them closely enough to be sure enough that it will all go that way. CSS has always been prone to putting out stupid announcements which are nothing but hot air, but there are always enough stupid people around to fall for it, at least briefly. It looks like a very likely time for it to happen. I can't see it pumping up much above where it is now though, and I'd say it'll be the usual yearly sequence - they'll hype things up around spawning time, get people excited, price goes up, they exaggerate things - last season was "Oh wow, we put fish in the ocean and they froze to death! AMAZING PROGRESS!" the season before was "We did the same thing we did last year! We can't prove that if we hadn't killed them all stupidly they might have lived and been salable (oh, and no, it's not that we lied about all the fish being dead, we just are too stupid to notice thousands of dead fish rotting for a week or so, yeah, just shut up and believe it, everyone!) AMAZING PROGRESS!" and the year before it was similarly stupid. No real progress has been made for about four years, but they always claim amazing leaps and bounds. There are probably fewer people left to fool this year, and people are very risk averse at the moment. It'll be an interesting one to watch anyway.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Nizora / Sdajii,

You are quite right in your observations. Firstly, I don't believe the Cap Raising will be well received with very low participation by retail investors. It will be interesting to see if they have a plan B i.e. institutional/major investor underwriting the shortfall.
Everything you say is correct Sdajii, they have cried wolf too many times over the years for investors to be sucked in again. CSS has been very poorly run and managed on all levels, in particular, corporate governance. If they don't appoint a quality CEO who is not influenced by other's within and around CSS the future will be bleak. To restore any sort of credibility they will have start with the new CEO.

The stakes are high, hence the low current valuation. They have to succeed this season with either SBT propagation with an outcome that will lead to commercialisation or YTK profitability for the whole entity ( not just the YTK business itself ).

Part of the reason I have decided to accumulate is that their business and assets would be attractive to a potential suitor at these levels. There is money to be made from YTK if the business is well run and managed. TGR have been doing it for years with Salmon and Southern Star with Kingfish.

Disc - as per previous post.

 

[nizora]

Re: CSS - Clean Seas Tuna

Nizora / Sdajii,

You are quite right in your observations. Firstly, I don't believe the Cap Raising will be well received with very low participation by retail investors. It will be interesting to see if they have a plan B i.e. institutional/major investor underwriting the shortfall.

Disc - as per previous post.

Sadly : Clean Seas Tuna Limited advises shareholders that the Share Purchase Plan announced 2 November 2011 and which closed on 2 December 2012 raised $1,621,500 (20,268,750 shares in total) before costs at a subscription price of $0.08 per share.
The Company is encouraged by the extent of shareholder support considering the challenging market conditions and the fact that the company’s shares traded at or slightly below the offer price of $0.08 for the majority of the offer period. Directors thank shareholders for their continuing support.

 

[kingkev]

Re: CSS - Clean Seas Tuna

Sadly : Clean Seas Tuna Limited advises shareholders that the Share Purchase Plan announced 2 November 2011 and which closed on 2 December 2012 raised $1,621,500 (20,268,750 shares in total) before costs at a subscription price of $0.08 per share.
The Company is encouraged by the extent of shareholder support considering the challenging market conditions and the fact that the company’s shares traded at or slightly below the offer price of $0.08 for the majority of the offer period. Directors thank shareholders for their continuing support.

Well that was to be expected.....why buy at 8c when you could get them cheaper. I got another parcel under 8c and just happy to accumulate at this time. Expecting a result soon on their progression of fingerlings and earlier spawning.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

If only CSS were as good at running a viable aquaculture company as they are at putting out BS and spin.

They have totally mis-read the reason for the Cap Raising shortfall. Investors are no longer prepared to commit more funds without results.
The reason the share price fell below issue price had nothing to do with market sentiment this was specifically CSS sentiment driven, investors have had enough.

This season will be crucial and the poor response sends a very strong signal to them that the game is up. They have to turn this company around this season one way or another.

Note - Invested. Ceased accumulating. Awaiting further information on CEO, BFT spawning and YTK sales ( profitability ). Opinion only. DYOR.

 

[kingkev]

Re: CSS - Clean Seas Tuna

If only CSS were as good at running a viable aquaculture company as they are at putting out BS and spin.

They have totally mis-read the reason for the Cap Raising shortfall. Investors are no longer prepared to commit more funds without results.
The reason the share price fell below issue price had nothing to do with market sentiment this was specifically CSS sentiment driven, investors have had enough.

This season will be crucial and the poor response sends a very strong signal to them that the game is up. They have to turn this company around this season one way or another.

Note - Invested. Ceased accumulating. Awaiting further information on CEO, BFT spawning and YTK sales ( profitability ). Opinion only. DYOR.

Must agree TGE,

If they bring out ann like unexpected mortality rates because of xyz.........and any other hint of negativity, the sp could easlily be 5c. This spawning and growout season is going to be crucial to their survival. Holding tight for now

 

[Sdajii]

Re: CSS - Clean Seas Tuna

I'm sure they have misread nothing. Their grasp of the facts is presumably fine, but as always their public story and spin is a little different from the fairly obvious reality. Their spin really is wearing thin. They can hardly say "Gee, everyone has lost hope and we're really in a pickle now!" can they?

