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The 20 million Company with the potential revenue of 1 billion (HYR)     

chad - 03 Feb 2005 21:10

HydroDec Group (HYR) Has developed technology that allows contaminated oil to be cleaned and re-used. In todays environment this kind of company cannot be overlooked. It already has a fully-functional plant in Australia and another is due to be opened in around 9 months. Tipped in Shares magazine as a 'blue sky' stock. If the company manages to capture 1/2 of the market revenue could be as high as £1 billion.

Anyone holding who's as excited as I am?

Dynamite - 18 Feb 2005 11:46 - 2 of 103

Just bought into this share....They already process and clean 3000litres a day of extremely expensive contaminated transformer oil used to insulate electricity transformers. Their new plant will be able to process 20,000 litres a day. The total global reprocessing value of transformer oil, which lasts 25 years, is roughly £2 billion a year.

This share only has one way IMHO .UP!

Edited Press Release 14th February 2005


LONDON (Dow Jones)--The Board of HydroDec Group said Monday that it has committed the sum of GBP1 million to the construction of a new, larger HydroDec plant capable of processing up to 20,000 litres (per day) of speciality oils and/or chlorinated organic wastes as was envisaged in the Company's AIM admission document dated 25 November 2004.

The Company is in the process of finalising the design specifications and anticipates that plant construction will commence in Australia within six weeks, and the overall construction period will be approximately nine months. When fully operational, the new plant will produce a near seven-fold increase in HydroDec's processing capacity.

The Board is currently considering several potential applications for the new plant and will make further announcements as necessary.


(END) Dow Jones Newswires

chad - 18 Feb 2005 14:29 - 3 of 103

Good to have you onboard Dynamite. Nice to know someone else has spotted the potential of this one. Great long-term play.

Dynamite - 18 Feb 2005 16:02 - 4 of 103

I think the pace will gather as the year goes on and then everyone will be wishing they got in earlier :-)

doughboy66 - 18 Feb 2005 17:11 - 5 of 103

I have put this on my watch list,i agree the company looks to have a lot of potential.
DB66

FT - 20 Feb 2005 15:51 - 6 of 103

anybody got the company website and more information about technology and clients?

Exotoxin - 20 Feb 2005 16:41 - 7 of 103

Notes on the HydroDec™ Technology:

HydroDec™ technology was developed over 12 years by Australia’s Commonwealth Scientific and Industrial Research Organization (“CSIRO”). The fundamental key to HydroDec’s success is the HydroDec hydrogenation reactor (a patented modification of known oil refining technology). Essentially, “dirty” feed oil is passed through the HydroDec reactor under controlled conditions, contaminants are destroyed, and a “clean” feed oil is produced.

The reactor can be used as an oil re-refining system and/or a hazardous waste treatment system to destroy Persistant Organic Pollutants “POPS” (PCB, DDT, PCP, HCB and dioxins). When used to re-refine transformer oils, the re-refined HydroDec Superfine oil meets “as new” specifications. When used to destroy POP’s, all POP’s can be treated and virtually all the POP contaminant is destroyed.

In operation, there are no chlorinated or halogenated products or noxious by products from the process. The primary reactions occur in a closed loop. There are no combustion processes and no potential hazardous emission points from the process. Unlike incineration, the HydroDec process prevents the formation of dioxins or other hazardous by products. Being based upon standard oil refinery hydrotreatment processes and engineering, HydroDec’s process parameters are proven, reliable and scalable.

HydroDec Development Corporation Pty Ltd is the holder of a world wide exclusive licence for marketing and distribution of the HydroDec™Technology.

BACKGROUND TO HYDRODEC

HydroDec was incorporated in 2000 as a wholly owned subsidiary of Virotec International Ltd upon the Directors decision to commercialise the HydroDec Technology, which is an oil re-refining process designed to remove harmful contaminants, such as PCBs.

The HydroDec Technology is based on intellectual property comprising protected patents in Australia and certain other jurisdictions, and was developed by the Commonwealth Scientific and Industrial Research Organisation of Australia. HydroDec has entered into an exclusive global licence with CSIRO for the marketing and distribution of the HydroDec Technology.

At the current time, HydroDec operates one small plant in Australia under the Joint Venture Agreement with Oil Treatment Services Pty Ltd.


