It was starting to look like they would miss all their major Q4 milestone/promises - no Big Media Day, and not finishing their demonstration program. And then they made a 23rd Dec announcement that appears to suggest that all may be well in Florida.

True to form, it's a written rorschach test. After staring at the butterfly/monster I've decided it's genuine optimism awkwardly tempered by lawyers, rather than sleight of hand.

What does it say:

• CRH Ventures have agreed that the demonstration program is complete, despite the still pending 10th home
• I suspect this was to stop the slowly spreading dread that something was fundamentally off, rather than just late again
• The 9th structure had been put up in a day, a major point in the machine's favour
• At least 2 further 'demo' homes are in the works for the sake of major US builder Pulte and a newly engaged Florida builder, Neale Communities, a smaller company and perhaps better-sized to be an early adopter.
• The 45 day JV option window starts on Jan 2nd
• CRH Ventures and FBR have agreed to $500k stop-gap funding to allow for one or 2 new trucks to be delivered. Details not disclosed but perhaps under the same conditions as the JV funds (a loan to the JV from CRH).

There are some tea-leaves here. Why would CRH agree to a stop-gap funding measure unless they were leaning towards committing to the JV? Are there any January events or conditions that would sway their decision?

What it doesn't say:

No apologies or explanation about the missing-in-action Big Media Day or the 10th home timeline.

Anyway, the market maniacs liked it and the downrampers have raised the white flag.

Perhaps they are trying to coordinate a media day for January and hopefully another real home demonstration while trying not to get over-shadowed by the Donald. Imagine if he got involved though!

January is now officially the end of the beginning

If the JV is signed by February, then FBR no longer have to worry about funding, and can focus on the complicated logistics of getting machine supplies coordinated and enticing builders to give the Hadrian-X some game time. CRH Ventures only have to fund the machines as they come on line, and that would only be once the active ones are earning cash.

My bet: 70/30 the JV gets signed in February

I attended the AGM last week to try to read the room. Everyone is trying to do the same - will the optioned JV with CRH Ventures be a go or not? It's just not clear, and the CEO talked about plan B. Happy xmas or sad santa?

I have reduced my exposure because at this point I'm in thesis creep mode. Also, I have to acknowledge that the non-stop shenanigans is taking up too much mental energy and causing me to miss cleaner opportunities.

I got onboard for the obvious USA adventure pump which I thought would play out in a crescendo of better and better news. But I didn't understand that the JV funding was only an option and further that the tech has special needs (eg it needs a very flat slab).

Now that I've investigated, it's clearer this is a long game and it needs funding. There are many technical creases which will be ironed out but in the meantime the stock is left exposed as a plaything for pumpndumpers on HC who peck at uncontrollable timelines when they want to downramp ('Why hasn't the Mack truck arrived yet?') or imperfections ('look - the line is not perfectly straight').

The CEO keeps selling an optimistic future: 'every big builder in the US is doing site visits'; 'We're talking to everyone'. He's been doing visits to the Middle East, Europe, and is mates with the number one US builder CEO.

The tech will get better: Each part of the the machine is being iterated on, to make it more modular and efficient based on field observation. Currently figuring out where to manufacture in the US.

Some realism: Big US builders will not bite until they can fit this into their workflow for $0 extra per house (implying not there yet in cost). So small builders (200 houses a year) are the ones most likely to take a punt, because it will help them grow with less staff. CRH Ventures pressing go in the JV option is still the critical catalyst because that would fund the early uptake of machines.

They keep pushing the efficiency envelope: The 8th of 10 demo house walls were built in a day with 3 staff on site.

Declarations to monitor: There will be 4 machines in operation at the end of 2025, and 8 at the end of 2026. Breakeven would come from 'substantially less than 100', whatever that means.

Wildcard: The all-weather outdoor stabilisation technology is patented and they don't mind letting us know that bricklaying is only the first of many potential applications.

Upcoming exposure: A US big media day will be held in December. One was set up 2 months ago, but was rained out.

The pumpers will probably start up again leading up to the media day and once the 10th house is completed for anyone who is playing along.

Another mid-air refuel. They are keeping this fully underwritten offer open for 3 weeks until Tuesday 26th Nov to existing retail holders so depending on the news-flow this is either a gift or a major drag. The AGM will be on the 18th Nov in Sydney.

A construction automation podcaster had unobstructed access all day so many technical questions are covered.

https://www.youtube.com/watch?v=TN1KXcoUFks

Length: 18 min

• Hadrian X in action on build 3 in Florida (in the wind prior to the hurricane)
• a machine walk-around with the CTO, Mark Pivak.
• walk through of the completed build 2 with the business development director.

