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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.
What has happened here today? I can’t see an rns…
Https://www.telegraph.co.uk/business/2023/12/15/coal-use-hits-record-high-2023-net-zero-push/
The market is being pretty generous to high yielded shares today (with the prediction that interest rates have peaked) but it looks as though we’re missing out. Perhaps in due course.
Not particularly good reading in either article when you think about the 2023 performance. There are possibilities for 2024 but how many times have they then failed to then materialise !
https://www.miningmx.com/news/energy/55142-exxaro-confirms-no-improvement-in-coal-exports-despite-helping-tfr/
https://www.miningmx.com/trending/55182-tfr-announces-plans-to-up-tempo-of-coal-deliveries/
LOTM
Https://www.miningmx.com/top-story/55179-sas-treasury-throws-transnet-debt-lifeline-with-r47bn-guarantee/
The last section in particular is encouraging. Nobody ever talks about export volume, but is is equally as important as the coal price.
Bisichi, as a minnow, has suffered terribly from the Transnet capacity constraints.
$110 at 'normal' RB export volumes would be substantially profitable.
I think we wait until Thungela gives us the market and trading update that Bisichi never will. Should be next week/week after.
As I have previously posted, some obsess about the Heller costs, but a £1m reduction last year would have made no difference to the current tragic share price.
Michael Heller is unlikely to replicate his cost this year.
The real failing is the lack of communication, the lack of a defined strategy, and the lack of a dividend policy.
They seem to encourage the market to assume the worst.
Apart from these guys like to pay themselves much more than sharing it! They do look cheap though, even with the RB prices way off their highs. Have you any profit, eps and divi figures pencilled in for next time Edward?
I wonder if there is another company out there that could effortless pay out a divided greater than its share price from piggy-bank savings?
Wrong country.
Newcastle gone from $160 to $120 in a month
All the income here pays the wages
Won’t be long before this is
Far be it for me to tell you not to be cross about director costs, and I'm not saying I don't have a negative opinion.
I'm just saying that if they had paid themselves £2m rather than £4.5m in 2022, all other things being equal, I don't think the current share price would be materially different.
What would make a huge difference is clarity of onwards dividend policy, of investment holdings, of property assets, and of medium to long term strategy for their mining and investment holdings.
And the biggest difference of all would come from properly separating LAS and Bisichi.
EdwardSeaton,
For someone who say's he has a fair chunk of these, I find your last post absolutely astounding.
Directors Salary/Bonus & massive staff pay rises = money for them & not for shareholders.
The late M Heller got £200K basic & £580K bonus's in 2020.
1 exec director has been there since 2008 & doesn't own a single share in the company, yet took home £6,10K last year
Another since 2010 owns all of 40,000 shares & took home £1.078M last year.
The shares are impossible to value because of the director costs, while there filling there pockets each year you're getting crumbs & not for much longer..........
LOTM
Well, we know that M Heller won't cost £800k this year.
TBH, I don't much care what the directors cost - it's the opaque business structure and random dividend policy that irritates.
It makes valuing the shares a near-random exercise.
… completely agree. I think some have continued to hold in the belief that maybe the structural change of the directors following the death of M Heller would be the event that saw a change in particular areas, this being one of them.
I've just been looking through the accounts again & the amount this group of "fat cats" are awarding themselves in relation to the size of the company & what it is achieving is outrageous to say the least.
The directors banked £4.5M for 2022 (basically £4.4M for the 4 executive ones) .
The shareholders received half that amount in dividends.
The directors bonus is also linked to the bonus they've received in the previous 3 years! so the gravy train is stuck in a near endless loop of sheer greed.
They are only out to look after themselves, yes the sum of the parts maybe much higher than the current share price, but they will milk it dry long before shareholders get to see much of it. The coalmine has 6 years mine life left max (providing they don't come across other area's of it that are poor).
If you want to take a look at CNE, you'll see another company a much bigger one that had a board of directors full of themselves & not prioritising its shareholders. A one time FTSE-100 company no less. The new board of directors has come in & in the space of 7 months will have reduced G&A spend (which includes salaries) from $70M to just $20M & they believe they can get it lower than that!
Inside the next 4 years they will have saved shareholders more than the current value of the company!
BISI is a basket case, no accountability & no list of these so called investments & the quality of them or liquidity in them.
