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Financial results were good especially from the container terminals.
April's container terminal numbers are fabulous especially at RG. If it continues along those lines then its going to be a bumper quarter & Terminal utilisations are going to jump considerable. That in turn will lead to even better results in cash terms for the terminals because of the amount of fixed costs that are now being spread across so many containers.
Good times ahead I'd say.
The big questions for the morning is whether Ocean Wilson is going to move to quarterly Dividend payments as well.
GLA
LOTM
Wow looks like Wilson & Sons are moving to quarterly dividends as I suggested they might & the Q1 one is a biggie!
Shareholders will receive Dividends in the total amount of R$0.17273618 per common share issued by the Company ("Shares"), which is equivalent to R$76,002,001.83 on this date
Still waiting to see the actual quarterly numbers but this suggests they might be even better than I was expecting.
LOTM
No worries LOTM, I am a bit nervous around penny shares and thankfully held back, each to their own. Hope MIRI improve for you, ATB.
Wilks
I'm truly Sorry to everyone who has bought in recently to MIRI, following me highlighting the company & asking people to take a look at it.
Yes I did know a fund raise was a possibility, but I didn't see it coming so soon & its slightly larger than the £5M max requirement that I thought they might needed.
The issue price is a disgrace quiet frankly, if that's the best the company can do with the pipeline of opportunities it has & all the hints its been giving through informal channels. The CEO has a lot of explaining to do & his position is in Jeopardy for sure after this, if not untenable.
Again my sincere apologies to everyone.
LOTM
LOTM, thanks for the info, top researching. MIRI looks promising - on my radar now, have a good 'un.
Wliks
Hi Wilks8,
The Wilson & Sons 1st Quarter results are due 7th of May & they should be pretty good compared to Q1 2023 especially the container terminal revenue etc.
Will be interesting to see if they go to quarterly dividend payments ! then hopefully OCN do the same to stop the massive share price drop each time.
& watch out for the April monthly figures there going to be some special ones in there! :)
------------------------------
If you want to have a look at another share that I think is very special indeed ( I only discovered it on 8th April) its called Mirriad code MIRI & research it then please do, but go to the CNE chat first of all because I posted the story there, with links etc & it will make your research much easier.
I believe the market cap should be multiples of where it is right now ....... like 10 fold inside 2 years
That will give you something to do on a Sunday !
& hope to hear your view on it, or see you on the MIRI chat thread soon!
LOTM
Aw don't rain on my parade LOTM. Thanks for the reality check but have held these for an age and am overjoyed at that final arbiter share price. Succulent...ish divi, bit better? ATB
Hi Wilks8,
And I forgot to say the OCN Investment returns have been truly awful.
If they'd invested the cash back in 2007 into the index they quote instead, then the investment portfolio wouldn't be valued at $330M it would be north of $850M, plus all the management & bonus fees paid !
LOTM
Hi Wilks8,
Steady on ............ "investment returns through the roof, succulent divi in June " you need to learn what's what.
Wilson & Sons doesn't have an investment portfolio like OCN does, it does have investments in a couple of tech start-ups & that's about it.
No they wouldn't get the OCN dividend in June, they would only get about 35% of that amount because Wilson & Sons has already paid our 2 dividends that OCN didn't pass on to us & are lumping the 3 together & short changing us OCN shareholders at the same time.
GLA
LOTM
'Strategic options' still being considered re Wilson sons t/o (come on MSC, back of the sofa cash for you, treat yourselves), investment returns through the roof, succulent divi in June, all seems promising here. Many a slip etc and all IMVHO but glad to hold. GL holders, spectators.
Hi Vestry,
Sadly the return of the UCLA route has been very short lived indeed.
There was 1 programmed for mid April but has now disappeared all together. None arrived in the past couple of weeks & none are programmed to at least 10th May.
LOTM
Monthly figures are out for March, some good numbers all around the Wilson & Sons business.
LOTM
Hi Vestry,
Thanks for the story, helps explain the return of the UCLA route at Salvador that's gone missing the past few month's.
Only 4 ships on the list & one of them has been cancelled & No ships listed after 3rd April.
So will wait to see if this actually firms up or turns out to be another on/off route.
For the record UCLA has been on the Salvador list of routes for many years, it only dropped off it a few months back.
LOTM
Here is a news story that is 2 days old
there are others about investment in logistics software
https://www.porttechnology.org/news/wilson-sons-expands-service-to-central-america-and-us/
being very patient with this
Thanks, Vestry!
Do you have links to the other 'trade expansion' stories, pls?
I'm interested in finding out whether the Gulf Arabs (mainly Abu Dhabi/AD Ports) are 'in the mix'.
TIA and ATB
WIlson Sons finished Friday at an all time high in Brazil . My calculation for the NAV of OCN is now double the present share price . I often wonder why Brazilian investors dont buy through the London Stock market . There were also two news stories of trade expansion in the region that gave me confidence that even if the Take Over bid did not materialise , that the profits from the ongoing business would sustain the share price I bought some more at 1342p
To be honest I'm still getting over the shock of what I found out & wrote yesterday.
