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Hi EdwardSeaton,
You don't get it, there not interested in what the share price does, because there not selling, there in it for the long haul. That's another 10, 20, 30 years or more & possibly passed down to another generation as well.
I forgot to include something when talking about salaries/bonuses etc & I've closed down the files I had open & can't be bothered to re-open them to get the exact amount.
In one of them, LAS I think it was, it outlines Sir M Hellier's salary which was around £200,000 but he also got "office services" ie use of an office & all the things that go with it worth at least £300,000 to run the rest of his empire. Private or minority interests in public PLC's etc.
That will have been passed down to Andrew, John & the rest of the family. They gain so much more than just the headline numbers & those caught in the trap, fund 40%+ of it all annually.
It will be interesting to see how much John gets paid by BISI & Andrew by LAS for there directorships.
LOTM
I seem to recall Andrew and Mike held 10% of Bisichi outside of LAS?
Irrespective, their shareholding are currently a fraction of the NAVs, to the benefit of nobody.
As I have repeatedly said, I am in no way saying their bonus was earned and justified.
I am simply saying that the route to a share price that reflects the value of the company will only come when their clarify what they are trying to do with the business, and what the dividend policy is.
Until such time, whether there is a bonus or not, the share price will continue to languish at a fraction of NAV per share.
Hi EdwardSeaton
You don't seem to be separating salary & bonus as 2 separate things.
They are not going pay there salary as a dividend, because that would mean having to distribute wealth to the minority shareholders.
Bonuses mean rewarding themselves, for a job poorly performed in 2022 & no-one else. £2.6M disappeared out of the company's assets that way. All shareholders got was a mere £2.38M between all of them.
You seem to think the Helliers share holdings are worth £30 or £40M which is simply not the case.
The net assets of LAS along with its 41.52% of BISI & 50% of Dragon + another 41.52% of 50% = @ 71.5% of Dragon in total. Are worth £32.56M of which 56.5% belongs to the Hellier family, ie under £19M.
We'll find out in the next few days roughly how much the whole business was worth at the end of Dec 2023.
LOTM
I agree with all of that.
I would only make the following two points:
1. If the two companies were sensibly structured, the Hellers (and all other shareholders) would be substantially wealthier. If they sold/liquidated the companies, they could generate an income from the proceeds well in excess of what they currently draw. They are basically going to work pointlessly if a luxurious income is the only goal. As currently priced, they could take both companies private without a call to the bank. But they have no apparent interest in doing so. Being a plc at this scale is insanely expensive and laborious.
2. Yes, they could have paid their salaries as a dividend instead. But they could also have paid 4 or 5 times the dividend that they did, and still drawn their salaries. I am inelegantly trying to say that it wasn't an either/or choice.
I stand by my contention that I have never come across a pair of companies that would be easier and cheaper to transform. The Heller shareholdings should be worth £30m or £40m, not £5m.
So LAS itself is virtually totally risk averse.
So Stonehage Fleming Inv Mgt which own 8.81% of LAS (just over 7.5M shares) has its money tied up there doing zero for them basically, year in year out while John & the rest of the board rake in £1M a year now (oh & I forgot John get's £10,000 from Dragon as well - that will help pay for the holiday no doubt).
I'm not sure how many actual staff LAS employ themselves or size of salaries etc.
Stonehage Fleming Inv Mgt own 17.95% of BISI which is 1,916,154 shares. So they have been getting some income from that, but whose going to want to buy there shares stuck in this structure with mine-life dwindling etc?
How much did both investments cost them in the 1st place ?
So in summary the 40%+ of cash that was originally invested by outsiders in LAS is doing nothing for its holders other than pay 40%+ of Directors salaries etc. Then on top of that amount of cash, the outside investors in Bisichi are very much in the same boat, only they are getting a dividend most of the time, but that hides the fact that the directors are milking a fortune off it, sucking the pot dry without virtually any skin in the game.
The only saving grace for the outsider shareholders was the sharp spike in the price of coal which brought a considerable sum of money into the business & they got a decent return for once, but it will be back to crumbs for them, while the directors milk the pot dry again slowly but surely year after year.
