SFG - Seafarms Group

[beatle]

Re: COZ - CO2 Group

Just to put out a short comment re COZ. As a side note to a previous ASX release COZ indicated that it would put out its financial statement about 28 Nov. Don't be surprised to see a reasonable improvement in financial performance, based on its Carbon Bank establishment in April 2011. If that does occur then we might find COZ starting to move up a bit, so trading at current prices might be an opportunity!

 

[beatle]

Re: COZ - CO2 Group

COZ holding up pretty well today in a difficult market. One thing that hits home to me at the moment with lots of stocks out there, is that you really have to be a stockpicker, noting that any company that isn't due to either report something in new business or excellent results in what it does will come under price pressure. What I like about COZ is that it has a lot of things going for it at the moment:
1. The govt has provided a means for COZ building new business with the major carbon emitters, and those emitters will have to consider their alternatives to simply paying $23/tonne of carbon dioxide emitted from July 1 next year - certainly this will result in many companies considering COZ as one of those alternatives.
2. Carbon Banc trading from April 2011 in the carbon space, aggregating carbon credits from small credit providers to sell to major carbon emitters.
3. Consultancy services within the carbon dioxide emission/sequestration space (as per the Tassie govt announcement the past week).
4. Minesite rehabilitation.
Etc etc.

And COZ making its latest financial result early next week might provide some insight as to how these new business initiatives could improve COZ financial return. A very interesting time for shareholders and onlookers.

 

[beatle]

Re: COZ - CO2 Group

A good financial outcome for COZ announced today for the last financial year, with after tax profit of $1.5 million, on substantially increased turnover of . Especially knowing its only just starting for the company, and great to see that the revenue has increased appreciably despite the real deals yet to announced re carbon sequestration for the top 500 or so carbon dioxide emitters.

A summary of the financial year result:
• Record revenue of $35 million - up from $27 million in F2011 (15mths)
• NPAT of $1.5 million
• EBIT of $2.2 million
• Earnings per share of .52 cents
• Record cash position at November 2011 - $35 million and no debt (ie cash backing of 8 cents per share!).

 

[beatle]

Re: COZ - CO2 Group

I assume that news for COZ will remain slow over the coming couple of months, as businesses slow down for the Christmas period. Only once companies get back to work in late January will it become evident to some that they must consider bio-sequestration as part of the mix of cutting down carbon emission liabilities due from 1 July 2012.

Thus getting set now in COZ, on a slow building up of stock is what I consider to be a smart strategy, and what I am pursuing personally. The stock is not so liquid at the moment and thus building a holding is a s-l-o-w process, but I believe it will be rewarding running up to July next year, particularly as new deals are announced.

 

[beatle]

Re: COZ - CO2 Group

COZ trading isn't slow, its more like non-existent! Seems that its going to be very hard to build a largish position in the company in the coming months as sellers don't want to sell out at too lower price! I have been waiting (im)patiently with my bid slightly below the current price and nothing, not even on gloomy market days. I might have to readjust my buy in price soon as I'm concerned that I won't get enough at my preferred price - but when I up the bid to 17 cents seems that there are sellers at that level. I can see its going to be a long time building a position, but I think we have a few months before the fireworks begin, so patience is a virtue!
(I tossed up whether I should post this but decided that I would do so even if it adds to the competition, but I do want to confirm that I remain bullish on COZ having started to post on COZ in recent months).

 

[beatle]

Re: COZ - CO2 Group

Whilst not a price sensitive announcement COZ announced yesterday:

"CO2 Group voted Australasia’s best carbon company in leading Environmental
Markets Survey - Two of the world’s leading environmental markets publications, Environmental Finance and Carbon Finance,have named environmental services company, CO2 Group Limited (“CO2 Group”), as a winner in their annual market survey.

CO2 Group was voted “Best Project Developer” in Australasia in the Environmental Finance and Carbon Finance magazine survey which is the most closely watched poll of sentiment across the world’s carbon, renewable energy, weather risk, US emissions, and weather and catastrophe risk markets.

The survey results reveal those firms that clients, peers and competitors have judged to have provided the best service in environmental markets over the previous 12 months...."

The signficance of this in the lead up to July 1 2012 will be the recognition that COZ remains the leading provider of carbon credits in Australia. This will be a major consideration for the big CO2 emitters as they try to offset their liability to the tax of $23/tonne of CO2 emitted.

Whilst it hardly did anything to COZ' share price yesterday, it could be a very relevant consideration to price movements for the company in the months leading up July 1 next year.

