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Bill Graham's avatar

First of all, thank you! And secondly, best wishes for the holidays and 2025!

CRPR and MACF have been on my watchlist for a VERY long time, but I have never bought. CRPR is now off. The Cropper family own c40% of the shares, so any action would need their agreement, and giving up 200 years of family commitment may be a little hard. Also the recent events at ZTF have made me think hard about the technical developments here. Can CRPR see theirs to full fruition? Possibly not. On the positive side, their premises sit in some of the most expensive real estate in the UK outside London, so there is always an asset underpinning here.

Your analysis of MACF seems to me to be spot one, though that may be confirmation bias! Decent management, excellent acquisitions, and niche products sum up the company well. You may well have tempted me off the fence here!

Thanks again, and very best wishes.

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Boon Koh's avatar

Hi Bill! Thank you for your best wishes, and hoping you're having a great holidays, and on to a greater 2025 as well.

CRPR - while both ZTF and CRPR had hype around their new technologies, I think CRPR is further advanced. Correct me if I'm wrong, but they did manage to generate good ££ sales in 2022-2023 from their hydrogen PEM eletrolyzers. So their technology is proven, and clients have already bought it, and tangible ££ generated. They also don't have any manufacturing niggles, and they've also just finished investing in expanding their manufacturing capacity.

ZTF is a different story. Their Rezorce technology has had no ££ sales yet to a customer, and they also have no at-scale manufacturing yet.

In CRPR's case, their woes in Advanced Materials are purely down to market demand for hydrogen PEM electrolyzers. After a brief flurry of investment by the market into Green Hydrogen production in 2022-2023, GH is now no longer in fashion as a green energy storage solution. Not quite sure why; its not my area of expertise. However, I note that the Labour government have allocated specific monies towards Green Hydrogen. And maybe it might come back in fashion?

Thanks for flagging their real estate. I did see that they had £6.7m of freehold land and buildings - do you think these are at-cost values and therefore the current market values are multiples higher? In which case CRPR are trading well below NTAV at the moment... and therefore covenant risk is MUCH lower...

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Bill Graham's avatar

Hi again; and thanks again! My reckoning is that the property should be valued at well over the that £6.7m. They sit in the middle of a National Park where building opportunities are limited, so converting the mill to holiday lets would be massively profitable. (Though I hope this never happens!)

You have done your research and am much better informed than I. As a result, my scepticism is receding.

In an aside, I would not write off hydrogen power yet. There is still no green alternative to diesel buses and lorries. Battery technology has yet to achieve anything worthwhile in this area. However, about five years ago or so each and every one of the bus depots and parks in Northern Ireland was fitted with hydrogen storage facilities, and at no small coast. Around a third of the fleet is hydrogen powered, mainly covering urban routes. This augers well for the future, I think.

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Bill Graham's avatar

I think you may have been hacked.

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Boon Koh's avatar

Did you see a comment where the name was "The Boon Fund"?

I had another case yesterday. It turns out to be just social fraud engineering - someone created a Substack account called The Boon Fund and posted replies to your comment.

In Substack, comments can't be made by publications (ie The Boon Fund). Only by individuals (ie Boon Koh). But you can obviously create an account that has the name of a publication as the First name - Last Name format.

Looks like Substack managed to delete the account, as the comments have now disappeared.

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Bill Graham's avatar

I got an invitation to subscribe to some trading scam through Telegram. I got exactly the same message through Paul Scott's substack too, so you are in good company! Thanks for sorting this.

As an aside, have a look at SNR: PER=12; PEG=0.6; announced this morning they will be largely unimpacted by tariffs. A couple of years back there was a 200p takeover bid (rejected) and not so long ago this was around 180. There are potential problems as they supply to Boeing and Airbus, but these seem surmountable. I am a long term holder, but added further this morning.

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Boon Koh's avatar

Interesting.. in the past on Senior, I've always just passed on by as it seemed expensive given the low operating margins and ROE. But its gotten much better in value now.

I see that broker forecasts for FY25, FY26 have been steadily declining over the past 2 years.. why is that? Have they been having headwinds already pre-Tariff?

I've added it to my to-do list to have a deeper dig into Senior. Thanks for bringing to my attention!

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Bill Graham's avatar

The decline in estimates are possibly due to the impending sale of the aerostructures division. It has been in the pipeline for a while. There were also suggestions of a general downturn in the sector, but these seem to have receeded. Build rates have increased across the industry. This is unlikely to fly, but I can see a 25% rise in the next twelve months.

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