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Currently Mr Market values PV Crystalox (LSE: PVCS) at 13.5p or £22m.
It has the possibility of receiving a court settlement of “multiple of the Group’s market capitalisation…..[the International Court of Arbitration of the International Chamber of Commerce] judgement expected before the end of this year.” (Preliminary Results 2015)
It also has net current assets of £34.2m
It also has the possibility of returning to profitably.
I’ll look at the balance sheet first.
Net current asset value
To get to the essence of the BS value I’ve had to do some modifications to the usual way I lay out in a NCAV analysis. The complication arise from the obligation to buy polysilicon at above market prices, hence the Onerous Contract Provision and the Prepaid Expenses in both the current and non-current assets………To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1
| December 2013, €m | December 2014, €m | December 2015, €m | |
| Current assets excluding cash | |||
| Receivables | 13.5 | 5.3 | 5.7 |
| Inventory | 13.0 | 28.6 | 23.2 |
| Prepaid expenses (mostly deposits for polysilicon feedstock) | 11.5 | 12.4 | 3.4 |
| Totals of current assets excluding cash | 38.0 | 46.3 | 32.3 |
| Deduct all liabilities | |||
| Provisions for ‘Onerous Contracts’ | -26.5 | -15.6 | 0 |
| Other current liabilities | -9.9 | -6.9 | -7.1 |
| Other long-term liabilities | -0.2 | -0.3 | -0.3 |
| Which totals to NCAV-excluding-cash | 1.4 | 23.5 | 24.9 |
| But we need to add long-term prepaid expenses (mostly payments ahead of time for Polysilicon, covering periods up to 31 March 2018). Included in ‘Non-current assets’ but arguably very similar to the current prepaid expenses. | 14.3 | 5.3 | 5.2 |
| NCAV-excluding-cash with all prepayments | €15.7 or £12.3 | €28.8 or £20.6 | €30.1 or £24.1 |
| Add Cash | €39.9 | €24.6 | €12.7 |