Some outsider shareholders might have got lucky & got out when the opportunity arose (surprised Stonehage Fleming Inv Mgt didn't sell a good chunk of there holding - or maybe they did - I didn't look for it historically but could find enough buyers for the rest). In the meantime that 40%+ of the original outside money in Bisichi is again being used to finance the Hellier Empire & repayment on it can't be demanded etc unlike the bank lenders etc who can do that.
LOTM
Hi EdwardSeaton,
So looking at LAS or (LAP as it likes to be known).
John Hellier gets a basic salary of £558,000 + £38,000 of benefits & another £33,000 for pension as opposed to Andrew Hellier's basic salary of £495,000 + £42,000 in benefits.
John Hellier owns 1,872,410 LAS shares, Sir M Hellier & family owned 48,080,880 LAS shares that's 56.35% of LAS ( I can't tell if that figure actually includes John's holding or is completely separate to it). I also noted that Stonehage Fleming Inv Mgt own 8.81% of LAS (just over 7.5M shares).
LAS own's 41.52% of Bisichi
Within Bisichi - Sir M Hellier's estate owns 3.09% of the company (330,117 shares) & Andrew Hellier separately owns 7.35% of the company (785,012 shares) I'm again noting Stonehage Fleming Inv Mgt own 17.95% of BISI which is 1,916,154 shares.
So the Hellier family in essence control 51.96% of Bisichi (41.52% + 7.35% + 3.09% ).
I'm not entirely sure why Bisichi is incorporated into LAS's accounts given it is only 41.52% owned by that entity I would have expected ownership to be over 50% before they needed to be added in so that complicates things even more & then you've got Dragon as well ! a 50/50 split between the 2.
So that's going to need to be looked into in a lot more detail to try & work out what's what.
What is clear is that LAS doesn't like using its own cash, it likes to use borrowing's either from banks or from Bisichi.
Bisichi has a portfolio of properties that it owns (& has some borrowings against) valued at over £10M ( so effectively just under half of that investment is not from the Hellier family) It gets around £1.1M annual in rent from it (less interest on the bank loans), but it then pays LAS over £0.2M a year to manage that portfolio on its behalf !
Andrew Hellier has an outstanding loan of £42,000 from Bisichi ! Yet didn't re-pay it when receiving £1.6M+ in salary plus dividends on top of that !
-------
They simply want to make enough money each year to get a handsome salary for themselves at the expense of those invested with them, whose money gives them virtually no return on it be it dividends or capital appreciation.
LOTM
Hi EdwardSeaton,
The directors paid themselves a bonus of £2.611M in 2022. (just to put that in context that is more than the shareholders received in total dividend for the year 22p per share at a cost to them of £2.348M)
1 of the Executive directors doesn't own a single share in the company, another just 40,000 shares & they have base salaries of around £200,000 per year.
They'll tell you how well the company performed & they should be awarded accordingly. Well the honest truth is the company didn't perform in 2022, they only reason they made so much money was the massive increase in the price of coal which is totally out of there control.
What was in there control was mining output - although they use outside contractors to do the mining which obviously increases the cost of it. Output fell, there were issues, poorly selected ground for stripping etc & in the first half of 2023 they ran into more issues around a fault which if they'd test drilled it right they would have known about it.
So did they deserve a bonus on that basis? I'd say maybe a small one at best given the largeness of there base salaries. If they'd got £0.5M between them I'd have said they'd done pretty well for themselves, all things considered. That would have given them another £2M to either pay as a dividend 20p per share or "invest" in the market, heaven's forbid.
There is simply no way they should have walked away with more of a reward than those who fund the company & have there cash at risk. end of story, totally disgraceful & contemptable.
They must be laughing every day about how lucky they are with this wonderful set-up no risk & just a gravy train.
I'll have a deeper look at LAS before passing any comment in that direction.
LOTM
Yes, I am obsessed with the foolish LAS 42% holding. It serves neither company well, nor their shareholders, nor even the Hellers. They should either merge the companies, or preferably, separate them. What they have now is the worst of both worlds.
I am not aware of being hoodwinked, but if you say so.
I understand you are troubled by the salaries, but all things being equal, if they paid themselves nothing at all, I very much doubt the share price would be in a materially different place today.
