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Uninformative spread 3.0 - 5.5 based on very low trading volume
We must patiently wait for real news, even though the price appears to have dropped alarmingly
Last year AGTA had a slight operating loss. Assuming not much has changed, the share price hasn't gone up much on the 1 year, but commodity prices are up 40-80%. Should turn a profit next trading update
Agta
Thanls PR, a sound summary, probably will be taken back into private hands in 12 to 24 months. GLA
Given how illiquid the stock is - by my reckoning at least 80% tightly held leaving at most 4m (likely much less) with market makers - the spread is inevitable.
Hate to say it but anyone bothered by the spread or concerned about immediate P&L might be better off with other options. This is one to either buy & hold or avoid until trading conditions improve in Mozambique, or Hamish Rudland decides to take the company private... the assumption being that the business manages to stay afloat.
not to mention a 75% spread!
Strange market - 6 min auction for a 26 share uncrossing!
a 70pct spread is somewhat offputting any trades.....ridiculous
"I thought the minimum volume for a SETS order was 75K?"
To clarify, AFAIK the NMS in this stock is 75K and any SETS order that improves the best bid or offer should be at least NMS otherwise one could easily manipulate prices with tiny orders.
One wonders who is behind today's activity... Higher than normal buying volume in the AQSE and small selling on LSE.
Someone managed to trigger an auction by bidding for 399 shares at the offer price. Weird IMO, I thought the minimum volume for a SETS order was 75K?
So corn futures have rallied massively from the middle of Aug and are still on a big roll gaining over 5% yesterday and over 3% so far today.
https://www.tradingview.com/chart/?symbol=CBOT%3AZC1!
This impacts negatively on corn imports into Mozambique especially coupled with a weak metical but positive for local corn prices. I'm not clear whether it is negative or neutral for AGTA - rising prices implies higher costs which might be difficult to pass on in a weak economy like Mozambique's. We should find out more in the coming days when HY21 results are posted - hopefully she will not simply regurgitate the same old data from the FY20 report.
https://tradingeconomics.com/mozambique/composite-pmi
The Standard Bank Mozambique PMI inched down to 49.3 in December 2020 from 49.4 in the previous month. The reading pointed to the tenth straight month of contraction in private activity, as the impact of the COVID-19 pandemic remained weaker than seen earlier in the year. New orders declined at a faster pace, amid a drop in client numbers and reports that export goods took longer to arrive at destinations. Meantime, output continued to expand while employment rose at the strongest pace in ten months. Purchasing activity dropped for first time in three months, due to a fall in new orders. On the price front, input costs increased for first time in nine months, due to a weaker exchange rate and higher staff cost. As a result, selling prices increased marginally. Finally, sentiment strengthened, on hopes of a global recovery due to the development of COVID-19 vaccines.
Wow, this BB is like the magic bus; ages go by without a comment and bang two comments one the same day!
It feels to me that Mozambique is such a tough basket case it will take a few more years for AGTA to turn the corner if they manage to survive. I think the team is trying the right things - new product lines, the new DECA Snax idea, the attempt to significantly scale production but the national environment is unsupportive... being unable to buy maize from smallholders because transport systems are shut down? What gives? 18% interest rates? Hopeless government...
RetiredBanker - I see some value in tactically increasing exposure (averaging down as you put it). The SP can't be too far from its base. Unless a major holder decides to dump I doubt MMs have a big enough inventory to offer. And there's always the speculative chance that Hamish will make an offer for the remaining 50%.
Beardozer - good to see another poster, it was beginning to look like PrimeRate was the only other person still monitoring AGTA
Just read through the annual accounts from 31st Mar - pretty grim reading when you think Covid impact wasn't even in those figures ... admittedly most African countries have had to continue as if nothing exceptional going on in 2020 because they needed to stay "open for business" in order that people could get any food to survive, which is rather more important than the minor chance of getting a flu virus which typically only kills people over 75, of which there are precious few in Mozambique !
Anyway having done well on my gold mining stocks in Q2 / Q3 this year I decided that I might as well average down my considerable losses on AGTA and so I've bought another 250k shares over the summer.
... realised that I'm not far away from having to declare a 3% notifiable holding in the company !!
