Fox Marble - a recovery buy?...

ITM Power – I was watching (at 17:39) – Final results & a whopper placing (with Snam). Read from Peter Brailey HERE

But hasn’t marble quarrier in Kosovo and the Balkans Fox Marble (FOX) been a long-term disappointer now? Well yes says long-term shareholder Tom Winnifrith… but we suggest recently announced depressed half-year numbers but recovery signs could mean a material  and rapid recovery from a now depressed £6.5 million market cap...

Barclays sees more opportunities than threats. Chris Bailey writes HERE

“Sales for the half year were €0.2 million (2019 - €1.0 million)” doesn’t inspire confidence and, after a net €0.79 million of new equity, cash was €0.78 million (+€0.20 million over the six months), other current assets €5.14 million (+€0.03 million), current liabilities €1.31 million (€1.82 million lower) and non-current liabilities €4.81 million (+€1.98 million). However, the performance reflected “the prominence of China in the block marble market meant that sales of block marble showed a sharp drop from the start of 2020”… and “since the half year sales have shown improvement, with €0.4 million of revenue recorded to date… Sales agreements worth in excess of €1.8 million signed for processed marble to be supplied to projects in Kosovo over 2020 and 2021”.

The Greek Tragedy playing out as Global Reset beckons. Read from Nigel Somerville HERE

There is currently stopped production at the Maleshevë quarry in Kosovo as a result of an ongoing dispute. However, there is significant resource potential from the operating Prilep in North Macedonia and Cervenillë and Syriganë in Kosovo. The Maleshevë dispute has seen the company file civil claims in Kosovo and a wider Arbitration case against the Government of Kosovo. The latter, United National Commission on International Trade Law arbitration proceedings, is for damages in excess of €195 million. That may take years to resolve but Fox is very confident in its case and “anticipates a fair and satisfactory resolution” – any progress towards this is likely to be very material for the shares given the current valuation here. This will be litigation funded so means no cash outflow for Fox and we do not expect it to get anything like €195 million but we do expect a multiple of its market cap. And there should be news on this front within weeks which will drive a share price re-rate.

Photo Article HERE: Vassilios Carellas of Arc Minerals finds an LSE Poster hiding in his tent

It also though highlights the risks of where the company is operating – but, as a still significant investor, progress is continuing to be made; for example, “for 2020, two new potential quarries were identified and after initial examination of the resource the company secured the licence over one new quarry site”. There is good margin available on production and demand increasing – and the latest results statement suggests those are increasing from the depressed first half. We firstly look for run-rate revenue to exceed last year’s and then a move towards profitability highlighting the operationally geared profit potential here. Meaningful profit in relation to even the current market cap may be a year+ off, but we expect signs that the company is getting there to spark the shares from here – we note, for example, they were above 3p as recently as May. Therefore at a current 2.1p offer price and up to 2.3p, targeting a swift return to 3p buy.

This article first appeared on HotStockRockets – for a new hot share tip from the HotStockRockets team OUT JUST NOW THIS AFTERNOON for just £5.50 click HERE

Filed under: Fox Marble, ITM Power, Barclays, Global Reset, Vassilios Carellas, HotStockRockets

2020-10-23 11:50:00

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