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That's the only positive I can see, that and p/e ratio of 2, oh and being undervalued by 30%.
Dividends to come
sp will be back above £4 as March approaches
I have come to conclusion that our management think only of their positions and salaries, they know we undergoing considerable capex when moves of wcp are required yet when the company has made good cash flow and profits over previous years has squandered it on buybacks on several occasions to let investors out.
This type of action is fine if there are no major financial obligations to the company on the horizon but not if like us we have considerable spend going forward, so the management are happy to burden the company with debt in a rising inflationary world, no wonder the banks love KMR.
These actions imo make us less attractive as takeover target, when I think about it much of these moves could and should of been mainly financed via cash reserves not bank loans.
In the CMD update early 2023 in their estimates both new barges were included,
plus we have the updates to existing plant with a design review in progress estimated at $41m to be confirmed which is extra spend.
This is a great asset, which is being financially mismanaged.
Well, strike off the last paragraph….!
It is disappointing to see FIL reducing its stake and supports my other point that the board need to attract additional institutional shareholders to support the business.
I would love to see an activist investor getting involved here as the asset is 💯 underperforming its potential.
I think you called it last night when you said glass half full approach.
I’m ok with the Buy back as a lot of investors were willing to sell and wanted a capital return. The no. Of issued share is down and in time that’s positive.
I would be happier if the debt was simply repaid, as it’s a sign of balance sheet strength and would say to the market that the asset is here producing cash and come get it when you are ready.
In an ideal world, if the glass was half full, I think the board could present a case to the market whereby the forecast to reach Nataka, continuously producing, paying dividends and with a net cash balance of £xm.
Again this would send a very strong message to the market, from a share price perspective, allowing fund managers to see consistent income via dividends and potential for significant capital growth.
I know that a lot of that is said, behind a glass half empty screen, but come out, state it have some confidence in the asset, management team and ability to deliver.
All that said, nice to see FIL buying some more shares, the board need to attract more long term holders here to realise the actual market capitalisation the investors deserve.
Well after a quick read through first impressions are I am surprised the market sees it as positive in today's environment.
At the end of the day it comes down to the financials which in my opinion they have wasted $30m on buybacks which have done nothing for the sp and reduced the mcap of the company. Only for this money to borrowed again when they refinance their terms.
At 31 December 2023, Kenmare had net cash of $20.7 million (2022: $27.5 million net cash). Cash and cash equivalents were $71.0 million (2022: $108.3 million) and gross bank loans, including accrued interest, were $50.3 million (2022: $80.8 million).
So we should be sat on $50m net cash, secondly do they know what they are doing with the move to be $71m out in their estimations in the space of 9 months or so, and their reasoning seems to be enhanced safety contingency if I am reading it right.
Thirdly guidance is down on this year which was down on last year this is a suprise to me because last year from memory we had the lightening strike and slimes issues which have been addressed so I am surprised we are not beating this years numbers.
It’s a guilty pleasure at this stage. Really should get a hobby!
Buy the dip, sell the rumour, I’M BACK!!!!
Good luck tomorrow, let’s find a silver lining!
Here's hoping the drop in share price is likely due to the state of markets being crazy at the moment. Most investors are probably fearing war or a recession and prefer to stay in cash until there is more certainty on commodity trading. But I second your opinion on management @raxfactor. They are hard pushed to comment on the future positively which has has likely influenced share price decline since their last update. For me a 12% yield is not to be scoffed at! Once the move is done I am hoping there will be more in the kitty for shareholder distribution. I doubt we will get a buyout at this stage of the cycle and particularly with the planned move.
@contango always do like it when you are posting even if you are slightly more negative. It reminds me that there are still investors in the game here. I agree with you its a quality asset and the share price makes it very tempting to buy more. gla and here is hoping tomorrow is a better day
Well played, deserved returns!!!
It’s been a journey and I’m well up but I 💯 agree with you that a Buyer could appear once the WCP move is largely complete.
But the price will be higher then and more cash distributed in the meantime.
I suspect I’ll be here to see it out!!!
Good Luck All, 🥂 to a good Q4 update and happy times ahead.
One thing management can't detract from is the asset it's self which is up there with the best, long mine life so even our management should be able to make good cash flow, and with the capex they have spent on power surge breaker, green credentials new barges etc they must be running out of ideas after this next move and the updates to other areas, so I can see an end to the expensive cash burn items and more sustaining the operation we have, so ultimately a cash building situation, the building blocks are in place for this to happen, lets get the wcp move out of way and see.
I sold half my holding back at £4.50ish but have added back at these lows hopefully we can get back to those highs.
