Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
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Does anyone on this fine board have any thoughts re this ? Sam
Bought more. Dividend just so good . Sold some braemer shipping with a dividend of 2.9. Here its 7.7 . no brainer as i want more income
Sam,
The divi is 6.75% at this price.
The fall today is in line with its current trading range, 180-210. It’s performance is inline with other independent power producers since 1st Jan.
You can see the peer comparison here...
https://www.marketscreener.com/quote/stock/CONTOURGLOBAL-PLC-38649308/company/
You will also note the shareholder distribution. GLO only has a 20% free float. Excluding shares in treasury.
Following the last buy back of 16m shares that leaves them below the 25% market threshold. However, as part of the ‘Primary Markets Effectiveness Review’ that is set to change to 10%. The FCA are transitioning it atm.
https://www.fca.org.uk/publications/policy-statements/ps21-22-primary-market-effectiveness-review-feedback-and-final-changes-listing-rules.
It will also impact mcap thresholds for full listings. £700k becomes £50m is my interpretation at a glance, there are other changes.
https://www.fca.org.uk/publication/consultation/cp21-21.pdf
But for GLO it will open the door again for another buy back.
Brandt said that the best thing GLO could do with their cash was to buy their own shares. Or words to that effect.
Whilst an investment here is not likely to show huge capital gains (but you never know) it is a solid income play. Using some basic TA will show you the support levels and any buyers adding sub 190 are imo in bargain territory!
It’s not unexpected to see a dip now and the SP pick up again ahead of the results and divi announcement on Mar 18.
It’s amazing the intel one can get for free now on the internet to empower folk to make their own investment choices!
Usual caveats
Trek
Hi trek, thank you so much . Am an amateur investor compared to your good self and have much smaller funds invested. Was not aware of the data you have kindly shared. Strongly believe though this is a good buy. Unfortunately further funds do not become available until end March
Trek:
Thanks for the good balanced post and totally agree. Added a modest amount yesterday and again today as the dividend is 5x what you can get in bank interest - and there is the chance that capital gain will appear if you want to take it. Guidance was raised yet again and the Brazil Wind divestment may be not long in being concluded and announced.
Trek
Shame more don't post in a similar vein.
Never commented before but this is so good from Trek I have to say, thank you. Humble, comprehensible for all and useful.
Hi Trek, delighted your kind reply to me got such nice deserving reviews. I have been reading further and contour appears to have a PE ratio of circa 145 .1 and dividend cover of 0.12 . I got these figures from the this is money webpage. Wondered what your thoughts were as at first glance they don't look the best. Best wishes and have a great weekend, Sam
Hi Sam,
That is the problem with many publications. They are often run by bots and not updated accordingly. Morningstar is notorious for having out of date major shareholding’s.
Divi cover is (was) 1.9x. It likely same or better now based on increased revenues for Spain and cost improvements in Brazil.
Have a look at the company presentation and interims 6th Aug...
“Second quarter dividend of 4.465 cents per share, equivalent to 3.203 pence per share[3], to be paid on 10 September 2021, reflecting our commitment to a 10% year-on-year growing dividend supported by our strong and visible cash flows. Dividend cover remains strong at 1.9x[4]”
[4] Dividend cover of 1.9x, defined as LTM Parent Company Free Cash Flow divided by declared dividend.
Also some quite correctly mentioned the debt which is likely putting a ceiling on this.
Is gearing is serviceable that is the question. The other is corporate debt structure. We fortunately have a mix of CLN’s and fixed rate bonds. Some are LIBOR or Eurobond + so vulnerable to rate increases but the majority is fixed. Also some was being paid down and some expired in Dec 21.
Worth not the debt structure is spread with plants having an independent financing structure that protects the other group assets. Borrowings $458m down from $487m during period.
As for the pe I think we will get a better view in March but I have seen ranges of 345 - 150. I can’t get my head around how this would be trading at anything like 200 x earnings. Doesn’t make sense.