Prime - agree that Caroline & Hamish aren't the "thieving bastards" of the past ... in fact I think that 76k total for ALL of the BoD is rather pitiful remuneration ... probably explains why in a set of annual accounts to 31st March that are published on 24th Dec they don't seem capable of providing any "subsequent events" update on the three quarters of 2021 that have already occurred.
So if any of the BoD are reading this bulletin board - here's my recommendation to Hamish as 50% shareholder
... he awards himself and Caroline 1mm stock options each exercisable at 20p before 31/3/2022 ; a further 1mm each exercisable at 30p before 31/3/2023 ; a further 1mm each exercisable at 40p before 31/3/2024 ; a further 1mm each exercisable at 50p before 31/3/2025 and a final 1mm each exercisable at 60p before 31/3/2026
I'd have no issue with the total share capital being increased by 50% from current 21mm issued shares if the sp was above well above 60p in 5yrs time.
Here's hoping for a better 2021 - Happy New Year to whomever is reading this !!!
With so few shares in issue and such a small Mkt. Cap. it's looking interesting.
It's worth keeping an eye on transactions over on the AQSE: https://www.lse.co.uk/ShareTrades.asp?shareprice=AGTA.GB.PL&share=Agriterra-Ld
Multiple occasions observed over the last few weeks where MMs have duplicated an "O" type sell trade as an "AT" or "UT" sell trade. Being SETS traded automated trades have an effect on intraday % moves - e.g. today's 20,000 UT tracks the shares as 25% down. Not sure what's going on but seems manipulative to me.
Company results might be released this month if not delayed again. Quite amateurish of the company and Caroline Havers that they are multiple periods late in posting results.
edit: post above should have said Sierra Leone, not Senegal.
@RetiredBanker: you are correct in your assessment - Africa is a growth market and food is a necessity.
"Africa" is a gigantic generalisation. Significant growth has occurred in some parts, just not yet Mozambique! At least not over the last 5 years. And no one can guarantee anything over the next 5 years! Even with the current m/cap of just £850k one could still easily lose a small fortune in this share. Still very much a risky venture!
The current board is entirely different from Phil Edmond's crew. His people dropped off like flies after Caroline became the chair person, his CEO fell when Hamish put money in.
Whilst completely unobservable from the share price Caroline and Hamish have the company on a tighter leash. One of her first acts was to ditch the company airplane, exit Senegal and bring in new equity. Over the last reported period she slashed group central costs - lord knows why they were ever so high. At $41k she's the highest paid board member for two weeks a month's work. The others receive roughly $10k p/a - not quite "thieving bastards" level.
My impression is that Caroline and Hamish are finally inflating the company with "honest management" as RetiredBanker put it. My understanding is that a new in-country CEO will be appointed soon which will allow us to assess progress.
Mozambique's recent sad difficulties have actually played to the company strengths enabling materially higher distribution through NGOs. Combined with new distribution into the "informal" market and rising maize meal prices, FY20 & FY21 revenues should see a material uplift.
That said the company faces serious short term macro headwinds with the high national lending rate and weak currency. The lending rate is gradually dropping - now roughly 16% but the metical's weakness will pretty much reverse any gains because the company reports in USD. The exchange rate might stabilise in the future as a consequence of FDI for the LNG project in Cabo Delgado - the US DFC recently approved a $1.5bn political risk insurance deal in support of the project.
Directors in isolation on an Indian ocean island big game fishing. It is a board meeting so who is paying? No various.
Calling the BoD 'thieving bastards' is probably a fair description. Sadly Phil Edmonds & Co have been fleecing private investors from their White Nile days and the replacements seem to have learnt how to continue that behaviour. I've personally lost a small fortune on this stock over the past 5+yrs ... always kidding myself that Africa was a growth market and food a necessity.
Some honest management could probably make this a profitable company worth atleast 100p per share very quickly if corruption wasn't so endemic.
What accountants Do Agra employ if they take so long to produce the set of accounts. Or is the theft etc bigger than they admit?
Anyone attend the AGM held on 27th Dec 19?
Just logged into my Barclays SIPP and saw it report the value of my AGTA holding had jumped 260% to be marked at 22.825p !!!
I quickly pulled up this BB to see some startling RNS that had caused this transformation - but alas we haven't been morphed back in time 3yrs to better days ! C'est la vie !