 

[beatle]

Re: COZ - CO2 Group

Yesterday was a great day for us trying to accumulate shares in COZ, with some holders weakening in the face of the gloomy outlook for the market and dropping just over 400,000 shares at 15.5 and 16.0 cents, predominantly the latter. Thank you very much, I got some of those shares and will be holding tightly - my shares effectively are filed away in my bottom drawer for rosier times in the coming years to come

I can't see COZ making any news for the next few weeks over the festive season so there its still possible to get some more before the activity heats up in the first few months from around Feb next year. That's my view anyway, and that's why I'm accumulating at present.

Good luck COZ holders (any other posts and views are welcome of course!)...

 

[Applebyte]

Re: COZ - CO2 Group

Good luck COZ holders (any other posts and views are welcome of course!)...

Certainly very exciting times ahead for COZ, and I'm in it to win it

 

[beatle]

Re: COZ - CO2 Group

Great to read your post Applebyte, and let's hope we can share our thoughts with a few more posters on the COZ thread in the coming months. I am still in the process of acquiring more though, so my posts are not so frequent at the moment, and also there is little news happening - I expect that more happening once business gets back to work from around mid-Feb 2012 when deals are being closed between COZ and the various major CO2 emitters.

Merry Christmas all.

 

[beatle]

Re: COZ - CO2 Group

Yesterday's trading in COZ was improved, with more shares finally coming out at a reasonable price. I'm still slowly accumulating but if it starts to move higher from here its ok with me, I have got quite a few now and can't wait for the first of the many new deals that I expect for COZ with the bigger CO2 emitters in Australia that should be announced within the next few months. I guess its still a couple of months for those deals to be concluded, so there is probably some time to go before it takes off and still an opportunity for stock pickers to get set. I'm almost there, especially after some shares coming out yesterday, but I will take a few more if you want to help me out, lol.

 

[beatle]

Re: COZ - CO2 Group

COZ had a day in the sun a couple of days ago, now its gone back to sleep, lol! I guess it will have an increasing number of days when there is activity as time moves towards deals being done with various CO2 emitters.
I will continue to pick up shares as time goes by and when the frustrated holders decide to sell out at this cheap price (IMO!).

 

[beatle]

Re: COZ - CO2 Group

COZ trading the past few days has continued to be docile, except for a rush of blood by one frustrated seller who eventually dumped a swag down from 15.5 cents through to 14 cents in the one transaction! Wow, he would be pretty peed off if he considered the news put out by COZ's only direct competitor in the carbon sequestration space, CCF. I copy that ASX release below for your consideration, which paints a very rosy picture for the industry as a whole (and COZ is likely to get its fair share of the pie, especially since its actually the bigger of the two companies, has more carbon expertise on board and a much stronger balance sheet with around $30 million cash in bank and no debt on its books!).

CCF Announcement of 10 Jan 2012 (the shares have skyrocketed up 9 cents, ie 46% at the time of this post!). The implications for COZ are very exciting and take note CCF's expected EPS in 2012/2013/2014 - they are humongous projections!

"CARBON CONSCIOUS FORECASTS $3.5M NET PROFIT AFTER TAX FOR 2012
Dear Sir
Carbon Conscious encloses a Company update including 2012 earnings guidance to the market.
HIGHLIGHTS
• Projected $3.5 Million NPAT is 309% increase on 2011
• Projected EPS 4c, 122% rise
• $9.4 Million current cash at bank
• $1.5 Billion in term sheets under consideration with clients
• NPAT targets of $14 Million & $23 Million in 2013 & 2014
Australia’s leading carbon forest sink project developer Carbon Conscious Limited (ASX: CCF) forecasts its net profit after tax (NPAT) will rise 309 per cent to $3.5 Million for the year to June 2012.
This represents earnings per share (EPS) of 4 cents, based on forecast sales revenue of $16 Million (up 129 per cent) for 2012 and EBITDA of $4.6 Million (up 285 per cent).

These forecasts are based on the Board’s expectation that Carbon Conscious will complete its 2012 planting program of 10,000 hectares to sequester carbon and claim carbon credits. The 2012 planting program is fully supported by Origin Energy’s recent exercise of planting options. The Company is targeting planting programs of 20,000 hectares in 2013 and 30,000 hectares in 2014. On achieving these targets Carbon Conscious should achieve a $14 Million and $23 Million NPAT respectively, resulting inEPS’ of 16 cents in 2013 and 26 cents in 2014.

Carbon Conscious has $9.4 Million of cash at bank as at 31 December 2011."

COZ is looking very good when you consider this announcement by CCF!!!