LOTM
Can we all take note of the failure of the fabled correlation between the share price of mining stocks and the price of gas.
RB Coal price moving up. Coal price in general edging up. Electricity prices edging up. Oil price up quite a bit. Bodes well - fingers crossed.
StraightAIM - I'm certainly not saying the UK property business is bad - I'm just saying that the market will always see it as a bizarre irrelevance to what is a coal mining business. It's just as if Oxford Nanopore were to buy half a dozen small country house hotels.
The property should be sold to LAS, and LAS should be rid of its shares in Bisichi. Clarity of purpose would follow (for both companies), and so would share liquidity.
I don't have stockopedia, but with 10.7m shares issued, I don't see how they get an £18m profit and 53p eps? (The 53p makes sense, but not the £18m)
And any attempt at forecasting profit necessarily involves wild guesswork on production volume, how much Transnet will let them export, and of course, the price of coal.
£18m implies a record last quarter in every respect. I would say more like £6m to 8m would be very good, if all goes significantly well between now and year end.
Interesting to note that since the trading update Stockopedia have new forecast earnings figures. £18M profit and £0.53 eps. So even on lower profit we are still only trading on a forward per of 2.8.
I actually don't mind the UK property business - I think it's value is obscured by the fact that it's owned by a SA coal producer. Imagine what value you would ascribe to a property business with £10m+ of property, annual rental income of ~£1m, and a further £10m+ cash/investments. Haven't looked into the potential London development but would imagine there's probably another few £m value in that.
The way I look at it you're effectively getting the (profitable) coal business for free, with lottery ticket earnings potential if the thermal coal price tracks higher for longer again (and the rail transport issues are resolved).
On the other hand... corporate governance issues are real, and the commentary about looking for further coal based M&A opportunities is a potential concern until potential deal economics become clear.
I completely agree that the property side of the business has no relevance to Bisichi and would be better off liquidated or sold to LAS. It is a legacy of the curious structure of the business that Sir Michael started with (LAS), and has no relevance to Bisichi.
Likewise, Bisichi has no relevance to LAS, and the 41% partial ownership of Bisichi by LAS just muddies the waters and sucks up much needed share liquidity.
As I said to Andrew Heller at the AGM, they either need to merge the businesses into a cohesive conglomerate, or far preferably, separate them. What they currently have makes no sense, benefits nobody, and has no synergy, particularly to the casual investor.
I get what they are doing with their investments i.e. investing their retained profits within the industry in anticipation of a future date post Black Wattle. Clearly they have employed John Wong as an in-house investment manager to run the investments, although the ambiguity of those investments has very poor optics.
Yes they have nearly £8m of borrowings, but they also have £11m of cash and mined coal, plus all the coal in the ground.
I look at it this way. If the assets they have are disposed of, developed, invested and operated even just reasonably well, there is a pile of good news spectacularly in excess of the pitiful current market cap.
The excess staff costs last year were bonuses not pay rises, and are not set to be repeated this year. Their director costs get some people very wound up on here, but in truth, doubling or halving the director costs would have practically no impact on the share price. Plus Sir Mike was a very large part of those costs last year, for obvious reasons not repeated.
I hate mission statements, but if ever there was a company that would benefit from one, this is it.
What are they aspiring to do?
How are they proposing to do it?
What is the dividend policy? (ie Thungela is 'at least 30% of FCF').
Sir Michael was a domineering character and called the shots. Andrew and John are genial characters with decent qualifications. As of now, the change of regime has yet to become apparent, but it will.
I am pleased to hear that the truly terrible website is shortly to be replaced.
EdwardSeaton,
I'm not sure its hilarious, but yes it could do that in theory, but what about the near £8M of debt it has & the near net £4M of trade payables (after deducting the trade receivables) ?
The property portfolio should be sold off immediately, except for the potential development one where they nee to finally make a decision to seel it to someone else or go ahead & build it. The property portfolio is not increasing in value & all they do is pay £200,000 a year to a company controlled by the other son to manage it for them.
Payoff the debt with it, thus cutting out the £450,000 in interest payments in just the last 6 months.
No-one knows what these listed investments are or how liquid they are to get out of.
As for the coal operation, it would seem that all of these issues last year & this year are no-ones fault, because no-one seems to be accountable for the failings.
The staff got massive pay rises last year not because of there good performance workwise but simply because the coal price rose so much.
LOTM