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Anyone got a stick so I can prod this to see if there's any signs of life?
I guess that one of the disadvantages of this share over TGA is that it’s so much smaller that it doesn’t attract the institutional investors on a large scale. But if the coal price remains high for the next 2-3 years will the fundamentals ‘win through’?
What are peoples estimates for the eps here? The Heller family have a sizeable shareholding so you could say that it’s in their interest to get the dividend back to where it once was if the earnings allow.
Just talking about the coal Bisichi sold for export (320000 metric tonnes in 2021), at the Richards Bay price 12 months ago, its market value was $32m. The the current Richards Bay price ($329), its market value is $105m.
That is an additional $73m or £58m, with no associated additional cost.
Forgive me if I am wrong, but that uplift equates to an £5.27 per share.
Given the global shenanigans going on at the moment, demand for South African coal is rising not falling.
I know that Germany is returning (five I think) of its coal fired powered stations to service as it looks to source as much power as possible from alternatives to Russian gas. I believe that France has done something similar with its ‘mothballed’ coal plant but they only have a couple as the country is mainly nuclear power.
Bisichi also has the added twist that it is linked to the property company LAS. I think the Heller family, which is essentially the BISI board own about 45M of the 85M LAS shares in issue.
I believe coal prices are down about 14% from their recent peak but still significantly higher than at anytime in the past few years. More info at this weeks AGM?
The price of coal has trippled over the last 12 months.
This has got a very long way to run.
Morning all, does anyone have any ‘back of the fag packet’ figures for profits, eps for 2022, 2023? I haven’t seen any guidance figures / broker estimates for what appears is a greatly changing financial situation.
I noticed an article in yesterdays press stating that West Burton Coal Fired Power Station is staying open over the winter instead of closing this September. This is to provide non gas powered generation support. The part of interest for BISI holders (potentially) was the part that said the station was looking to Africa and the US for coal supplies to replace the Russian coal which it has typically burnt in recent years…
Gas prices, which had dropped back over the last couple of weeks have risen sharply this week after Russia reduced supplies going to Europe.
I attended today's AGM and met nearly all the Board members. I've posted some reports on the AGM at the other well-known discussion site! It's a great time to be a BISI shareholder, the interims might conceivably shock the market on the upside, as alluded to in the recent TU. It's reasonable to guess that the annual results could be equally good.
PS: A Board member commented that there are no broker reports on the company, because no client could buy any shares in the company to profit from the research, given a notoriously illiquid market for the shares. So it's up to PIs to do their own research on the outlook for profits. My own research indicates that many unloved coal miners are currently trading on a 2022 earnings forecast of a p/e of about 1; BISI looks around that too imho.
… Tim, if the board wanted to make more shares more widely available would a share split not help towards this? And if the earnings going forward are going to be a lucrative as you believe then I’m sure the board will be doing special dividends. The Heller family own a large amount of shares - this would give them a bumper yearly bonus..
The value of export coal sold in the first half of 2021 was around £16m.
The same volume of coal in the first half of 2022 will be round £51m.
That is a gain of £36m, with no obvious additional costs to be associated.
I therefore expect a profit of well in excess of £30m in the first half of 2022.
I think that’s a little too high. My understanding is that there are royalty payments to the government of around 5% of revenues; 28% corporation tax payments in South Africa; and a 15% minority interest in the profits due to the BEE partner Vunani. But there’s no doubt that cash generation in both H1 and 2022 as a whole is going to be phenomenal. And not reflected in the share price.
Beza, it will be interesting to see exactly what the Board choose to do with the windfall. I think some of the windfall will be held as cash, invested in equities and in property. But I agree with you that bumper special dividends will be part of the package. I don’t think a share split helps. A very high proportion of the equity is held by the family and other long-term holders, who won’t be selling. A takeover offer by LAP is not impossible.
That makes very good sense, and I'm sure you are correct. I suppose Ii should add that,my very rough calculation took no account of the price of SA domestic coal, which, while substantially lower, still follows the market.
The additional encouragement is that the news is full of stories of coal fired power stations being reactivated, while Russian coal is excluded. H1 end higher than it started.
ES, you're right that the price of domestic coal is a major determinant of BISI's profitability. The data provided by the company indicates that domestic sales in 2021 were slightly loss-making. At the AGM they said domestic prices had started to recover, and googled articles in the media confirm that. But I've no idea to what extent. Without some knowledge of domestic prices, it's hard to know just how high profits will be in the first half.
I agree, Tim. Hence my crude calculations have assumed another period of zero profit from domestic coal - the variable being export coal.