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Forgot to say :-
It looks like a win win to me!
Why would the loan be affected by any dividend?
It looks like the company has sufficient funds to satisfy any repayments & any dividend would be cream on the top!
This potential dividend would help us long suffering shareholders & may wake the Market up to this share and boost the share price.
My bad. I'm inferring from this document
https://www.petradiamonds.com/wp-content/uploads/21-03-10-Completion-of-Restructuring.pdf
With the bondholders controlling the company via their shareholdings and the covenants then in my mind it amounts to their ability to block and payout. Why would they authorise a payout when they are earning over 10% on their loan?
Where in the prospectus does it say the bondholders / loan note holders can veto any return to shareholders?
If PDL are within the restrictive / distribution covenants, then its within the companies means a dividend to shareholders can be made. Considering PDL are getting close to going from Net Debt to Net Cash, they could start thinking about paying a dividend in calendar year 2023. I think for 2022 they may want to build up a significant Net Cash 1st to be well within covenants and protection for their stress test scenarios, organically fund expansion projects etc.
If you look at page 61 of the Interims Investor Day Presentation back 22-Feb-2022, capital allocation strategy is all laid out. But buy backs are lowest priority. Before that would be Dividend, Special Dividends, however before both of these there are also other priorities first too (Approved expansion projects at Cullinan and Finsch, Further growth projects, Early debt redemption (1L then 2L)).
https://www.petradiamonds.com/wp-content/uploads/22-02-22-Petra-Investor-Day-Presentation-FINAL-22.02.2022-correction.pdf
Read the terms of the restructuring. Bond holders can veto any return to shareholders and I don’t see them agreeing to that, as effectively it’s their money. This won’t rerate (putting to one side the overall market) until the fist slug of debt gets paid down which will likely be next year.
Great call Nelson.
It's good to se some common sense being put forwards.
Does anyone on the BOD look at these pages?
We cant early pay the debt with the covenents applied so I suggest the BOD instigate a buy back of shares at this lowly price - keep tehm in treasury and release for cash later if we need to or cancel if as i suspect we keep powering on.
If the market doesnt re-rate you, re-rate yourself!
The cash flows being generated are impressive.
Wondering about the debt pile - anyone know what the interest / repayment terms are and also convertibility to stock which results in the normal dilution for existing holders ?
Never bought this stock but aware it's more into South Africa and less into / exiting Tanzania and has undergone painful restructuring recently etc. Which hopefully means a steadier proposition going forward.
All this good news Petra keeps putting out has a negative pact on the SP.
I know we are in a **** storm with world and in a recession that could last 2 years but come on the FCF this company is earning is ridiculous!!
UK market is broken and has been for years . If this was on the US exchange it would be £6.
Petra Diamonds
Sales results for Tender 6 of FY 2022
Like-for-like diamond prices up 7.7% on previous tender
Richard Duffy, Chief Executive Officer of Petra Diamonds (Petra), said:
“The Tender 6 results conclude a strong year for Petra’s diamond sales both in terms of pricing and the demand we have seen. The significant interest shown at Tender 6 bears testament to the ongoing strength of the rough diamond market. We have seen pricing support across our product mix, with particular strength in the prices of both white and coloured gem-quality stones over the last 12 months.”
Petra announces the results of Tender 6 of FY 2022, at which 569,496 carats were sold for a total of US$93.0 million, bringing total sales for FY 2022 to US$584.5 million across Petra’s mining operations.
Tender 6
June 2022
Tender 5
May 2022
FY 22
12 months to
30 Jun 2022
FY 21
12 months to
30 Jun 2021
Diamonds sold (carats)
569,496
635,806
3,536,371
3,960,475
Sales (US$ million)
93.0
86.1
584.5
406.9
Like-for-like rough diamond prices increased by 7.7% on Tender 5 (announced on 3 May 2022) while full year like-for-like prices increased 41.5% compared to FY 2021, with the balance of price movement attributable to product mix. Strong demand, with resultant price increases, was evident across all size and quality categories.
