Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
P.s. if you look at the intraday prices BGEO, and CGEO were recovering until 11am, when the Georgian PM tweeted saying he had complained to US state Dept about the US govt fomenting revolution attempts (allegedly financed by foreign NGO's hence the new law) in Georgia in 2020 and 2023.. It's proper Alice in Wonderland stuff..
https://twitter.com/PM_Kobakhidze/status/1786308052515168630
I think the poster you quote from BGEO has got the wrong end of the stick..
The law proposed is similar to legislation introduced recently by Putin in Russia, and is designed to clamp down on dissent and free speech. It could be harmful to the fairness of Georgian national elections due at the end of the year.
By copying the Russian legislation the ruling Georgian Dream party is pivoting away from the West and towards Putin. If adopted it would put in jeopardy the EU accession status recently granted (and which has 80% support) Quite apart from the political fallout, a return to Russia's orbit would be damaging economically and of course to BGEO, CGEO..
More here;
https://www.bbc.co.uk/news/world-europe-68933064
From BGEO board
"RE: Russia2 May 2024 23:41
This will be it
https://foreignpolicy.com/2024/05/01/georgia-russia-foreign-influence-bill-protests-democracy-eu/
"If passed, the law would require all nongovernmental organizations to declare if they receive a certain amount of their funding from abroad."
I've always thought a lot of Russians put money in Georgia so they won't like it!"
BGEO down by the same amount. Need to check what's going on there
I was perplexed by that too - did someone sell a huge load of shares ?
See Mays rns for the quarterly improvement in NAV.
Big fall today and not a spec of news to back it up.
1st May update was at least good could be interpreted as excellent.
The market is weird at the moment.
Shares in Issue 42.67m
Market Cap. £561.59m
Market Size 1,000
PE Ratio 2.395543
Earnings 549.3536
Dividend 0.00
Yield 0.00%
I first bought BGEO 18/5/2018 , shortly after on 29/5/2018 it demerged.
And I had equal amount of BGEO and CGEO .
On 1/7/2019 I buy BGEO a second time acc shows , selling that second buy and out completely of BGEO on 20/11/23.
So I still have original CGEO ( From demerge split )
Then I buy GHG ( Georgia Health ) about 5 months after the second BGEO buy on 20/12/19 ( first buy ) then same amount again 30/12/2019 , and smaller amount on 8/1/2020 third buy ( maybe a rights ? )
On 4/10/2022 GHG are exchanged for CGEO shares but not on a one for one ratio.
like BGEO appear to have gone up 33% this calendar year to all time high .
Higher interest rates and other things boasting the Georgia economy apparently.
I reread this from poster SD235 on the thread I started on BGEO.
RE: Might be of interest to some here .7 Oct 2022 14:34
As I read it Georgia health was demerged from bank of Georgia before Georgia capital. When Georgia capital was demerged it held 66% of the shares of Georgia health. Georgia health did badly on the UK stock exchange so was bought back. I think we can only sell companies to other companies as there is no demand for Georgian companies on theUK stockmarket. Even bank Georgia trades on a p/e of 5 and Georgia capital is on at least a 60% discount.
I think the only way to increse share price of Georgia capital is to pay a dividend but buy backs on a 60% discount have to come first.
Particularly liked the accessibility, frankness and awareness of this comment in the boss' statement to shareholders:
The discount of our share price to our NAV per
share has remained too wide, despite our share
price increasing by 40% during 2023, and we
responded to this by buying back more of our
shares (perhaps the best investment we can be
making at the current levels of NAV discount),
and reducing leverage in the business
Been asleep for awhile!.
Another alternative would be to simply distribute the BGEO shares in specie to the CGEO shareholders.
CGEO "managing" this investment adds zero value . As far as I know they don't have a board seat so what exactly they do is beyond me.
The BGEO stake is currently worth £440m = just over £10 per share of CGEO. In theory the CGEO share price would drop from its current £13.00 to £3.00 after the distribution. So the remaining portfolio of £709m / £16.50 per share would be trading at £3. Something would have to give.
Good first post after 12 years membership!
No more than Mr. Market, I'm always very dubious about the claimed NAV per share (£24.23 at Dec '23 and will have increased as the value of BGEO has risen in Q1'24). One way to sort this out would be to sell the BGEO shares which have a current value of approx £433m. At Dec 23 CGEO had debt of £86m. This gives a net surplus of £347m after repaying the debt. CGEO has a current market cap of £562m. Do a tender offer for its shares to the value of £347m. In theory the revised market cap = £215m or £5.00 per share v the current trading value of circa £13 per share.
