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A hilarious fact is that Bisichi could buy back the entirety of its share capital with its investment portfolio alone.
Its cash, its property and its mining business are currently valued at zero.
Yes, the standout negative to me is the incredibly low export volume due to Transnet. I rather suspect the bigger players were able to bully their coal onto the trains that did run, at the expense of small players like these guys.
Probably my one actual concern is the rather vaguely described 'geological issue' that hampered production in H1 2023. A lot of money was spent in H1 2022 investing in what was described as an investment in future production capacity at Black Wattle, so it is disappointing to hear they have been struggling to produce.
If you dropped 2021's domestic and export volumes onto H1 2023 costs, the picture would have been very substantially rosy.
I suspect we are in for a period in which optimists are able to buy very cheaply, and pessimists exit the scene.
Looks like a few investors are throwing the towel in.
Seems to be a few issues that have contributed to the poorer performance compared to equivalent period in 22.
RB coal price and Transnet are out of their control but seems like they are addressing the output levels from their mines so this should be reflected in the FY results
Management shouldn’t be taking so much cash out of this business, morally wrong
TGA is clearly the much better pick in this sector
Appreciate the additional colour.
I think assuming that I can get comfortable with the numbers (being real), it really comes down to how, if and when the cash is distributed to shareholders. Some risk of a take private on unattractive terms.
Will dig further.
Very old, family operated company.
I would say fraud less likely here that pretty much anywhere.
Father recently died.
2 sons, 2 companies.
One company (LAS) owns 41% of the other (BISI).
Communication is poor. Website is feeble, liquidity miserable, dividends conservative, and coal rules out many potential buyers. But then you have a very stable and substantially profitable business, with cash and cash equivalents alone greatly in excess of market cap.
To my eyes, it is madly cheap, so I have progressly bought up a substantial holding. It will be interesting to see what effect the generational change has on the style and presentation of the company.
I also hold Thungela. 10 times the size, superb communication, vast dividends. There are very few cheaper shares out there. This is one of them.
Hi All,
Stumbled across this almost by accident and couldn't believe my eyes when seeing that it's trading for ~0.75x 2022 FCF! What's the story here? Is there any risk of fraud?
From what I can tell from a quick 20 min look:
1. Management barely communicate with shareholders.
2. It's not clear how existing cash assets are invested (mostly in other public companies?).
3. No guidance on what % of FCF will be paid out to shareholders. The div yield, although increased, is very modest in the context of how much cash they are generating.
4. They own a random real estate asset in the UK (why?!) which is again poorly described.
Seems absolutely crazy...
Yes, I have addressed the transparency of their investments on here before, and had a 30 minute conversation with Andrew Heller about it after their AGM, which I attended.
I understand that the investments are holdings in larger companies rather than small, speculative, minnows.
I 100% agree with you on liquidity. I also told AH that in my opinion, the 41% partial overlap of share ownership of Bisichi by LAS was the worst of all worlds. I would suggest a full merger, or complete separation of the two companies. As it is presents a confused buggers mess of unbalanced incentives.
He did comment that the appointment of John Heller to the Bisichi board would increase the call for Bisichi to pay bigger dividends.
Regarding the yield here. It's not that generous...
There are lots of investment-grade companies with track records of paying consistent 8-10% dividends and bid/offer spreads in the 10bp range. Why is BISI going to attract people? The divi is completely pointless when the spread is this wide.
"Ultimately, if this was a tech company, those numbers would be worth hundreds of millions of pounds."
I doubt it. Anything this illiquid is also shunned in the US. This is one of the least liquid stocks in the UK. It's very rare that anything in the US is this illiquid except on the pink sheets.
@Edward, there needs to be more transparency in precisely what equities they own. We have no idea where they've invested the money. The vast majority of investments in small/AIM stocks lose money, so the market is never going to give much value to such investments. There also needs to be some attempt at improving the liquidity - a 10% yield is completely unattractive when the spread is this large (often beyond 10% !). And the managemnet needs to stop operating entirely for their own benefit as they do.
The above are what I refer to by 'terrible' management.
I suppose to be fair, when saying 'terrible management', one is saying (quite specifically) terrible at doing things that would lead to the share price reflecting the fundamentals of the company.
Bur I'm not sure it is correct to say they are terrible at making the company profitable, because it is more profitable than some companies in the FTSE100.
And I must add that Thungela, which communicates superbly, and also pays extraordinary dividends, is almost as insanely cheap.
Ultimately, if this was a tech company, those numbers would be worth hundreds of millions of pounds.
I know that coal fired stations bought fuel like crazy when Europe said it was stopping buying Russian fuel.
With the mild winter that we’ve just had, many are still using up the coal which they bought over a year ago. It’ll be interesting to see how demand is affected once the current stocks are reduced.
Bull:
- 10% divi
- Potential for significant capital gain?
Bear:
- 4 May: Bid 180/Ask 200. 15 Aug: Bid 130/Ask 150 after bumper results...
- Terrible management who seemingly want to take this private in the 50-100p range
- One of the widest spreads on AIM, wiping out the divi for a year or more
It’s almost as though the board has a KPI on how bad they can make themselves look.
I’m wondering why this is still a PLC
Profit £26m
Cash and shares £24m
Market Cap £15m
However ineptly the directors of the company might present their story to the outside world, this remains endlessly amusing.
No interest here. Some selling too before results at or around the end of the month. I wonder what management will say.
My holding is split over two different brokers. One is now showing and all correct but the other is yet to apoear
Yes. They couldn't not pay the dividend, and say nothing.
May I suggest you change platform...
Has anybody received their divi? I thought that payment date was 28th July?
Interesting times ahead here… I wonder if Boris’s and Labour’s energy plans are credible..
https://www.energyvoice.com/renewables-energy-transition/519736/vattenfall-calls-off-norfolk-boreas-due-to-rising-costs/
Very informative - thanks Edward. Fingers crossed they improve their PR.
The beginning and end of it is:
'During the year the Group’s non-current investments held at fair value through profit and loss increased from £3.6million in 2021 to £12.6million due to net additions during the year of £8.2million (2021: £1.2million) and gains from investments of £0.7million (2021: £0.7million). The investments comprise of £6.8million (2021: £1.56million) of investments listed on stock exchanges in the United Kingdom and £5.8million (2021: £2.07million) of investments listed on overseas stock exchanges. The Group’s listed investments are primarily in entities involved in extractive and energy related (including renewable energy) business activities.'
It was one of the points I raised with AH - a third of their Net Assets are only vaguely described. He seemed reticent about the amount of detail they are allowed to publicise (I guess because Bisichi is not an investment fund), but acknowledged that greater clarity could and should be given.
This is a perfect example of the sort of thing Bisichi could do at zero cost that would transform the appeal of their shares.
As much as I despise Mission Statements, I think this is a rare example of where a clear 'This is what we are trying to do' statement would be much appreciated.
Has anyone been able to decipher what investments Bisichi have made? What companies / funds have they invested in? Regards