ABOUT THE HYDRODEC SALE

On 25 November 2004, Virotec announced that the Company had entered into an Agreement for the sale of its HydroDec Technology.

The agreement is conditional on the purchaser, Vert-Eco Group plc ("VRT" London Stock Exchange), receiving shareholder approval for the purchase.

The key aspects of the agreement are:

Consideration of approximately $18 Million (£7.0 Million) to be satisfied by:

(a) The issue of 60,000,000 shares in VRT to Virotec at 10 pence per share, (which will represent approximately 38% of the expanded capital of VRT). The shares will be issued upon completion of the Transaction

(b) The payment of $1.26 Million (£0.5 Million) in cash to Virotec,and

(c) The payment of $1.26 Million (£0.5Million) in cash to Virotec for the monies invested to date in HydroDec technology, which is the current book value of the asset

Following the sale, Vert-eco changed its name to HydroDec Group.

stockdog - 20 Feb 2005 17:12 - 8 of 103

Looks v. interesting - just the sort of scientific IP based product with wide applications to a world that has to change its attitude to the ecosystem.

Why would you choose HYR over its 38% holding original parent VRT, as a matter of interest. Doesn't the wider spread of VRT's operations make a more viable investment, since HYR have only 3,000 lpd capacity for another 9 months till the 20k lpd plant is commissioned - and that only in Oz.

Any prospects known of developing operations in Europe and/or US?

Any news on the amount of royalty payable to CSIRO and in which countries their patent is recognised? What competition are they open to outside Oz?

FT - the only website is still part of VRT's < < www.virotec.com >> - doesn't say much more than Exotoxin's post above.

Did I miss the critical entry point at around 15p in January, or is it still worth it at the now nearly 30p level? Hate to miss that early gain!!

Wish I hadn't come across this one to tempt me - no funds spare really. S'pose I'll have to empty my pockets to find some.

I have this feeling that next week's going to be spent glued to the screen on a number of issues - hope we get time to talk even so.

SD

Dynamite - 20 Feb 2005 18:35 - 9 of 103

A recent FT article says "the decision (to invest in the new plant)follows the success of its joint venture in New South Wales.The pioneering plant there uses its patented process to clean 3000 litres of oil a day AND IS BOOKED FOR SEVERAL YEARS"

A recent Durlacher note gave a short term target for Hydrodec as 50p and longer term 102p

stockdog - 20 Feb 2005 18:43 - 10 of 103

Thanks, as always, Di.

Where can one get hold of broker's notes?

SD

Dynamite - 20 Feb 2005 18:49 - 11 of 103

Don't know was just looking for the same. Nothing on Durlacher website.
Di

Dynamite - 20 Feb 2005 18:54 - 12 of 103

Looking at all this it's a bit confusing as I see it VTI are the parent co now with 38% shares in Hydrodec. VRT bought HYR and changed their name from Vert Eco to Hydrodec. I think this is right. Looking at VTI I think that there is huge potential there too not just the HYR bit but all the other products they have. I am seriously thinking of buying VTI as well. More research needed. Can anyone else add any info?
Di

stockdog - 20 Feb 2005 19:20 - 13 of 103

Di

It is confusinhg - I think you may be suffering from a touch of Vert Ego! Is that French for green with envy - TFC would know!

As I understand it . . .

Vert Eco (a shell listed on AIM in Aug '04 to acquire environmental type companies) bought via a reverse takeover Hydrodec Pty Ltd from Virotec (VTI, a water/environment chemicals diverse outfit in Oz) in return for £500k cash plus 60 million shares = 38% of enlarged Vert Eco cap, plus paid off £500k debt due from Hydrodec to Virotec. Vert Eco simultaneously placed 9 million shares for £1,035,000 cash gross.

Vert Eco changed its name to Hydrodec plc on closing the deal and listing of new shares on AIM 21st December 2004 - having now one operating subsidiary Hydrodec Pty with a single product.

So, Hydrodec plc (HYR) is interesting for its one operation and also for any further similar acquisitions it may make. With only £1m raised at placing, do they ahve enough working capital to grow as fast as they could worldwide - still just limited to Oz albeit with their second plant - must be opportunities in higher density populated areas of the world, Why not expand there too, since technology now proven??