I never actually imagined it was quite that bad.
I wish I had done that research a number of years ago, it might have helped galvanise other shareholders to do something about it.
Anyway I was thinking about it a lot more yesterday & made me realise this.
The 2 families & directors got shareholders in 2007 to part with 42% of Wilson & Sons for all of $206M or $11.50 per share back then.
Today that same 42% of Wilson & Sons is valued in the market at roughly $439M (roughly $3.50 per share adjusted for the additional 6 new shares they got for every original one so effectively $24.50 per old share).
Now there needs to be some sort of adjustment for the shares Wilson & Sons sold themselves during that process to raise their own cash for investment.
But its not a pretty picture & that's before you take into account all those dividends that have paid out over the years to the 42% holders, that we could have received instead.
The group has considerable borrowing nowadays roughly $500M that is costing us around $35M a year in interest payments. That's a cost of $1 per OCN share per year.
Anyone outside of those with a vested interest in the cosy Hanseatic set-up, would have realised that this isn't working years ago & said, either Cash in the portfolio & pay down the debt or your simply going to track the index or index/FPAF instead.
That would have left the overall debt at say $200M, but at the end of year 1 you've saved $21M in interest payments. Use that to reduce the debt further, so your debt now stands at $180M, in year 2 the saving rises to $22.5M & your able to reduce the debt to under $160M. In year 3 your saving is close to $24M & you debt falls to $135M at the end of it. In year 4 your debt has fallen to roughly $9M PA compared to the original $35M PA you were paying & at the end of the year the debt's reduced to just $110M.
By the end of year 7 the debt has virtually been fully repaid & therefore shareholders are effectively close to $200M better off in NAV terms ie the NAV is up over $5 per share than it would otherwise have been.
At this point the dividend could be increased by $0.50 per share & the rest going into the bank account to cover/sustain the dividend when the next downturn in Brazil occurs & profits drop.
GLA
LOTM
For anyone wanting some context.
In May 2007 when OCN sold off approximately 42% of Wilson & Sons it raised $206M from doing so.
By the end of 2007 that cash along with existing cash & a small existing portfolio of shares were valued at $274M.
By the end of 2008 the valuation had dropped to $212.4M.
So depending on your view you could say that in the intervening 16 years the investment portfolio has gained all of 10% to 30th June 2023, or if you want to allow for the 2008 downturn the gain over the 15 years is around 38%.
FPAF was at approximately 300 at the end of 2007 (yes it was a small part of the portfolio even back then) & dropped to @ 190 by end of 2008. Since then depending on which one you want to go by its either risen by roughly 675% or 1050%
So saying they've cost us $300M over that time might be a considerable understatement....
GLA
LOTM
So how will the investment portfolio have performed in the 2nd half of 2023 ?
It only gained $12.7M in the 1st half of 2023 compared to the loss of $50M for the whole of 2022.
As I have said on multiple occasions, Hanseatic are not worth employing they are useless to say the least, fund selection over the years has been abysmal other than them finding Findlay Park American Fund (FPAF) which has consistently performed well.
Unfortunately at times Hanseatic has sold down part of this FPAF holding possibly because it has become such a heavyweight in the portfolio compared to all the other rubbish round about it. If they hadn't sold it down it would probably have made up around 17% of the overall fund at the end of 2021 compared to the actual holding at that time of 11.2% ($39.264M)
FPAF didn't have a good 2022 that's for sure losing 22.4% of it's value during that time (1900.9 to 1474.3 from the FPAF website).
The OCN holding dropped in value to just $24,154M that's a massive drop of 38.48% so for at least the 3rd time in our history Hanseatic has sold a significant chunk of the FPAF holding around $8.75M in value this time round.
During the 1st half of 2023 FPAF regained in value (from 1474.3 to 1708.5) that's 15.88%. In the portfolio it only gained in value to $27.754 or 14.9% so another very small sale might have taken place in between.
In the 2nd half of 2023 FPAF increased in value (from 1708.5 to 1898.6) to virtually the same price it was at the end of 2021 a gain of 28.78% on the year.
So instead of OCN recovering virtually all of what would have been the FPAF losses of $8.8M in 2022 (out of that $51M total loss) we're going to find out that the recovery was far less than that amount next week at around $7M.
So far in the 1st 2 months of 2024 FPAF has risen further to 2016.7 an increase of 6.22% on the December number. That would have translated into a gain of over $2M on the 2021 valuation, but sadly we'll be seeing a lot less than that amount of gain.
Hanseatic's card is marked -
The OCN directors have cost OCN shareholders $300M+ over the years with this pathetic portfolio of mutton dressed up as lamb. Get it sold & invest the money in the index instead or happy for 15% of it to stay in FPAF & the rest in the index.
Yes the directors of OCN should get a slightly increased fee for doing this but the annual savings will amount to $5M in the fees saved that go to Hanseatic & those running all these under performing funds.