I don't really see this season as crucial for the SBT project, I think that was really two years ago (they needed much better progress than they got) which might (but still probably wouldn't) have allowed for some successful growouts in the season just gone. With the project developments, currency rates, global food prices and the overall global economic situation, the SBT project is really dead in the water, and now is high time to accept that and focus on the possibility of running a successful YTK business. There is just so much working against the SBT project, and no real progress has been made for years (even if they claim 'amazing progress' when they manage to keep four fish alive in a fish tank for a few months or throw a few fish out into an ocean pen to freeze to death... wow, fantastic job, guys, you're just about there, I'm just so inspired).

If they do get it to work it will be fantastic, but the chances of green 0 coming up on the roulette wheel are higher, and the rewards are much greater (though admittedly, so is the negative result, but not by as much as the positive). You also don't have to wait so long for the result and there is probably less spin in roulette than CSS. At what stage do you accept defeat and change strategy? The SBT project is one stubborn man's dream (in his own words), which is fine, but why anyone else would want to invest in that at this stage is beyond me. I'd literally much rather stick my money on the roulette wheel.

The spawning will probably go well again, and they'll put positive spin on any results (heck, a couple of years ago they put positive spin on an early 100% mortality rate!), a couple of years ago that would have caused a spike in the share price and a good trading opportunity, but I think anyone who was likely to be fooled by them crying wolf has already heard the cry and been fooled now, so nothing much will happen without solid results, and I really can't see them coming.

Having said that, if against incredible odds they get a good commercial harvest of SBT in the coming season and it turns out to be economically viable, as unethical as the company is, it will be pretty exciting to see.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

Sdajii,

I think it will be crucial in the sense that unless they can move toward commercialisation this season they will have to abandon or dramatically reduce the scale of the SBT project. It is unlikely investors will continue to fund this project on the present scale of operations.
If they don't succeed with progress toward commercialisation they will need to focus on the YTK business.
There was an interesting program on Huon Salmon recently. This business is family owned and is 2nd in size to TGR. This company was started by a Sheep/Cattle farmer and his wife a few years ago. They knew nothing about aquaculture, however, they learned and persevered and now have a multi million dollar business.
It is a sad indictment on CSS with their wealth of aquaculture knowledge and experience that they can't even run a profitable YTK business.
I only hope they can secure the services of a competent CEO who will put a broom through the place and turn this business around.

Disc - As per previous post.

 

[Bigukraine]

Re: CSS - Clean Seas Tuna

just a short note from me living on the EP, the fingerlings going out to the sea pens

may already be doomed before they start.....it looks like on long range weather forecast's we (like last year) will be in for a cool summer and an indicator from mother nature is a type of water fowl (run around the ground like a chicken) has been spotted by me for the first time and upon asking a neighbour of twenty odd years this is only the fourth time he has seen them and a wet summer has always followed...
have to wait and see what happens but won't hold my breath ....

 

[Tysonboss1]

Re: CSS - Clean Seas Tuna

This business is family owned and is 2nd in size to TGR. This company was started by a Sheep/Cattle farmer and his wife a few years ago. They knew nothing about aquaculture, however, they learned and persevered and now have a multi million dollar business.
Disc - As per previous post.

Is this the show you talked about



Salmoning farming is a tried and prooven profitable enterprise, What css is involved in is much different.

To be honest I can't see why people who want exposure to this sector would choose css over a company like Tassal,

At Tassal's Current price it is trading below book value of it's current assets, with an OK (but growing) return on equity, and it's pe is below 8.

Why invest in unprooven, hype and hope when other things are available so cheaply.

 

[tge oracle]

Re: CSS - Clean Seas Tuna

BigU / Tboss1

Firstly, i wouldn't be too concerned about the air temp in SA over summer, the most important factor will be the temp of the Leeuwin current which flows across the Bight to SA/VIC during the summer months. By all accounts the Indian Ocean/ North WA temps are at normal levels. This will be the main influence on SA water temps over summer.

As for the program, this is not the one I was referring too. It was screened a few weeks ago on one of the current affair/morning shows and featured Ray Martin as the presenter. It focused more on the husband and wife who started Huon Aquaculture from nothing ( they were sheep/cattle farmers ) having no knowledge or experience with aquaculture and building it up to a multimillion dollar business.


disc - CSS ( as before ) . TGR - Invested.
Agree with TGR sentiment, I am invested, but YTK is a viable business also if properly run and managed. Southern Star have been successfully farming and marketing YTK for many years. It is privately owned so no actual figures are available, however, it's longevity suggests it is very profitable.

 

[kingkev]

Re: CSS - Clean Seas Tuna

Are we going to get an ann before Xmas?????????? Not sure.....By bringing forward the sbt spawning by 6 weeks maens that something should be happening around this time.

Waiting for a Xmas present..............hopefully not smelly fish that died in the spawning or growout process.