 

[skc]

Re: COZ - CO2 Group

By and large these guys are paid to plant trees in order to benefit from a tax regime. Sounds way too similiar to many investors (rightly or wrongly) to Great Southern, Timbercorp, FEA, GNS etc etc.

The big difference is that with CCF and COZ, it's large companies like ORG and WPL giving them the cash.

CCF will be a great trading stock for some time. COZ you thought will have at least a pulse on the back of CCF today, but it has a big goose egg in volume so far.

 

[beatle]

Re: COZ - CO2 Group

Hi Skc, you are correct that COZ buziness does revolve a lot around the newly imposed carbon tax, but it does derive a number of its deals through government instrumentalities that seek a new clean energy future and encourage industry to provide for such a future with incentives (and penalties!).

The comparison with the likes of Timbercorp etc that you mention is not a good comparison and unfair, actually puts a slur on COZ that shouldn't be there since it is providing for a complete gamut of carbon businesses related to carbon sequestration, environmental management of industrial and mining sites, consulting etc, as well as providing a means for the selling of carbon credits both for the bigger investor and the retail joe public.

COZ didn't react to the CCF announcement yesterday and it surprised me, and actually was off a cent with a small trade at 15 cents. I expect that COZ will start moving higher in the coming months once the market realises its likely huge deal flow with the carbon tax liabilities looming for Australia's 500 major carbon dioxide emitters!

 

[skc]

Re: COZ - CO2 Group

Hi Skc, you are correct that COZ buziness does revolve a lot around the newly imposed carbon tax, but it does derive a number of its deals through government instrumentalities that seek a new clean energy future and encourage industry to provide for such a future with incentives (and penalties!).

The comparison with the likes of Timbercorp etc that you mention is not a good comparison and unfair, actually puts a slur on COZ that shouldn't be there since it is providing for a complete gamut of carbon businesses related to carbon sequestration, environmental management of industrial and mining sites, consulting etc, as well as providing a means for the selling of carbon credits both for the bigger investor and the retail joe public.

COZ didn't react to the CCF announcement yesterday and it surprised me, and actually was off a cent with a small trade at 15 cents. I expect that COZ will start moving higher in the coming months once the market realises its likely huge deal flow with the carbon tax liabilities looming for Australia's 500 major carbon dioxide emitters!

I am not comparing COZ to Timbercorp. I am saying some investors compared them to Timbercorp (perhaps wrongly). The exposure to regulatory risks however are definitely comparable... i.e. they have no business if the tax enviornment changes.

I think CCF and COZ are such new companies the economics are not very well understood. Applying a PE to CCF's projected profit is a no brainer... but I doubt that's how it should be done. From what I understand CCF's Origin deal is a biggy but much of that profit is booked upfront and wouldn't be ongoing. One needs to see the details of the deal and do valuation based on future deal flows + any annuity style income. Details that I haven't yet locate.

 

[suhm]

Re: COZ - CO2 Group

I don't quite get why CCF is forecasting so much higher profitability from a given land bank than COZ their business models are a bit opaque but it does seem like ccf has received the money up front to buy its land 8.1m being spent for the land bank.

It is all a bit opaque

 

[beatle]

Re: COZ - CO2 Group

Hi Suhm, yes your comment about it being a bit opaque does have a lot of relevance to this space in total! I do understand that when COZ reinvented itself to become an authorised carbon credit provider it did use a model not dissimilar to that used by CCF now. But it decided that it is very capital intensive, thus decided to take on leasing arrangements with landholders for land that had limited other users, and has adapted its model to suit. This ensures that COZ is not in continual need for capital. Thus the recent reason for CCF to put out that guidance on future profits, bearing in mind it was not able to get its previous capital raising away successfully.
COZ on the other hand has a considerable cash reserve, for not I'm not sure of, but certainly it doesn't have a need for more capital with the model it employs. I do suggest that if both go well then CCF will have the potential to move considerably higher due to the lower shares on issue and the lower admin overheads, whereas COZ has the safety of a large cash reserve and considerable in-house knowledge re all facets of the carbon trading and associated consulting requirements. My view is that COZ will be a safer bet - if CCF for instance can't raise cash easily then it could be left behind or could face a cash shortage when its required to sustain or grow the business.

