George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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John Rossier who runs a portfolio in IC gave his update for July today. He added to his existing holding in SLP at 70.2p on July 5th. This was his comment on SLP:
“ Sylvania Platinum fell due to the weak rhodium price. It was down 16 per cent during the month and is back to levels last seen in September 2019. Fourth-quarter results to 30 June steadied investors' nerves. Production exceeded guidance, and year-end net cash amounted to more than half of the market capitalisation. It's cheap on around five times earnings per share and, after stripping out cash, four times cash flow. While inexpensive, platinum group metal prices probably need to recover to get the share price moving. The forecast yield is 7.9 per cent for the year just ended, falling to 6.2 per cent in June 2024. On Stockopedia, it passes no less than 13 of its "guru" screens covering all bases – quality, value, growth and income. It has been a long-term holding, and the total return is 73 per cent. Again, I expect my patience will be rewarded.”
Surprised there have been no posts on the actual full-year results achieved, now that all 4 quarters have been revealed in RNS’s, ahead of the full-year audited accounts to be published, circa 7th September.
Anyway, to recap - from the top:
- all-time highs in the company’s entire history were achieved for the year ending June ‘21 with the front door/back door figures of Revenue/net profit revealing:
$206m Revenue / & $99.8m Net Profit.
That was excellent.
And from there on, it’s been nothing but pullbacks all the way down.
The following year (‘22) revealed:
$152m Revenue / $56.2m Net Profit.
Early this year market guidance for this year ending June ‘23 had it down for $166m Revenue & $66.8m net profit. However, revisions continually reduced that at every trading update. That $66.8 net profit was soon reduced to expectations of $65m.
The downgrades continued and after the Q3 update, mkt guidance had been reduced further to $134m Revenue/ & £51m Net Profit.
But worse was to come.
After the recent Q4 trading update, guidance was still continuing to be reduced and is currently still showing reductions of Revenue down to $132m / & Net Profit $48m.
So as no one has posted all the actual quarter results as a running total, I’m posting them here, in readiness for the early Sept full reveal -
H1 RNS revealed as:
Revenue achieved of $79.9m & Net Profit of $32.6m
Q3 Revenue achieved $26.510m & Net Profit $6.112m
Q4 Revenue achieved $24.421m & Net Profit $3.136m
Totalling:
‘23 full-year Revenue of $130.2m
$
‘23 full year Net Profit of $41.8m
Where was the Profit Warning from the company?
Because that’s a massive drop on last year yet the trading updates have a distinct aura of: we’re-doing-great!
Whatever, disappointing as that is, this new current year is forecast to come in with further pullbacks. June ‘24 guidance has been reduced again since the Q4 trading update to currently $127m for Revenue & $24m for Net Profit!
I don’t have ‘25 forecast guidance but it’s been posted below to expect Net profit of, wait for it . . . $53.9m ! :)
Should that be the case, then ‘25 could be the last of the floor, as regards to earnings; with an impact on the SP? - only if those 2025 earnings are achieved.
I won’t have ‘25 guidance figures to hand until after the audited ‘23 results are published in early September. But I’ll happily go with that near $54m Net Profit suggested in posts below :)
LN $30m of chrome production does the same to the top line as RH going from its current $4k to $8k. Both brokers seem to be using $13k in calculations for RH in their estimations but Liberum in its price deck is stating a $4k LT price for RH. I suggest any broker using a price 225% above its current price for next year and then saying it will drop to $4k is producing unrealistic figures. If an analyst was using $282 for oil I would laugh RH needs to rise substantially but at this point are producers just stockpiling? I would steer clear of PGM's and look at gas coal oil for winter then keep an eye on RH breaking its 50 day AND more importantly definite signs that RH is in deficit. I cannot see much happening in PGMs for 6m.
Https://www.edisongroup.com/research/chrome-ore-and-pgm-treatment-joint-venture/32591/
What's your time-frame?
Perhaps have a look at the broker forecasts for dividends they tell you all of this, not that they are necessarily correct. As it stands right now consensus (2 brokers) is 4c dividend and net of $24m 2024. Strangely by sheer luck and absolute guesswork being wrong at every turn that ties in with the 6m a quarter I said was expected a few weeks ago. Perhaps run it on a 20 day support and get out on a 20-day reversal, that's why i would do.
Mulder,
Don't confuse critical thinking with being 'negative again'.
You can cancel him (filter) at your leisure, I doubt that removing yourself from a feedback loop will lead to satisfactory results though.
THS is about 2 years older than SLP. A lot of things can happen in that time-frame.
