Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
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Stockopedia
"It’s interesting to see that Carclo’s 2022 results and forecasts have been updated. " Where did you read that please?
It’s interesting to see that Carclo’s 2022 results and forecasts have been updated. For 2023 they (the house broker I presume) are forecasting a slight drop in revenue to £123M, a drop in profit to 2.5£M and a slight fall in eps to 2.5. In 2024 the figures are £133M revenue, £3.9M profit and eps of 5.3, which is a jump of 55.9% over the 2023 eps forecast.
Very interesting Wigwammer. Not being an accountant myself I’ll go away and try and get my head around the figures. Great to hear another accountants take on things. Speaking of figures have you looked at Bisichi (BISI) Mining? In short it’s a coal miner that needs coal to sell at about $110/ tonne to be in the black (pardon the pun). For the last few years that’s about all it’s been but Putins antics have resulted in RB coal prices moving to over $200. The west are currently scrambling to buy coal. Regards
It’s a poor piece of research beza, IMO... 1) they are too pessimistic about dividend reinstatement because they assume the actuarial deficit and related payments are fixed ad infinitum, when in fact they are reviewed every 3 years. The level of actuarial liabilities are highly sensitive to the discount rate - the IAS liabilities sensitivity for example is 16% for every 1% move in the discount rate. Using March 2021 data, the prelim actuarial assessment estimated the liabilities at around £250m, but since then the discount rate has moved from 2%, to around 4%. Taken on it own this would suggest a circa 30% or £75m reduction in the liability, nearly the entire actuarial deficit. A materially lower deficit would likely mean materially lower pension payments. Of course, this will likely not help much with the payments review to be completed in July, but does suggest that dividend payments may be reinstated long before the “decade” that small caps life believe is a clear inevitability.. 2) small caps life are wrong to state that using a PE is inappropriate for an indebted company. The EPS used in the PE calculation is AFTER interest paid, meaning the measure does adjust for interest paid and consequently the scale of debt… 3) small caps life have miscalculated their earnings yield. They state that even assuming 30% EPS growth gets them to a 3.8% earnings yield for next year. In fact, the reported underlying EPS from the year just reported was 3.1p, and adding 30% gets you to 4p. At a share price of 22p, this results in an earnings yield of 18.1%, far higher than the 3.8% small caps life state… in short, be careful taking anything small caps life tell you at face value, sounds like poor quality stuff.. ATB
What do you accountancy guys think of Carclo’s prospects after the results on Thursday? I’m a holder here. I’ve read an article on “Small cap life”, I think the author is a Mark Simpson. He puts the company on an enterprise value of 53p/share but then proceeds to say that the pension obligations will take up all of Carclo’s free cash flow for the next ten years making the reinstatement of a divi unlikely because the trustees will not allow it.
Market is unimpressed by anything just now. Not particularly a CAR problem, it is more or less everywhere a shortage of buyers Vs sellers.
Yes very good news. I particularly liked under Strategy: "In the short-term, the focus remains to grow organically in each of its existing markets, but in the medium to long-term this may be supplemented by accretive and synergistic acquisitions."
I've not come across 'accretive' before. Accretive: Characterized by gradual growth or increase.
I'm looking forward to an announcement shortly after 31 July 2022 about the agreement with the banks and Pension Trustees.
Happy with that - better than I'd expected given what we already knew about global supply issues and inflation in H2.
3.1p underlying EPS is very acceptable and a good base going forward given the new contracts being won and implemented in TP and the recovery in Aerospace.
Good to see $2.75m coming into the Group post balance sheet date due to a sale and leaseback of the Tucson TP site.
Also to note that the pension contributions have now peaked and will fall this year and next to stabilise at £3.5m. Great to see the IAS19 pension deficit fall by a third in just one year.
I can't decide whether to roll the dice and put another 5k shares in the pot lol - either way sure i will make wrong decision
Finally !!!!!!!!!!!
It won’t be pretty at the moment but as a long term share holder I want to know what the next 18 months holds .
Wonder what's happening? Normally we would have a notice of results by now and then actual results by end of June?
https://inews.co.uk/news/science/uk-covid-rates-weekend-cases-rise-omicron-zoe-app-1697797
COVID cases to surge past 200,000 a day?
Something tells me results are on the way .
If it’s anything like Filtronic , 20% rise on the announcement I will be very happy.
I am somewhat confused by when Carclo will be announcing their results as I thought it was June 6th but having contacted them an announcement of the date is due soon .
As for what they will announce, the negative will be serious issues with supply , production, lockdown in china etc which I feel is already priced in . But the big big positive news as I have just announced in my company’s results is the impact on profits the pension deficit will have . We have had a huge swing from £2.2 million profits to £6.2million, £3 million of which was down to the change in the pension deficit and that deficit was tiny compared to Carclo.
So what we might see is a dramatic change to the financial health of the company which might point to a small chance of a dividend next year which would be great .
Yes, exactly Beza.
Pardon my ignorance here but are you guys saying that the increase in the bond yield will accelerate or potentially accelerate the reduction in the pension deficit, or enable the Carclo to commit less money into the scheme. Thanks in advance.
Even so Wigwammer the deficit at the uear end should be well lower. Fill Yr update April: " In addition, the Group balance sheet has strengthened considerably throughout the course of the year, in part driven by a reduction in the IAS 19 pension deficit."
Plus we should get a further update in the coming results.
Jmo
That’s true, Chris. It’s going to look very out of date when it arrives, with the AA corporate bond yield moving from well under 2% to well north of 3.5% now.
I expect the bond yield increase is too late for the 'triennial actuarial valuation' which was due March 2021. Details of which seem very delayed. The November 2021 Half Year Results says "No initial data has yet been released on the triennial actuarial valuation of March 2021"
The elimination of the deficit would also free up circa 2million for a dividend . (The amount we pay annually less tax plus deficit interest saving)1.5p would leave some for further investment. Pie in the sky at the moment I suppose but we are moving in the right direction. Imo.
A material near term kicker for the share price could be another material reduction in the IAS 19 pension deficit. This was £33.5m at the end of September 2021 with the AA corporate bond yield at 1.8%. With the yield rising to 3.1% at end March 2022 (the FY reporting date) and 3.7% now, we should expect the deficit to close in a fair bit. The correlation with the change in the actuarial deficit is likely to be high, thus additionally potentially reducing future cash outflows relating to it. Of course, there are a lot of complicating factors that go into calculating the deficit so we will have to wait and see, but it should be moving in the right direction. By way of valuing the effect - a £10m reduction in the IAS19 deficit equates to 13p on the shares. An elimination of it equates to 44p on the shares.. ATB. IMO
You only have to look at Franks Doorenboschs bio on Carclo's website to see why he is the person for this job.
Wigwammer (on lse) has stated supply issues are indemic. The company said in their interim report they were taking action in this regard having invested an additional 3million on raw materials to ensure a supply at that time. But its not only supply chain issues he is appointed for. He is looking at ways we can improve our operations and make the company more efficient so that we an take on the extra business the company believes is there for the taking.
It's funny that folks tend to highlight what they think as negative and miss the underlying fact staring them in the face, Carclo is a real turnaround growth story. That fact will be reflected in the share price at some point for sure. Jmo
Not sure when next results or trading update is.