The latest Investing Matters Podcast episode with Inclusive Asset Management's Alexandra McGuigan has just been released. Listen here.
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Yes they do. The nightmare of trying to get back withholding tax. Has anyone ever managed it? Platform providers such as AJ Bell and H/L don't seem to want to help either. Strikes me as being a scam that foreign tax authorities are quite happy to participate in, though there is an ongoing European Union initiative to make it easier.
Robb should regret not bidding more. It was a massive missed opportunity but it still looks cheap at 200-300% of our market capitalisation versus construction costs.
Robb failed to move successfully on KMR when KMR was on its knees. That alone supports why /most/ market participants are clueless as to what KMR is. It's not about the little dredgers and barges. The black stuff is in the ground. It's not even that valuable either. But it is there, and it is being extracted. Unlike many of the laughable pre-production projects that are being punted to investors these days. Robb's costs were extortionate compared to KMR.
Thinking of investing here but are dividends taxed at 25 percent for uk holders ? Many thanks Anne
Another complementary article from IC.
The low valuation the market has stuck on Kenmare Resources (KMR) goes beyond simple ratios or putting cash profits next to its minute enterprise value. Often when a company’s assets far outweigh the market capitalisation there is a huge debt load or crash in underlying markets. But not with Kenmare. The titanium oxide miner values its dredging, mining and processing kit in Mozambique at over $900mn (£709mn), compared with a market value of just £269mn. Put this against the 2023 cash profits of $220mn, strong balance sheet and increased dividend, and the share price looks even stranger.
Granted, Kenmare has seen the average selling price of its ilmenite and other products drop 10 per cent on average in 2023, and this pushed Ebitda down a quarter compared with 2022. But the real valuation drop is probably due to the necessity of once again moving a whole processing plant to the next deposit. A detailed study on this is expected in the coming months, but the company has said the cost of shifting wet concentrator plant (WCP) A is $341mn, to be spent by 2027.
This is up from the $270mn estimate from a year ago, and Kenmare has already taken on a new $200mn loan to cover initial spending this year.
Even at that higher cost, broker Peel Hunt says this is an opportunity for investors, not a cliff from which the share price will dive further. “We do not believe the shares price in the sustained ilmenite pricing, nor the unlocking of a decades-long future via the WCP A investment programme that is just getting under way,” said the Peel Hunt analysts. Meanwhile, Kenmare managing director Michael Carvill is stepping down after almost 40 years in the job. His successor will have plenty to do but will be taking on a company in fine fettle. Buy.
Tax, I agree and have previously said the same. It’s one heck of an investment at todays price if you invest now get dividends and it sells in 2-3 years
Thought today's presentation was excellent plain spoken and covered all the bases, some good questions at the end.
As far as the sale of company goes I think Michael hit the nail on the head when he said no one has been banging on their door regarding a sale however if he was running the rule over the company he would wait until the wcp move had been completed before making a move, I get the impression that is the way that it will play out.
What about his shares in the company, surely they are an incentive.........................
Private Investor Webinar at 12.30pm today. Michael Carvill, Managing Director of Kenmare Resources and Jeremy Dibb, Director of Corporate Development and Investor Relations will present the FY23 results to 31st December which were announced on 20th March . Register
https://us02web.zoom.us/webinar/register/1217097076837/WN_-zLIKNlKS5eYmE-3dXyS6g
I discussed this exact concept with david robb (ex CEO) of iluka in 2015, regarding the value of an asset like KMR to an acquirer ..
I have been holding back from comment in the hope that someone else might . The "key" factor in any takeover is return on capital. The value of the underlying assets whether actual or replacement is secondary. The attitude is always "I invest, but how quickly do I get my money back?" A workable Exit strategy is of the additional importance. Little point in investing unless you are able to cash in your chips at some future stage. MC had little or no incentive to think of either of these factors. Hopefully his successor will be appointed solely with these strategies in mind and we will see the quoted price returning to somewhere near its true value.
Key for a buyer is the replacement cost of the asset ie cost to build now .. that’s got to be closer to $2 bn as MC said at the Cap mkts day. As prices rise to fill the supply gap such that building become viable again buying KMR at a reasonable discount to the RC could be attractive and cash payback would be reasonably quick. The supply demand chart in the webcast is important..
Https://www.investorschronicle.co.uk/news/2024/03/20/kenmare-resources-strong-performance-belies-valuation/
Reiterating many views I've seen here.
@richorpoor, missed that thanks.
The company has already stated last year when they did the buyback that there would not be any more buy backs in the next 2 years until after the mine move to it's new area
So don't need to expect any but saying that it would be a ideal time to buy at this price
Listened to the webcast.. analysts wanted to ask about WCB timing, and Moz govt taxing the unregulated mines which would be positive. The page on supply/demand balance for ilmenite looked very supportive of much higher prices soon. Q&A raised the 'up for sale' question with one analyst describing KMR as incredibly cheap. MC played a straight bat back saying we won't sell now with prices so low but with rising prices, low supply coming on and recovering demand already KMR should have a better year. Still don't know anything about the Congolone opportunity. One thing that does look interesting is there's at least £150m of working capital on the balance sheet that could be turned into cash in 2024.
This is an astonishing bargain.
Buy and hold for £5
I feel I need to qualify my calc @sakura since it is slightly more than my expected figure I provided as I had excluded the buy backs from the previous shares in issue for the first dividend distribution. but $50M for dividends for 2023 was previously stated. Pound is forecasted to get stronger over the next quarter so at the end of day what arrives in your account will probably remain the same. then there is the 25% WHT to erode the income further. I think share price will remain the same territory until the move is complete but I do hope I am wrong. No mention of any further buybacks either.
Happily I was wrong, but also happily I didn’t sell before the results this morning. I feel that there should be a good improvement in the SP, partly on account of the good dividend yield and the confirmation of guidance for 2024
38.54cents dividend, almost as expected.
Hope the sp will make a move upwards.
They've already commented on the expected dividend 37.4c/share is expected
Personally if profit after tax is under 130 million USD I we consider a bad result
If profit is above 140 million USD I would a good result and would expect a final dividend of about
30 pence a share uk
I agree that the timing of the announcement of Carvill’s retirement shortly before the publication of the annual results is an indication that the results will not be good. Having said that, I think that the current share price has taken this into account
Hopefully I’m wrong but tomorrow will prove interesting!
Ordinarily my inclination would be to think that the announcement now , would be to not associate him with a bad set of results , or to blame him for them . I say this because if they were a good set of results , they would announce his departure alongside them
On the other hand , at 65 he is due to retire , and the fact that he is staying on might be to remain at the company long enough to arrange a smooth transition and sale ..
Of course all of this is speculation ..the only thing to do will be to await the results ..
At some point though , this share will start to rise ahead of the dividend announcement next week .
For what it's worth , I think this is the bargain buy of the decade , unless bad news awaits ..let's see
Liam
This is what concerns me, the timing.
" Not sure its a good thing announce right before results are due next week... "
Boy
gla