The first US formality, building a small structure in a controlled setting, has been completed. Over the next few weeks, the building of real house walls will begin as part of a demonstration for 3 US building companies in Florida.

With a little luck, this will win eyeballs in the USA, and with significantly more luck, CRH Ventures will see enough industry interest to be convinced that it should fund a US joint entity - for the production of further robots to become a 'walls on call' building contractor.

https://www.fbr.com.au/view/investor-centre

Disc: I own shares IRL.

FBR halted on Thursday for an institutional share placement announced today of $12m. The discount was 20%. Bell Potter scored $720,000 for their pain and suffering.

This leaves FBR with cash balance of $16m explicitly to see them through to the anticipated exercising of joint venture option with CRH Ventures. It brings on board some (presumably US-based) international shareholders.

The shares will be tradable on 9 August.

I’ve heard people describe FBR as a story stock. Well, this is a very interesting chapter.

Mike, the CEO, is a good salesman when he gets going and he does in this interview. He’s transparent that he doesn’t know exactly what the next chapter will look like. 

https://www.therobotreport.com/advancing-the-world-of-construction-robotics/

Time stamps:

23:40) Background, technology, benefits to builder of locking in a price and time for his walls, hopes and dreams for global adoption.

56:20) Upcoming Florida demo builds of 10 houses in the next 4 to 8 weeks for 3 well known building names, to be witnessed by industry and US investors.

‘From there some decisions are going to made…we are going to gauge the interest…

…The question is: If this machine was available, if you could order your walls from a service provider at a known time and price, would you use it?

If the answer is yes, then we will put things in place to order the first 20 machines.’

My take:

This is the end of the beginning for FBR. I think the odds are favourable that the technology will find a partner or a taker. US google searches for FBR are just ticking up.

P.S. One quirk of the way this robot lays blocks or bricks which it took me some time to grasp - at present, the walls need rendering after (because adhesive is applied to the tops and bottoms of blocks, but not the sides, and perhaps the adhesive drips). In Florida, rendered ‘stucco’ block walls are the standard.

You also need space for a truck within 30m of the walls. I’d be glad to hear if someone spots anything else, I am not a builder.

FBR have one month of cash left and are exploring their raise options, including non-dilutive. The quarterly notes ‘for the avoidance of doubt, this process remains ongoing and incomplete’. They also have some RnD grant funding that they get an advance loan on.

Meanwhile the market cap has doubled. Obviously, this is because their situation is ‘interesting’ rather than ‘dire’. They have many solid stakeholders who want them to succeed, including Brickworks, CRE Ventures as a US construction industry partner and Liebherr as the presumptive manufacturer and service centre operator.

They need economies of scale to operate their ‘wall-as-a-service’ business concept (which is why they could not find a partner in Aus). Florida’s home builder market is a bit different, they can have large development sites. So Florida is FBR’s chosen launching ground and they have a couple of demo hoops to jump through before CRE Ventures considers going 50/50 with them on their US adventure.

I am operating on very basic reasoning as I HODL. Management appear better at inventing and engineering than on managing a listed entity. However, their invention could be a game-changer. They have recently taken on a new board member with experience at relevant OEMs including Liebherr and Hitachi, and at Bisalloy Steel.

FBR has listed on OTCQX in the USA. Not entirely sure what that means for the SP but it's setting the stage for something.

I know this company is basically a gangly teenager, but it looks to me like they do have some coordination skills.

Note that their next big event will be a demo build in Florida, and their manufacturer, Liebherr, has a service centre in Florida.

https://www.fbr.com.au/upload/pages/20240228091001/2687507-half-year-accounts.pdf

There's a state-of-play at the top of the financial report.

They are waiting on delivery of their second-generation robot (from Germany, I think), to be attached to a US truck chassis and sent to Florida to demo-build the walls on 5 to 10 residential houses. Timing is unclear but as soon as possible.

They have already built the walls on 15 or so residential houses in Perth.

They have a binding agreement with CRH, a construction entity in the USA and Europe. Successful completion of the Florida builds would trigger the ordering of 20 truck-mounted robots at $40 million.

I just hope this is real and that the patents are solid. But since Brickworks are a significant shareholder, I am tagging along for what could be an interesting ride.

I don't know what the value should be, but I can't help imagining more than $100 million if the story is legit and developers like the product.

It would be good to hear from any home builders about first impressions and any practical considerations. There are some videos on fbr.com.au and youtube.