If you have been holding decades it would be a shame if we fall back lower however markets are crazy at present and we do have a quality asset at a low sp hopefully this quality will shine through in the end.
Still not on the website and should have been up a week ago.
Rax,
Fair question, I’m think I partly looking to solicit a conversation. Partly, feeling the frustration you already feel.
But, my biggest point of frustration is seeing the share price down 10% because the board have failed to announce dates in a timely manner.
Their comments on dividends and pricing in December was unnecessary and spooked the share price. Then when the market expects the Q4 update the go silent. It is extremely poor.
From investor relations
We are expecting to announce our Q4 production update tomorrow at 7am UK time.
Hopefully tomorrow we will be singing the company's praises not long to wait.
Well Contango what's changed for you to take such a drastic change of opinion from .....I will buying this dip, ... to .....no better place to park your money in 2024, all in the space of a few weeks.
I unlike you don't rate the management with their half glass empty tone at every announcement so no doubt when they finally do post the update there will be caveat attached which will detract from what should be good figures from this world class asset.
In the unlikely buyout scenario can't see that happening with the wcp move in the offing, although after is a possibility, with these duffers at the helm probably 30% above the average trailing sp.
" I’m increasingly uncomfortable that the Q4 trading update has not been announced."
You are not alone Contango but if it's positive or negative is the question?
I’m increasingly uncomfortable that the Q4 trading update has not been announced.
Wonder if something is going on? Should an RNS have been declared? Communication?
Time will tell!
I, for one, would be very happy to accept £10-12 a share.
Total Assets were $1.24bn in Jun-23
3x todays share price is c. £950m
4x todays share price is c. £1.26bn
H1 delivered $110m EBITDA and there were issues.
At $250m annualised EBITDA the EV of still reflects a lower EV/EBITDA MUltiple that should be extremely attractive to larger global commodity players.
Similar, although above water.
I feel like the move needs to be substantially complete to Pilivili and the market prices need to rise on the back of recognised supply shortages.
Then KMR will be an extremely attractive M&A proposition.
IMO I think the board are failing to communicate and allowing time to pass without pushing the investment case for new institutional shareholders.
KMR are not convincing the market it is a strong company in vital commodity market. Recently institutional shareholders have sold down stakes and not been replaced by new II’s.
This is a failure of the board.
The assets are with 3-4x todays share price and it would be a crime to sell for less.
I'm still holding strong here, but I'm now reluctant to buy any more (even though I'm underwater and to average down is the sensible move, if the investment thesis is still the same).
What do you guys see happening here, a sale of the whole company (and if soo, at what price?) or do we just have to tough it out until the current commodities cycle rebounds?
Still nothing on the website about Q4 trading update.
Very poor communication.
To be clear I am a massive supporter of this company but what the hell????
I see the latest bulk carrier Ocean Innovation has been in Moma since the 11th jan and appears to be taking on daily shipments from the Bronagh J. Looks like this could be another big shipment into 1st Q 2024 to add to the 2 that just missed the cutoff at year end. I thought kenmare had 2 transhipment vessels but haven't noticed the second one for what it's worth. It does look like a good start to 2024 though, although the way the SP seems to react which way it goes is anyone's guess.
Sadly I now see KMR as a sitting duck for M&A and the material upside for shareholders in another larger Company.
I have been a supporter and fan of the board and Company for years (decades actually) but it is clear that the current structure doesn’t work and it’s time for KMR to be sold to a larger entity.
I don’t see much upside on today’s share price, I’d be delighted to get £4.60 but feel that may be a struggle.
No announcement for Q4 trading update on 12th January, this is extremely poor.
Could they be finalising the debt facility?
Could they be expecting an offer?
Why wait? I am really annoyed by the lack of communication and presentations about the continued profitability of the business blah blah, I just don’t see the ability to hold support from II’s or get respect for KMR under current structure.
There was a lot of trades yesterday selling 2 shares per trade, possibly trying to find a volume but it feels like a bizarre move.
The Company is trying to refinance its facilities and Q4 trading update should have been disclosed this week, typically 18th and announced a week before, so today but it’s not on the website.
Poor that no date announced and other than that there is just capex over next 3 years, which is planned to avoid downtime, so continuous production.
I checked Chinese prices and they have been rising for last 60 days in ilmenite and zircon so it doesn’t seem to be that.
However, I have seen random sell offs before and then announcement from II has sold. In my opinion it will be back above £4 very quickly plus a dividend to be paid.
Could be worse places for cash in 2024
Yeah I've done that, hence why I think it looks a good price. Just trying to work out why it's so cheap.