I am no fan of the way the company was being run under Sir Mick, and have been exceptionally vocal in expressing my opinions to Andrew over the last 12 months, most recently this morning regarding their opaque investments in opaque investment companies.
I told him that I was not surprised that Bisichi was priced as if failure was imminent, and that was a disgraceful position for a company with cash and investments in excess of £20m and a balance sheet with net assets of £35m to be in.
I don't tend to do my ranting on here, because I very much doubt the directors of Bisichi will read it. But that does not mean I don't rant.
EdwardSeaton,
Sadly you are obsessed with the LSA holding & that has blinded you for a long time now.
You spoke to the board at the last AGM & got hoodwinked by them.
There salaries & bonuses are obscene for what they are doing/achieving. Yet you simply don't get that.
This latest £2M investment should have set more alarm bells ringing.
LOTM
The share price is unmoved in 3 years. During those 3 years, the net assets of the company have gone from £16m to £35m, and it has accumulated something like £20m of cash and non-property investments.
Bisichi is killed by two things.
1. It's absurd ownership structure. 42% owned by LAS is the worst of all worlds.
2. A complete lack of declared purpose and policy.
Both of these things are stunningly easy to address.
Well if there’s sanctions on Iranian oil then oil will be heading up over the coming months. Will gas and coal follow it north?
It is quite impossible to know if they are making a profit. The total unknowns are production volumes and export volumes.
H1 was feeble. They suggested at their last communication (interim!) that H2 was going to be substantially more.
I assume property will be nothing unusual.
Investments? Ww don't knew what they are, let alone how they are doing.
West Ealing development? No news, so I assume no nothing.
Best guess? Close to zero profit, 3p final dividend.
This will carry on being priced as a basket case until it clarifies purpose and direction. As you say, Beza, this is the first test of Andrew Heller.
Yes, will you be airing your thoughts at the next AGM?
The Richards Bay coal price seems to be ticking up. TGA is moving up quite a lot but the Bisichi share price is like the board - stagnant. Or, perhaps we should reserve judgement until the presentation of the figures. Will Andrew Heller demonstrate a change in the status quo (his first full year in charge) when delivering the results?
As Thungela rises like a phoenix, Bisichi continues to be priced as if the end is nigh.
It is agonising how much value goes unnoticed, in great part due to the inept actions/inactions of the Heller boys.
Andrew will get a lot of stick for his c. £1m salary in a couple of weeks, but the absurd thing is, if they got their act together and sorted out the hideous structure of LAS and Bisichi, between them, their wealth would be multiples greater and the salary would be an irrelevance.
I remain convinced that the companies should either be properly combined or properly separated. What they currently have is the worst of all worlds, combined with a staggeringly opaque business plan.
Couldn’t make it up
Bisichi’s results can’t be far away. Has anybody got profit / loss, eps, divi estimates? It’s so difficult to say with this lot. On the one hand the coal price has come crashing back down but on the other Bisichi have their investment holdings.
LAS are crazy not to buy Bisichi at this price.
£35.5m of Bisichi net assets are currently valued at £9.5m.
£4m for the shares they don't own, in return for an £8m share of Bisichi cash and investments. Plus a profitable coal mine and property investments in the side.
But then the Heller boys are a crazy pair...
If it wasn't for LAS owning 42% of Bisichi, I'd have a go at it myself - I wouldn't have to borrow a penny!
You could fund a takeover of Bisichi at 95p by using less than half of its cash and investment portfolio.
You'd be left with net assets of £25m, at zero cost.
You could offer a 50% premium, and still be left with funds to spare.
Madness...
I seem to remember that they promised last year to improve their website so it’s great that they’ve delivered on this.
The new website has gone live today.
Coal has dropped so much
Well I'm only telling you what I can see further up this page. No sophistication from me.
Ok, so a trade was responsible? I thought the results were in April / May so unless they issued a profit warning (but I couldn’t see an rns) I couldn’t see what had happened.
This is Bisichi - I wouldn't expect an RNS for their annual results...
But I suspect we just found out what happens if someone sells (or buys) 40000 shares in 15 minutes.