Skc, you are of course stating the same issue as Sumh, re lack of clarity re the carbon business model. I believe the issue that both COZ and CCF face are trying to maintain confidentiality whilst they build their business at this very important initial stage of their developments with the new legislative due to be enacted from July 1 this year. But as regards to annual allocation of their contracts I believe that they negotiate fairly long period into each transaction of say no less then 10 - 15 - 20 years, bearing in mind the fact that new forests only start to produce the carbon credits in about year 3. And our mate Tony Abbott, ala Mr No, is confusing the business landscape by vowing to rescind the legislation if elected. Of course its doubtful he could ever do so since the Greens will inevitably hold the power in the Senate, and anyways Mr No probably doesn't want to remove the tax, but just look like he wants to remove it! Thats politicians for you, at the end of the day they don't give a damn apart from their own egos!

 

[skc]

Re: COZ - CO2 Group

COZ on the other hand has a considerable cash reserve, for not I'm not sure of, but certainly it doesn't have a need for more capital with the model it employs. I do suggest that if both go well then CCF will have the potential to move considerably higher due to the lower shares on issue and the lower admin overheads, whereas COZ has the safety of a large cash reserve and considerable in-house knowledge re all facets of the carbon trading and associated consulting requirements. My view is that COZ will be a safer bet - if CCF for instance can't raise cash easily then it could be left behind or could face a cash shortage when its required to sustain or grow the business.

COZ has market cap ~$73m and cash ~$17.5m. CCF has market cap ~$22m and $9m cash. So not too sure about your interpretation of their relative cash situation.

Skc, you are of course stating the same issue as Sumh, re lack of clarity re the carbon business model. I believe the issue that both COZ and CCF face are trying to maintain confidentiality whilst they build their business at this very important initial stage of their developments with the new legislative due to be enacted from July 1 this year. But as regards to annual allocation of their contracts I believe that they negotiate fairly long period into each transaction of say no less then 10 - 15 - 20 years, bearing in mind the fact that new forests only start to produce the carbon credits in about year 3.

I don't know whether it's lack of clarity or just my own lack of time spent on reading it up... if you can point to a source that explains it, it would be much appreciated.

And our mate Tony Abbott, ala Mr No, is confusing the business landscape by vowing to rescind the legislation if elected. Of course its doubtful he could ever do so since the Greens will inevitably hold the power in the Senate, and anyways Mr No probably doesn't want to remove the tax, but just look like he wants to remove it! Thats politicians for you, at the end of the day they don't give a damn apart from their own egos!

This I am also not so sure. You'd thought with what's happening in the parliment these days the voting public would learn (to not invite the Greens to any party). Then again, the voting public has a pretty short memory in general.

I suppose it is times like these that you get to buy shares well below their "if-everything-worked-it-would-be-awesome" price.

 

[beatle]

Re: COZ - CO2 Group

Hi Skc, in reply to some of your questions/comments:

Unfortunately I've not been able to find an easy way to cover the information regarding this new carbon market, but firmly believe that if you do the work by starting going through the past COZ and CCF ASX announcements you will find that its very possible that there is money to be made in such an investment!

Re cash positions, COZ had a Nov exercise of options, raising another $17.9 million and added to previous cash they have in fact around $34.5 million cash at bank and no debt. ie almost half the market cap is represented by cash!

With CCF they do make a comment in the latest guidance that they have $9 million cash, but if you look at the prospectus re the failed rights issue they had a negative working capital amounting to around $1.5 million, so I have a feeling that the "cash position" is not a net cash position - noting that they have bank facilities in place to assist with their activities. Thus the reason I have said that whilst they are more geared to success they are also more prone to suffer from a lack of cash for supporting sustainence/growth! Apparently the failed rights issue has another 90 days to bed down the $2 million raising via placement, and since its needed to fund the 2012 planting its an important cash requirement - this suggests to me that the $9 million cash position they refer to is not strictly net cash as you might think it is!

I am not saying that CCF isn't a good investment, just noting that its more geared and thus has more risk to it. Certainly getting some contracts away could see them shoot for the moon! And from my reading of it, the management are more entrepreneurial with their marketing, alas! But I do like the fact that the Chairman of COZ holds a considerable share investment in COZ! Close to 50%!

Yes the vagaries of politics, but actually the Greens, like them or not, have tended to control the senate vote re carbon tax and most likely will hold control in the future parliament.

 

[beatle]

Re: COZ - CO2 Group

COZ remains ho-hum, hardly ever trading and if it does either at 16 or 17 cents, nothing much to note about it. But as an interesting observation, I note that the AGM will be on 24th Feb. What is so interesting about that you may ask. Well, and I don't know if its a coincidence or something more than that, the past few years within a couple of weeks of the AGM the share price has gone through a bit of a resurgence on increased volume! It will be interesting to see if it happens again this year, but then again its about the time I would imagine the price will be increasing with the likelihood of a new contract being anticipated by the market as time moves closer to July 1!