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Their results were very pleasing and now investors are wanting to ensure they qualify for the 4.37p dividend that is proposed, going ex div. on April 25th, hence the buying today and most likely all this week. Nice graph of recovery still due.
Fantastic gains for SP today. Bakk board continue to deliver quality + affordable products via efficient processes in a globally turbulent trading environment. The growth strategy is sound and this business will keep on delivering imo. With the recently uprated Dividend there's great incentive to buy now for a long hold here and beat the rates offered on bonds/ bank savings acct's.
Debt is down, FCF is up, Divi is up. Adjusted profit will probably hit £100M in 2024, really happy with this one
Trading volumes are regularly low as its a less popular stock. I've been invested in BAKK for over a year now and will continue growing my stake, as I spotted it as a decent business to invest in back then and the results being delivered just keep on getting better!
Very nice
Why volumes so low here?
Most welcome and just on the debt side of things, here is some greater context on the situation, lifted from results RNS:
"Group profit before tax was £70.3m (2022: £18.1m). This is after finance costs (net) of £26.8m (2022: £20.8m), which increased due to the impact of rising interest rates, although this was partly offset by the benefit from the significant reduction in debt levels during the year. To hedge against movements in base rates, the Group has £150m of fixed interest rate swaps in place until March 2024, at an average rate of 37 basis points. The Group has a total of £130m of fixed-rate interest swaps from March 2024 until March 2026 at an average rate of 373 basis points. We expect the increase in interest rate, driven by the change in our fixed-rate swaps and the full year impact of higher base rates, to be offset by our lower level of debt and therefore finance costs for 2024 will be similar to that incurred in 2023."
Bakkavor board got ahead of the curve on managing their debt situation in my opinion... by striking the right balance between clearing some debts down and by maintaining investment to support revenue growth and further debt reductions later on. They've avoided a trap which some businesses can accidently fall into, I.e. if the efforts to pay debts down are overly aggressive then it can cause a company to grow too slowly... such businesses taking the aggressive pay down approach can easily see their revenues/profits fall away dramatically because competition eats their lunch!
Yep. Great results. Thanks for the summary Savage and the call outs on some underlying issues.
Still £55m reduced debt and a 7.28p dividend - it has been much better year. Steady as she goes...
As I had reckoned there's a lot of things to like about this brilliantly managed business: highlights from the results include:
· Reported revenue up 3.0% to £2,203.8bn
· Adjusted operating profit of £94.3m, up 5.5%, ahead of expectations
· Free cash flow of £103.2m, up £49.8m prior year
· Net debt down by £55.3m
I spotted within the results there's acknowledgement of the continued issues with shipping of raw imports, confirmation of higher debt interest costs (but well within manageable levels) and some absorption of cumulative inflation impacts (albeit ensures pricing remains competitive).
On the whole Bakkavor is doing brilliantly!
Great update Save, thanks - I like the way this company is managed
A shy over 5 weeks until on 5th March the Full Year Results land:
Reminder on a couple of the trading update key points:
· China: Seamlessly built back volumes and continued to diversify into the retail channel, importantly the business is now cash generative and self-sustaining
The Group anticipates FY23 Group adjusted operating profit to be at least in line with the upper end of the range of market expectations2
2. Based on company compiled consensus ("Consensus") which includes; Citi, Goodbody, HSBC, Investec, Kepler, Numis and Peel Hunt. Adjusted operating profit Consensus for 2023 of £90.2m, with a range of £89.7m to £91.1m.
So in summary... we're looking for operating profits to land at £91.1m with anything above seeing SP perform very nicely indeed. In my opinion we're likely to hit £92m, and perhaps a shy more on top too! Reason being, management have been leading this business very well with sensible investment, good product design/marketing and making tough calls on driving cost efficiencies through this period of high inflation. I cannot see any obvious reasons for the results to fall flat at the last hurdle here.
TheRiflemans - I think you'll find Bakkavor's rise will not stall because they produce good products which are affordable for price conscious customers. Bakkavor continues to make great progress on the efficiency/productivity front where other competitors have neglected to do so with as much attention. I'm long hold in this quality company, and whenever the SP dips a little I snap up some more shares!
But it's the things that you conveniently skip over that could come back to bite your behind.
Volumes expected to come under pressure due to deteriorating UK consumer sentiment, changes to the US business and probable margin pressures due to inflation and a steep rise in shipping costs.
Will wait for the rise to stall and then probably lodge a short position.
Group revenue up 3% (Like for like revenue up 5.3%)
Adjusted operating profits to be at least in line with upper end of expectations c£91m
Net debt significantly ahead of expectations, around £230m
Momentum being carried into 2024.
Great to see also some fund picked up 5 per cent last week
No smoke without fire
Feels like something major in the pipe
Excellent RNS out today - Baupost sold entire holding 116.5m shares to Long Range Capital who specialise in FMCG companies and will have NED on the board. Share price up 6% in response.
Trade update out on Thursday 18th January.
Unfortunately there are some shares you get stuck in that never excite. What I can't understand is why people tie up their capital for ages with little if any return. There has to be a thousand other better shares to choose from.
We need a trading update to get investors excited again..
Quiet ones are the. Best
We will come good eventually
Agreed. Surprised this stock is quite quiet. Good for me, I got a small stake here for a recovery to 130p. May new year bring joy!
Quiet board here - still don't understand why the SP is low - there seems so much potential in this rock solid company
Been watching this one I think its got a good year ahead.
Great update sav - thx
Upcoming Ex-Dividend on 14th Sep:
https://www.dividendmax.com/united-kingdom/london-stock-exchange/food-producers/bakkavor-group-plc/dividends
Certainly is a steal! In my opinion it's on track for at least £2.18bn of annual revenue in the next full year 2023 results (conservatively assuming next 6 months of results draws exactly level with the latest being reported today, it should be even higher). Yes, BAKK has had incurred some costs for it's plan to deliver savings... you can read about this in the Full Yr results 2022 and in the latest update - Key detail in todays update being:
"Actions set to deliver £17m savings in FY23, ahead of initial £15m forecast, and £25m annualised". This is very good news especially given they also mention "free cash1 generation of £51.6m, up £15.0m" - Net debt down by £21.4m.
Cannot really envisage a scenario in which BAKK do not also uprate their Final Dividend too!
Everything positive - SP is a steal - great results, great company!