Usual caveats
Trek
Hi Trek, thank you so much. Really really interesting and much appreciated. Thought my financial trading knowledge had improved a lot over the last year or so but am a total amateur compared to you ! I am very much looking forward to the results. I also have watkin jones who report next week who have been very good for me so far. One mistake I perhaps made this week is that I sold Ferro given what is going on with Russia and Kazakhstan is very much in its orbit. Gone flying since but we will see . Thank you once again and have a great weekend
Re the PE….
SP/EPS 190p/4.4p (0.06USD) = 43. Or adjusted Pe (after fx) = 190p/2.9p(0.04USD)=65.5
Caveats the first includes capital swap to pay for derivatives of $37m. The second doesn’t include fx gains, yet.
This is the problem with pe. Don’t assume low is good. It could be a reflection of a declining business model or high is bad. It could be debt repayments, capex assignments etc. you have to look beneath the numbers.
The golden indicator re cash is increasing FCF for an INCREASING divi after all else is paid for…..
This will do me!
“ Shareholder returns
? Second quarter dividend of $29.30m or 4.465 cents per share, to be paid on 10 September 2021
? Including today's announced dividend, a total of $411m has been returned to shareholders since listing via dividends and share buybacks
? The Directors continue to expect to increase the dividend annually by 10% ”
This has been imo overlooked by the market where analysts just take headlines.
Usual caveats
Trek
Evening Trek,
There's just one thing that bothers me, and some others, about GLO, and that's its debt. The debt/equity ratio is around 10 times, as at end-2020. Quite a bit of this debt is due for repayment in the next three years, I believe. But what proportion is set at floating rates or LIBOR-based? If rates rise this year, even if still behind inflation, there will be an impact on GLO's P&L, surely, not to mention sentiment.
Hi O&W,
Yes it is the deb5 holding this back as per my earlier post. You can see a breakdown in the table in the 6th Aug RNS...
“4.13. Borrowings
Certain power plants have financed their electric power generating projects by entering into external financing arrangements which require the pledging of collateral and may include financial covenants as described below. The financing arrangements are generally non-recourse (subject to certain guarantees) and the legal obligation for repayment is limited to the borrowing entity.
The Group's principal borrowings with a nominal outstanding amount of $4,580.9 million in total as of June 30, 2021 (December 31, 2020: $4,871.8 million) primarily relate to the following:...
Table follows which won’t past....
Approx $2bn of $4.5bn is either Libor, Euribor, TJLP or US-LIBOR tied + a fixed %.
Debt reduced by $300m. Some expire Unless extended...
“(2) On February 18, 2021, the Group acquired a Thermal portfolio in the United States of America and Trinidad and Tobago representing a total of 1,502 MW. The group entered into a term loan facility agreement in December 2020, and the loan was issued in February 2021 with an outstanding nominal amount of $175.0 million, bearing incremental fixed 2.5% to 4.5% rate, maturing in December 2021 (with option to extend to June 2022). The legal entity Lea Power acquired as per this transaction issued 6.595% Senior Secured Notes under an indenture dated July 24, 2007 which are due to mature June 2033. The remaining nominal amount is $187.5 million as of June 30, 2021.”
But imo even with 4x25bp rate hikes debt is well serviceable due to anticipated prorata increase in energy costs.
Usual caveats
Trek
This info can all be found in the H1 investor presentation on their website:
- Pg 15: $3,038m of debt is at the asset level - and is (in simplified terms) set to amortise over the life of its respective asset/PPA (i.e. no refinance requirement) and non-recourse to the parent (i.e. doesn't represent contagion risk even if any given asset fails). Only $1,537m is at the corporate level and has a "5-7 year maturity profile".
- Pg 16: 83% of all debt is fixed rate, only 17% floating. 81% of assets are inflation protected, 19% not.
Conclude from that what you will!
Just read todays posts . Way over my head all but think a good investment. My degree for my sins was in international politics and strategic studies which resulted in a great career which included no 10, White House and numerous heads of states. In retirement though when I read these posts think my degree should have been in economics or finance ! At least I have a few in gsk and they are exciting times with them ! Have a great evening all