Virotec (VTI listed in Oz and on AIM - like PGS, must visit that one too, Di - so much to buy and so little money!!!) is interesting because it owns 38% of HYR and has several other water/environment businesses up and running. Maybe other businesses are more prosaic and overall business will not have such a high rate of growth. But they do have 38% of our hero company.

Which to buy? Dilemma - which is Greek for the law according to Di - needs to be resolved.

May see you at that bash in April in London. If I go, I'll look out for you.

SD

Dynamite - 20 Feb 2005 19:48 - 14 of 103

Well SD..Thanks for the info. It is a bit confusing. I already bought HYR on Friday but I still have plenty of spare cash after taking profits on PDX and NOP.
Plan is to buy more SEO on dips, HYR on dips, GFM on dips and should I buy VTI as well as I don't have any yet. Just been looking on Afdvn postings about an institution who sold lots of HYR recently and bought the same amount in VTI instead. VTI chart looks a bit static to me though. I shall keep an eye on it.

I will definitely be at the Traders day so it will be great to meet you.
Di

stockdog - 20 Feb 2005 20:09 - 15 of 103

Don't know about VTI chart being static - but we may be heading to the top of the 5th wave after which 3 declining waves ?? - so I think plenty of time to wait for it to peak and fall back below where it is now to buy. But since Jul'03 there has certainly been a bit of life in the old SP.

Gotta go - dinner's burning!

SD

andysmith - 20 Feb 2005 20:11 - 16 of 103

Di & Stockdog, hello again, I've been mulling over this one for a few weeks since the bluesky article. At that time put more into topping up SEO so not a bad decision but have just released some funds and looking for the next one.
Can't make my mind up whether to buy or not, principle looks good, application of enviro could also end up being legislation driven? Question is the timescale. Article said first serious profit in 2008. I'll kick myself if I do & it's peeked for now and if I don't and it flys. Difficult one this!

stockdog - 20 Feb 2005 21:05 - 17 of 103

Chart is very similar to SEO's recent progress (but without the 51 year history prior to that) - but with so much recent info on that subject we probably feel we know it better. And several of us are buying more at the 13/14 level - although mostly those who started at the 4p or 8p level on first buy.

Over the long-term, if this share does perform over the next year or so, the recent doubling will seem like a pimple. If it doesn't perform we will have regrets. Do we know who the main holders of stock are and if they've been selling into the rise?

Profitability being so far away and no idea what a litre of re-cycled oil earns gives little clue to the evntual profitability. Not sure where Dynamite got her £2bn annual world market from (not disagreeing, just asking). Also hints but nothing definite about what other applications the same technology has in cleaning industrial waste products - be nice to know there was breadth (PSG e.g. has as many applications as you can think of related situations) as well as depth to its eventual market - then I'd be in like a shot.

It feels sexy to me, but too little info to definitely want to get into bed (if you'll excuse me carrying the analogy to the next logical step). Maybe I'll just watch for a while - that doesn;'t sound too good either does it.

SD



Dynamite - 20 Feb 2005 23:12 - 18 of 103

SD.. The £2bn annual market came from the Shares Mag.
Di

leslielipert - 21 Feb 2005 14:25 - 19 of 103

Durlacher have done an ‘Initial Coverage’ Report.

The say “Key to HydroDec is the 9 month payback for the enlarged 20,000 litre per day facilities. Therefore, we believe HydroDec will be able to fund its own expansion. We believe the future will see major customers taking licenses to the technology and paying HydroDec a per usage royalty fee.”

In short term they set a target price of 50p and an indicative net present value of £156.7m against a current EV of just £33.4m at a price of 23.5p.

andysmith - 21 Feb 2005 21:35 - 20 of 103

So is it a scrreaming buy or not, what happens if any glitches with the new plant??

stockdog - 21 Feb 2005 21:54 - 21 of 103

leslielipert - can you let us know where we can read the Durlacher note - it's still a mystery to me who they are issued to and where one can readily acquire them or even know they exist.

thanks

andysmith - remember the principle, do your own screaming! nearly dived in today, but couldn't resist some more DEMG at what I hope will be the bottom of their recent decline.

SD
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