I'm also looking out for any slight of hand regarding the Wilson & Sons dividends that have already been payed to OCN but not passed on to us yet & how they might have been used to prop-up the investment performance at the tail end of 2023.
GLA
LOTM
Thanks for this!
Hopefully, there'll be an update shortly, to factor in the end 2023 numbers...
pp 22 and 68 list 'recent acquisitions'and seemed to suggest 'open to offers/look what we've got';
pp 54 shows geographic expansion plans (S/T Uruguay and Guyana, longer term Colombia, Ecuador, Peru). Curious that there's no ref to the J/V in Chile (?);
pp 17 and 32 show existing connections. I look at the gap across to Congo (Pointe Noire), where expansionist AbuDhabi Ports has just taken a 30 year concession and wonder if they're in the frame...
ATB and GLA
Wow Wilson & Sons have just released a new presentation which is like 112 pages long with lots of expansion opportunities.
Well worth your time studying it I'd say.
https://ri.wilsonsons.com.br/en/
Just click on the link from there.
GLA
LOTM
What premium do people feel is in the current price for the strategic review being executed positively?
Realise the share price has strengthened a lot in the past year (how time flies!) but the performance of Wilson Sons and their outlook has improved significantly. Even the investment portfolio should be humming along nicely.
My target price here for a positive outcome was around £19 but it feels like that could be moved higher and the downside for status quo also.
I think we are close to an announcement
..."Andy Murphy at Edison Investment Research has a value realisation of 2,564p per share on the group’s equity.
For the year to end December 2023 he estimates that group revenues will have risen to $472.6m ($440.01m) with a massive pre-tax profit of $107.2m ($38.5m), lifting earnings to 159.2c (loss 51.9c), while maintaining its 70.0c per share dividend.
The year now underway could see it boost revenues to $521.7m, taking profits up to $135.5m, earnings of 214.7c, enabling a 100c a share dividend.
My View – Looking For 1,600p Very Soon
Within the next four weeks or so we should be seeing the group declare its 2023 Final Results, which going on the Edison estimates should be well received.
We should also get some confirmation on just how well the current year is perceived by the group’s Management.
But of much more interest, just what is going on in terms of the ongoing Strategic Review and the number of offers that were previously mentioned for both parts of the company.
That helps to give the low p/e and healthy yielding shares, currently 1,335p, quite a bit of a sparkle valuing the company at just £472m.
Despite them having risen from 820p last June and having already seen quite a swift ascent, I now fix a Target Price of 1,600p on the shares, hoping for some early positive news.
At that time is it possible that we might also get a more enlightening detail on the strategic review and its potential outcome, especially if any of the offers have progressed?
https://masterinvestor.co.uk/equities/wading-in-play-in-overseas-waters/?mc_cid=18f5b17c20"
Apols for editing/formatting...
GLA
..It looks to develop its businesses by maximising economies of scale and efficiency and improving the quality and range of services that it provides to customers.
Major Strategic Review Now Well Underway
On 12th June last year, the group responded to some Brazilian media speculation by stating that:
“The Board notes recent Brazilian media speculation to the effect that the Company is negotiating the sale of its 57% owned subsidiary, Wilson Sons SA.
The Company confirms that it is undertaking a strategic review involving the Company’s investment in Wilson Sons.
That review, which will consider all potential strategic options, is currently at an early stage and there can be no certainty as to its outcome.
The Company has not received any formal proposals from any third party with regard to a potential transaction involving Wilson Sons.”
The Board recognises that there are divergent views among the group’s shareholders regarding its non-correlated asset holdings.
The review is intended to provide a platform for it to optimise the asset mix, to enhance returns, and to drive growth in the longer term.
On 15th November last year, the group issued its Q3 Quarterly including an Update on its strategic review regarding its investment in Wilson Sons:
“The company has retained Banco BTG Pactual S.A. as adviser to Ocean Wilsons Overseas Limited, the holding company for the Group’s indirect investment in OW Overseas (Investments) Limited and in Wilson Sons.
The company confirmed that BTG Pactual has received a number of indicative non-binding offers for its indirect investment in OWOIL and in Wilson Sons.
“As the strategic review process remains ongoing, there can be no certainty as to its outcome and the indicative non-binding offers received by the company are highly conditional.
The Board continues to evaluate all potential strategic options and will update shareholders further in due course.”
The Equity
There are some 35.36m shares in issue.
The larger investors include Hansa Investment Company (26.45%), ICM Investment Management (12.95%), Dynamo Internacional (4.99%), City of London Investment Management (4.94%), Unicorn Asset Management (3.04%), Menhaden Capital Management (1.02%) and Chelverton Asset Management (0.85%).
Two Board members also represent large holdings – William Saloman (13.18%) and Christopher Townsend (11.42%), both of whom are Directors of Hansa Capital.
Analyst’s Views
A consensus of analysts suggests an average Price Objective for the group’s shares is 1,675p, with the highest view seeking 1,750p a share.
Continued...