Per the Co's NAV statement at Q4'23 total portfolio value = GEL3,672. BGEO accounted for GEL1,226 of this leaving the remainder at GEL2,446 = £709m. This is nearly triple the revised market cap which should surely be revised upwards in due course.
All of the above are approximates but you get my drift. I suspect that there are multiple reasons for not doing this such as debt repayment covenants and timetables, restrictions on the ability to do such a a large scale tender, ability to place such a stake in BGEO, etc, etc.
However the status quo is deeply unsatisfactory. We are currently paying the management team in CGEO to mind our investment in BGEO which is possibly the biggest stumbling block to any portfolio reshaping. Only sorry that I ever divested my stake in BGEO into CGEO a number of years ago.
Dps1329; thanks your post.
'strategic' buybacks aside, the key for me is BGEO buybacks - where they continue CGEO's will, just as a function of maintaining their stated hold level. I feel no BGEO buybacks = no CGEO buybacks -.at least until the debt is cleared/ minimised.
I believe they finished the US $15mm buyback program that was announced in October. They said on the earnings call this week that they will be buying back more shares but are waiting for more info on what dividends they'll receive from Bank of Georgia.
--------------------
So the first question is from Bram Buring. With regard to the 15% over the cycle target for NCC, could you please elaborate where we are in the cycle and the implications for the larger capital returns? Will the current phase in the cycle suggest we see larger returns when NCC hits a low-teen high single-digit level?
Irakli Gilauri:
Bram, to be very short, probably that's high single-digit, that's where we will be able to see the bigger buyback in terms of the auction-type buyback. In terms of the tactical buybacks is what we've been doing. We will continue to do so. Mainly, we have not announced the tactical buyback, smaller ticket size, what we've been announcing for a number of reasons, but one of is that, Bank of Georgia, which is a main dividend provider to GCAP have not announced their dividend for 2023 due to the acquisition they had to postpone as I understand their annual results announcement. And once we know it, we will be more -- better positioned announce our tactical buyback program.
Is the share buyback program finished ? none announced this week
The share price has been moving for quite a while, but yes, plenty more upside.
Personally I'd prefer a maiden dividend. The CGEO buybacks are already accelerating not only because it's major holding BGEO is maintaining a relentless buyback ( so CGEO is selling to maintain it's % holding and thus realising cash) but because their other businesses are starting to build scale/cashflow/profitability too. Yes there are a couple of inconsequential non performing companies in the portfolio, but there are some interesting holdings here (pharmacy?) Which are all contributing to a considerable discount to NAV.
I may prefer a dividend to a buyback, but do agree, one or t'other will happen once they have further deleveraged, which they are doing at some rate.
This has been such a successful investments for me, so much so that ordinarily I would have sold out. Successful because I saw deep value here when it was ignored/out of fashion, and that value has started to shine through. Despite it's appreciation, and portfolio progress, it is still ignored/out of fashion, still offers a deep discount to NAV and deep value. So I'm staying put despite it being proportionally more than I would like.
I think a listed spin out of the pharmacy co may be the catalyst (for greater appreciation) and me moving on. I see that happening within 18 months.
These guys are buying back 15k shares per day in a stock that does 60k average daily volume. And based on management comments on the last few calls, it sounds like they could increase the buyback significantly in 6 months after a bit more progress has been made deleveraging. The share price could start to move.
So, just saw the financials are out - haven't dug into them in depth, but they look good to me at a summary level.
I think this is the only share I own that I have been happy with these last few months!
As stated in CGEO's last update, the ongoing buybacks at BGEO are causing it to sell some of it's BGEO in order to maintain is preferred level of holding in BGEO.
Surely beyond BGEO's continued success adding to the NAV here, the necessitated sales must be adding cash to the balance sheet, as CGEO's last update suggested progress in all its investee companies. Will they use that to deleverage, or potentially a maiden dividend?
Inflation has now fallen to 5.3%.
Monetary policy Committee meeting 10th may
Had a stop loss on them. Tripped on news of svb. Maybe buy back if they continue there fall.
"I still hold a large amount of Georgia capital in my sipp"
Not anymore cought by a stop loss.
I still hold a large amount of Georgia capital in my sipp
Monetary policy committee meeting
https://nbg.gov.ge/en/monetary-policy/committee-meeting-calendar