Investing in competent people usually leads to good results.
I enjoy your treatise of the numbers, but I do notice that the human element is missing. And business is all about that. Humans.
So, how does the THS borad fare vs the SLP one in your opinions?
A nice 10p divi would move SLP closer to 90p, lets hope they dont cut it
2025+ net profit using 72k oz 200k ore and current prices will be $53.9m (my sheet) broker in the latest note has $53.9 never been closer in 3 years. I would say 80-95p fair target unless spot prices change. Gain of 26%. PGM prices need to go up or you are left with the traders pumping it up and selling it off this is a range trade to 90p. Don't be the fool getting sucked in at 90p. Blind Tiger, I've been spot on all the way since I called this a buy at 35p with 100% gain after covid and £400k stake, mulder you go ahead if you think 26% is great. I make 64% YOY so that's all that matters and I walked out of finance at 40 being able to make decent money myself NOT being wrong at every turn. I will keep posting anywhere i like and about anything I chose, if you want fluff then block me. You need a 50% gain possibility here to get a larger PI involved, THS is further down the line on "diversification"
Lol at JLP
Have to say pretty strong rns from sylvania, they just keep doingt things right, 100% trust in these guys.
also shows faith in future pgm prices plus they have been watching the high chrome prices for a while now.
so very pleased, glad they were sitting on the cash pile so they can make moves like this.
Mulder,
think bangrak (who i have filtered) is the same as sotolo, both always negative and largely unfactual at every turn.
Diversification is good with growth to come.
bangrak negative again, surprise surprise! You hold a serious grudge against this company for whatever reason.
The market likes today’s RNS currently Up 6.9% at 71p on volume of 114000.
@bangrak, if you read the whole RNS it explains how the JV is being financed. SLP provides the upfront payment but half of that is a loan to the other party, who will be paying 11.75% interest
I'm struggling to understand if that deal was inked way before prices collapsed, Starting in 2025 paying $32m for a 10-year but 17yr max term if extended/negotiated for an extra 6500 0z plus some chrome. Payback in 3 years it says, using long-term consensus pricing (broker says $5k RH so what is the consensus used why hide this). Remember there is very little profit on the net basket as it stands, so why pay $32m for an extra 6500oz, what's the other party putting in......"expertise"
Thanks for posting RNS, much appreciated
Great stuff! This JV has a very high ROCE even at these depressed metal prices. If they recover we'd be printing money again!
LSE RNS feed not working yet today, this released this morning:
https://www.londonstockexchange.com/news-article/SLP/chrome-ore-pgm-treatment-joint-venture-agreement/16075677
An interesting read thank you.
Check Glencore and what they have done today
I agree the dividend is very important but perhaps it would be acceptable not to match last years payout when we consider the present yield with the share price so low. In my humble opinion at sometime in the future it will be understood that its nonsense to consider that it is beneficial to have everybody driving electric cars. It is not green because of mining all the elements needed for the batteries and the disposal of the batteries is problematic. We are unlikely to have sufficient generating capacity to charge a vast number of electric cars at anytime in the near future. I have been advised that we don't have the capacity to supply sufficient electricity to all the required charging points. which we are not going to have anyway. I mention all of this as I expect that Sylvania Platinum to have a bright future by supplying items needed in ICE vehicles for many years to come.
The key for me is the divi. This is now only a divi play as there is no longer a viable reason to hold this stock. I am now underwater on SLP unbelievable as that was a few years back. And it is not looking too rosy in the foreseeable. So it follows the only real reason to still hold is the divi. If that goes, then I see this dropping further back as people exit in droves if they have not already done so. For me I will not sell. I do not need to. This will come back but it is a bottom drawer stock for me now. One to simply forget about for now.
The company announced on May 2nd that they had ten million dollars available to buy back shares for cancellation and the buy backs must be completed by September 7th or earlier if the ten million dollars had been spent. I agree that they are trying to purchase the shares for cancellation at as lower price as possible. What surprises me is that it would appear that they don't consider the current share price to be low enough to buy back shares so it appears to me that they don't agree with the share price that several financial organisations have suggested as fair value.
Presumably the company has a limited amount of money to use for repurchases. On that basis, if they repurchase too early in a falling market, their activity will not arrest the fall and they will be able to repurchase fewer shares than they could otherwise have done if they waited. The failure to repurchase now may not therefore indicate a view that the current sub 70p is too high, or appropriate. It may just be a pragmatic approach and involve keeping whatever powder they have dry. Repurchasing when the market turns may give them more bang for their buck.