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Simo, I can't say I'm overly worried at this point despite the recent sell off. It's nothing we haven't seen before after large sales, there's a domino effect of others piling in and a race to the bottom.
It's clearly not good, but if they can get the cashew facility up to capacity - bearing in mind it's now the best part of 3 years late, despite the rhetoric - then some positivity should quickly return.
Bought a vastly overvalued cashew business. Some made a good bit out of that. What next. Their share holdings aren't retia dividend but I assume there are annual bonuses. All at the expense of us.
Collusion between broker and company. Their can be no logical basis to the broker's estimate of price. It would all be totally laughable, except the broker will have influenced some people to buy over a number of years with their "spin" (I can't call it research). So the BOD should fire the broker, and then fall on their own swords. It is virtually impossible for long term "investors" to ever break even here, because if the company ever does really get it's act together, it will be taken over by a bigger company at a premium to the SP at the time, but at 4 or 5 figure losses to the many of us. The whole outfit just stinks, purely IN MY obviously clueless HUMBLE OPINION, of course. I dread to think what great news will be heading our way tomorrow - I am not saying the company is leaky, but the word "sieve" comes to mind. Hapless, spineless management.
The simpler explanation is that - not for the first time - we have a 'follow the leader' mentality of shareholders.
They could have just lost patience like rugs / bored of waiting / following their strategy when a share drops x% / insert your own reason here.
On the basis of no news is good news, then this appears to be based on nothing whatsoever really. We had the usual DKL non-news last week with forward guidance, but if you're selling based on that, then you don't really know DKL.
I'd suggest a big part of this is the proverbial noose around the neck which is the cashew facility and its ongoing delays. If the board came out and said "sorry for the delay, all should be sorted whenever", then we wouldn't all have a wet finger in the air trying to figure out which way the wind is blowing.
As it is, the cashew factory was supposedly finished two years ago and we just have a faulty shelling machine - apparently.
At these prices, they should also be looking to buy back and cancel some shares. Or, heaven forbid, buy some of their own.
Another 10% down today.
While the potential opportunity here has been highlighted and is well documented. The buy recommended from brokers and other sources at over 3p was rushed and not serious.
1.9p is in my opinion a much better entry (while still high risk) and I would like to see the directors come out now in support and buy shares in the open market if they are serious in supporting a broker who thinks this is worth 9.5p right now. Otherwise fire the broker or resign!!
There are two more necessary things Harchris which won't happen anyway. One is the cabal needs to break up and there should be a dismissal or forced resignation instead of continually rewarding failure. Get in someone who can produce results instead of literally running the company into the ground. Secondly, send a signal to the market by buying in the open market in substantial amounts to align yourself to long suffering shareholders. I won't hold my breath!
Two things are necessary right now, one of which is within management's control, the cashew and palm oil operations and the other which isn't, prices of those commodities.
At least at the moment the uncontrollables are in Dekel's favour, as for the former we will have to wait a little longer to find out. The share price tells it's own story but there's still every chance of a sharp reversal happening all at once so I've added a little here at £11m mcap and hope that my timing ends up looking good.
Its says it all FK
in the last week or so - we've had
- Production updates with narrative suggesting the we are on for strong finish to the year
- impressive increases to the CPO price over the last week or so - as reported by Harchris
- WHI coming out re-iterating the 9p target price
net result - a 10% decline in the share price.
DKL are a totally busted flush - the market has seen them for what they are and given up! there's no interest in a self serving board who simply can't deliver for their S/Hs - through either lack of capability / effort or likely both.
its a long, long road back now - best thing DKL can do is shut up completely and focus solely on deliver and proving they can generate value to S/Hs
nobody has any regard for the puff pieces or updates - they have become an embarrassment - only results over a long period will sort this - short term results won't help either now because the market simply expect the board to dilute the benefits away from retail s/h - there's simply nothing to invest in here at the moment.
Down almost 10% today and we know that drops in DKl always presage bad news with sellers blessed with great foresight as to coming events. Must be more issues with the cashews. To think this was 20p at one stage. We have well remunerated board who have taken us backwards. No wonder they don't buy shares in the open market. They would be complete mugs! I wonder what excuse will be peddled out by Lincoln for the next bad news coming about the cashews? A pre Christmas lull in cashews eating but the last 10 days before November 26th have seen people being ravenous again...?
Now this gives cause for optimism:
https://tradingeconomics.com/commodity/palm-oil
Indeed fk1 and I can't imagine for a single second that shareholders of Norpalm Ghana would put up with such shenanigans.
I was wondering why j/k was reposting today's RNS begore I realised it was actually a broker note from WHI. Looks like a cut and paste job! I think DKL well Lincoln asks them to issue something to detract from the actual RNS and the feel obliged.
Are themselves close to a basket case. In July this year they faced going tits-up because they were running out of money. They needed raise £5 m to stay afloat. They did this by offering shares at just 3p a discount of some 86 pct to that ruling the day before. So I think we can take their price ideas on DKL with a pinch of salt.
That target has been in place for almost 2 years.
Today’s price 2.1p (another 4% down).
It’s misguided, meaningless and totally unprofessional.
Anyone who’s invested based on that recommendation when it first came out is way, way under water.
