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All I would like to add is I would take the offer as well although I would probably plough it back in to who bought us. This is a great asset which with the right management and outlook would be an outstanding investment.
Thanks Saga, always value your comments.
You know I’ve been a big supporter but I feel like the board have fallen asleep at the wheel, much like they did before the Iluka Opportunistic Offer.
For me, with much regret, I’m in the same boat. Bring on the offer and time to move on.
Con, I was indeed around during the Iluka Offer. I certainly held shares back in 2015, if not earlier. Ithink the company is a "Sitting Duck" for an approach and this time I shall sell. The Board are too interested in playing "Miners", or should that be "Minors", than they are at building the company for the benefit of the shareholders. Some of the BoD should take their overstuffed pensions and go now, I am sorry to say.
Looking at the announced information (not available for H2 2023 yet):
H2 2022 EBITDA = $298m - $106m = $192m
H1 2023 EBITDA = $110m
Last 12 Months (LTM) EBITDA = $302m
Market Cap. Today = $368m
EV/EBITDA Ratio = 1.22x
Even if H2 2023 generates $140m EBITDA that means the current EV/EBITDA is 1.47x
Forgive me, and I hate to say this, but the Board has got to be feeling very vulnerable. I cannot see the Institutional Investors sitting back and saying its ok we will look through 2024, 2025 and 2026 with reduced dividends before we get a capital return of Net Asset Value.
If we assume a 3 year window to return $800m as an Acceptable Return and 15% as a Discount Factor, or Return achievable on cash over same period.
Then Selling today at $526m (or £4.64 per share) would allow the Selling Institutional Investors to exit. This represents 1.74x on LTM EBITDA and 1.77x on 2022 EBITDA.
In my opinion, the Company is a "Sitting Duck" for a Global Competitor to Buy KMR on the cheap and arbitrage several turns on the multiple.
Of course, I can turn this into a Buy the Dip argument and I do feel with the right approach KMR could realise $1.2-1.4bn on a sale. But if the current approach was right the Share Price would not be £3.25.
Hardly big buys compared to the number of nil share options acquired over the years.
MC bought £46,413 @ £4.32
TH bought £30,520 @ £4.36
MD bought £10,606 @ £4.24
These were purchases not options
Former derivatives trader, now M&A Advisory and deal with Wealth Management firms across UK & IRE
325 looks to be the bottom to me. Lets see what happens tomorrow. But your 331 trade in my opinion is a good buy. I wish had more cash to spend.
So let us be clear what is your job/occupation?
I deal with most of the large institutional investors. They do not talk to KMR and do not recommend them as a result. Much more can be done to bring new institutional investors and get KMR onto recommended lists.
It would also support their case to get back on to FTSE 350 and FTSE 250 lists if the stock was more widely accepted.
Secondly, the lack of liquidity and over reaction to news, both positive and negative, is not a good thing. It deters wealth managers and IFA’s as higher volatility and liquidity risk prevent them recommending the stock.
The discount to Net Asset Value is also supportive of my comments.
It’s pretty obvious to me, maybe I’m wrong.
How on earth do you know this:
The recent sell off is simply due to a lack of awareness of KMR in the market and its lack of liquidity.
Evidence please................
"An intrinsically good business with a falling share price is likely to attract predators, and in June 2014 Kenmare received an all-share takeover offer from Australian miner Iluka Resources. Worth about 17p a share (a 40% premium to the prevailing price of 12p), the offer valued the company at about $800m. The board rejected the offer, saying it did not recognise Moma’s value as a long-life, low-cost asset. Its stance was supported by investment manager M&G, which held 19% of Kenmare’s shares."
$800M was approx £480M at the time
My typical stance is in agreement with you.
However, the last Tender Offer those willing to sell at £4.20 (ish) was significantly over subscribed and this is now coming through.
The recent sell off is simply due to a lack of awareness of KMR in the market and its lack of liquidity. As normal over sold and now it’s hard to buy in size.
For me, trying to remain patient and let the share price correct to it normal low position, is frustrating.
But, with significant willing sellers just above £4 and Share Price at £3.30 I feel like all logic could be thrown out the window, if an Offer were to appear.
I would be disappointed to Sell May holding at £5
However, the larger II’s would 💯 have a call to make if it were Offered. I could see some defensive commentary. The Offer materially undervalues the business etc etc but I could see an aggressive approach being successful between £4.50 and £7.00 very easily.
For me the Board is responsible for the Market weakness and needs to respond.
Lots of BS about Red Sea and Valuations will not cut it for me. The lack of liquidity and Institutional support is the boards fault/responsibility.
As of this morning the glass half full / empty position became…. If the board would even confirm there is a f’in glass it would be a marked improvement.
Sorry for rant….. very annoyed
Thanks rich. I prefer the detail though and use stockopedia consequently. forecasts for 2025E havent been updated there as yet. I think Hannam have sound footing in the commodities space and have history with Kenmare. I think their detailed report is a good insight of potentially what is to come. Overall, I cannot shake the feeling this is being primed for a bid
I remember the opportunistic iluka offer. I am starting to wonder whether this is being worked for another one of those "opportunistic" bids. There were few large trades executed today. Would be interested to see what happens in the auction today and what is reported out of hours.
I very much doubt a 400-500p bid would do it since that is less than half the current book value per share. I think more around 700p or 680M
Not all were cash purchases. But agree none have sold
From memory they were all cash purchases.
The Director deals all look to be purchases or exercise of options and keeping the shares. No sells.
I have just bought some more too for the same reason as you.
Tip1
I normally look at the forecast on simply wall Street website it gives the average future forecast from normally 3 analyst they been talking of a decrease for a while but they don't always get it right
Against my instincts have bought a further 10000 at 330 which is too close to my average buy rate. I'm confident about this company with it's local employment policy and general results. Hope I'm not on a hiding to nothing.
Saga, from memory you were around when Iluka made an opportunistic Offer.
In my opinion, if a reasonable Offer were received the Board could be forced to sell.
I posted “Sitting Duck” thread, wondering if you feel this could become reality?
It is not my preferred option and would likely mean I’ve wasted a couple of years here but I can’t see the board being supported if an Offer can in close to £4.50-5.00 and KMR would be steal at that Market Cap for a large strategic Buyer.
I am surprised that only the market is factoring in the Red Sea debacle.
Hannan & Partners have revised volumes downward by 30% against the previous forecast for 2025E. Are you suggesting they've only been made aware of the material impact of the move? The surprising bit was the forecast of 2025E cost of sales which has been revised upward by 20% and exceeds than 2023E where greater volumes are produced.
Consequently they are revised down dividend to 18c/share from previous 36c/share.
About 2025 it's old news because of the mine move revenue is then increasing in 2026
the board has already put new dredgers on which will increase production also less shares on the market because of buyback
And they suppose to be looking in ways to get around the 25% with holding tax before I believe there was no corporation tax in Ireland but now it's 12% to fall in line with the EU so maybe they have to move there office to a different country
But noone knows the future prices but at the moment with the shortage are still good but not as good as a year ago
at the moment the board willing to pay up too 40% of the profits into dividend they could increase this to 50%or 60%if they happy paying off the debt longer