FY1819 Budget that was delivered yesterday included changes to the R&D rebate. Will GSL be impacted by these changes and if so how?
Good question. In essence, we will be unaffected by the changes to the R&D tax Incentive. As a notionally 30% taxpayer we will enjoy the maximum rebate of 43.5%. Also, our typical rebate amount is below $4,000,000 and, thus, we will be unaffected by the cap. However, this could be challenged during the more intensive phase of the Major Area Demonstration (MAD) Prototype project and we will need to be careful to spend accordingly. Obviously, the structure of the capital leasing program will take this into account. The claw-back arrangements in relation to grants such as ARENA are generally neutral to us.
Would you (Richard Caldwell) say we should buy Greatcell Shares?
I would consider it an excellent time to buy GSL shares once they trade again: (1) we are moving inexorably towards commercialization of our technology, (2) corporate interest has never been greater, (3) newly invested equity capital will be matched by at least an additional $1.5 of non-diluting grant funds i.e. $1 (dilution) + $1.5 (non-dilution) = $2.5, (4) the successful production of a large-scale prototype will significantly de-risk the development of a PSC PV product (5) the MAD prototype can seed multiple emerging international projects where GSL seeks to operate as a 50% JV partner and (6) the incumbent 1st and 2nd generation producers cannot ignore the emerging threat it has clear and tangible cost and performance benefits. However, it is important that GSL as an investment is consistent with your risk profile, so I would recommend independent investment advice if you’re unsure.
When will trading on the stock exchange resume?
We cannot say exactly, as refinancing negotiations are incomplete, but we believe it is imminent.