Edited notes from conf call
-Lowescroft: 20000 homes, $21m, and production fully ramped up
-Burry: 18000 homes, $14m, still in the middle of 12 week ramp up phase
-Cambridge: 20000 homes, $20m and starting aggressive 5 week ramp up phase. Possibility of realizing 60000 homes on this “soon”
-Each job has s a satellite office/ yard/ Project manager which they will be paying leases on for next 18-24 months. And is integrated into their costing and bidding process.
-All contacts include ramp up fees paid by City Fibre.
-Relations with City Fibre are excellent. Contracts contain wording that allows for increasing cost per house as long as there is empirical evidence that this is happening. Has happened once already, and City Fibre was amenable to these increase in charges (I forget which city)
-City Fibre has ALOT of work going forward, such that they are looking to setup their main contractors with a 7 year plan, so that proper and efficient costing and planning can occur. Carlo says that if they can prove out their quality with ability to scale, there is upwards of 600 m in work that is available in the next couple year(s)
-Covid has cut production in 1/2 right now, but pre March, they were looking at 1800-2000 homes per day per city on a running average. Topping out at up to 4000 homes per day per city, come September 2020... WITH COVID.
-Present Covid challenges, include 14 hour turnaround for asphalt, have to close in all trenching daily, food and living accommodations for some workers. But some competitors have slowed down so hiring so far hasn’t been a problem.
-Whole operation is cashed up, and credit line is indrawn. Expect to be $1.2 million cash flow positive by end of q4, with present workload. Could be pushed back, depending on expected increase in contracts.
-No untoward capes required. Have lots of saws and lots of blades. Will rent booms as required for above ground installs.
-This is a $20m market cap company (22m after the conference call), expecting a confirmed 53m in next 18 months. Of that 17 m by end of Q4, with 31-32% gross margin, and “high teens” EBITDA. SG&A in UK is 12% by Q4
Note: Carlos was adamant that margin will increase with more work.
-Personal Note: Carlos is confident that there is ALOT more work coming down the pipe. A lot of numbers we’re thrown out there, that I am not going to release here because it’s not official yet, and I don’t want to mislead anybody. But it is a complete turnaround from previous calls.
-Carlos hopes we were happy, as LTE had 2 employees in UK in November, and will have 200 by end of September.
-Canadian Ops is very competitive, and will maybe put out 3-5 million this year. Competitors are undercutting by as much as 20%. Carlos won’t chase it, if it doesn’t fit his models. But we are to expect some Successful local announcements sometime soon.
AI