There is also no guarantee that the company isn’t going to issue more shares which will dilute the value more or that they start in another project (also announced years ago) that will waste more time and money.
Completely meaningless!!
WH Ireland retain 9.5p target.
"October production update: Well positioned for strong end to year in palm oil
This morning’s October production update from DKL further underpins strong expectations from the group’s palm oil business this year, with crude palm oil (“CPO”) production tracking ahead of the prior year for the 8th consecutive month. Positively, the company also report a promising start to November, with CPO production expected to be ‘materially higher’ than FY2022. Approaching year end, we remain confident of a very good performance from the palm oil business in FY2023E, validating expectations of a close to record financial performance from the palm oil mill driven by a combination of solid volumes and strong pricing. On the pricing front, we note the decrease in CPO pricing on both a monthly and YoY basis in line with international price movements; however, prices remain significantly higher than historic averages and at levels providing a strong return for DKL’s palm oil mill. Dekel is an increasingly diversified agricultural group with operations in West Africa, comprising a fully operational, sustainably sourced palm oil business alongside its recently inaugurated cashew processing activity. While the group did not update on the latter this morning, we highlight the significant upside this project presents as the group continues to ramp up production going into next year. With a strong showing from the palm oil business this year and expectations of a step change in profitability as the cashew project is bedded in, we retain our current fair value target of 9.5p."
Dropside, I believe Shai Kol lives there (he's always there in the conference calls) and Lincoln seems to visit a few times per year.
2magpies on the other side sums it up quite nicely:
"When prices are high, they have nothing to sell.
When they have lots of feedstock, the machinery won't work.
When they order new machinery, it is delayed.
When they take delivery of machinery, there are parts missing (or unsuitable)."
I was just thinking that in all the DKL RNSs I have seen and all the interviews, I don't recall ever hearing of any of the directors actually visiting Cote D'Ivoire. Or have I missed something, happy to be proved wrong? Directors of other companies like to be photographed, samples in hand visiting the overseas mine or factory, or stand next to the drill or truck with local workers. Stand to be corrected but has there been one photograph?
If i was a director, I may not be an expert in process machinery (actually I am but never mind) , but I would be out regularly seeing the issues and what needed to be unblocked. When Oltremare were failing I would have been camped out in their factory every day, drinking from their Lavazza machine and being a nuisance until they performed just to get rid of me.
Where is the energy from this board of directors?
I sometimes wonder if they have not fancied flying out to Abidjan at all!
Dropside. Tks yours !
Am sorry to say but I think you have hit the nail on the head.
Great Post! You were lucky you exited. Even 3p is probably unrealistic. Seems like the BOD are happy to just limp along. It is all a cabal so poor performance has no consequences like sacking someone who under delivers. The company policy seems to be just muddle along and hope it will come right in the end. Shambolic!
But none of your complaints are in anyway unique to DKL whatsoever. The BOD could have received full salaries in cash or split it between that and options. If the former had happened they'd have received far more remuneration by now and would have limited skin in the game. You can stretch the definition to whatever you want but the fact remains that by taking newly issued shares rather than raid the limited company coffers (as most executives do) they are now fully aligned with the success or not of the company. The difference between this failing as investment or reaching say 10p is tens of millions of pounds to the BOD - that is motivation. I'm not sure they have done that well in relation to the positions they hold, they certainly aren't being specifically rewarded for failure however as salary isn't directly performance linked they obviously still get paid for running the company. Investors fund fat cat salaries first and foremost, that's a simply fact.
As for your other points i'm sure they are valid.
My tone and narrative will certainly change if i see a change - believe me - i'm not here to make losses.
but im not though going to pretend reality is different to what it is - Dropside has nailed it below - the promises (some of which id even forgotten about) that were made to what has materialised is pitiful - this business can work - but it needs better leadership.
We really could do with a fundraiser/stacegibbs style very positive post right now!
Either that or a puff piece.
HarChris
"the poor performance so far won't be for lack of trying."
I really wish I could believe that, I really do.
HarChris, you don't get "it", do you?
I bought in the IPO float in 2013 and sold out a few months ago though I did trade it a fair bit too so my loss was real and painful but not as big as it could have been. It was a good story back in 2013, setting up a new facility in Cote d'Ivoire, on time to budget (no doubt the then Asian co-owners made sure of that) and a 1m plants a year nursery to revolutionise productiveness in the area. Don't hear much about the nursery these days, nor the RPSO certification, nor Guitry, nor the company owned plantations that were going to tie production, nor the fertiliser programme... Plant has never run above about 30,000 tonnes a year, about half capacity with an endless list of excuses and jam tomorrow.
Cashews are years behind and there is not been any realistic explanation or honest forecast along the way, frequently implication was 'imminent'. The next news will always be much better. Shareholders have been taken for fools.
With the assets they have this, objectively, is not expensive but the debt has crept up and is a material risk. With a new set of directors this could be a good investment but the board now needs clearing out. 10 years of failure, but directors fared alright with salary, share issues and buying out related party assets. Certainly not going to waste any more time on this, the current directors have no credibility whatever. If even Rugs has (nearly) had enough that tells a story.
Good luck all.