No Exceptional Stones were sold during this tender cycle. During FY 2022, revenue from Exceptional Stones totalled US$89.0 million (US$75.2 million from Cullinan Mine and US$13.8 million from Williamson) compared to US$62.0 million Exceptional Stone revenue (all from Cullinan Mine) in the previous year. Petra classifies ‘Exceptional Stones’ as rough diamonds that sell for US$5 million or more each.
Mine by mine prices for Tender 6 are set out in the table below:
It’s a commodities sell off just as before any recession. The good mining companies will bounce first when the onslaught is over. If you didn’t take profit at the130p - 135p area then that is your look out. Mining companies SPs are cyclical in price. Not saying how low this will go, hopefully not a lot further.
PDL doesn’t polish their mined diamonds, but they do have a very nice deal in place with stargems whereby they retain a 50% interest in the profit uplift from the sale of exceptional diamonds once polished and sold on to customers. All adds nicely to their bottom line.
Everything is up today…..really ? plenty of commodity stocks with bigger drops than PDL today.
Explanation…..You took my advice and sold at the bell…..well done for taking action rather than just moaning on here every day.
28 just remember you can't polish a turd because Petra definitely ain't polishing Diamonds!!
The share just dropped savagely for some reason so forget market sentiment something stinks here 81p finish.
Everything up to today as well so give me an explanation please and no sugar coating please ??
@itsaponzi……..interesting name………interesting posting style.
In LSE BB hibernation for circa 15 months since March 2021 (around same time as the PDL restructuring was completed…..any coincidence?).
Reappears by joining the PDL posting board around 3 weeks ago.
Initially with a few short bland messages including claiming to have bought into PDL at 80p. (Btw: a smart investor would have taken some profit off the table at say +50% after the fast run-up in SP before the inevitable partial retrace as per Fib levels).
As the days have passed by the messages are becoming progressively more like rants with mostly negativity. Again a smart investor would recognise the recent broad market negative sentiment, particularly for commodity based stocks and accept that PDL is simply following this overall near term sell-off trend and does not warrant particular posting of negativity compared to sector peers.
Then today we get the subtle mention of our recently departed friend Mr Carats…..who long outstayed his welcome after promising he would stop posting when the SP hit his sell price (somewhere in the 80s if I recall correctly) but failed to honour his word as the SP continued to climb to around x 1.5 his exit price within a short period. He kept on embarrassingly posting here much to the delight of the PDL BB community…….Such sour grapes he had.
But he did eventually recently depart…….Hmmmmm……So you know what I am left wondering……..clue: revolving door.
Anyway at the current SP there is still a circa 10% profit to be had if you sell now @itsaponzi….its not to be sniffed at and would put you out of your misery…….and the rest of us too.
Try to enjoy your weekend.
I spoke to soon it just turned red !!
Dead little cat bounce today !!! One green day out of 10 you don't want to many of them.
There is no bottom to this share now so more pain next week .
Where is Mr Carats he was the only talking sense but got slated and banned by the looks of it. All the payed rampers are a disguise LSE chat.
Enjoy your weekend everyone.
The knife starting falling months ago at 139p !! 1.7p old money what a complete shambles after the Restructuring and 50m debt payments every Quarter.
But definitely cheap when it passes 7 out 8 stress tests with forward earning upto 600m dollars this year leaving a lot of FCF.
But we live in funny times now and no stock is safe in a manipulated markets like UK and US.
Even Gold is struggling to move which says it all.
As for Bitcon that is going zero
AIMHO
Might be catching a falling knife here, but bought at 87.5, looks cheap to me
Hello 80s
7 constant red days will it be 8 tomorrow I wouldn't bet against it !!
Goes to 99p then drops of a cliff in a few minutes for some reason.
The daily volume is shocking so it's easy for the MMs to manipulate it either way.
We need some serious interest In this share otherwise its going to drift to new all time lows.
Updates only get sold into so best wait till after then .
Shares in Petra Diamonds (LON:PDL) are currently trading at 93.5p, but a key question for investors is how much the current economic uncertainty will affect the price.
One way of making that assessment is to look at the profile of the stock to see where its strengths are. The encouraging news is that Petra Diamonds has at least some of the traits that are often associated with two influential drivers of investment returns: high quality and a relatively cheap valuation.
To understand where they show up, here's a closer look:
GET MORE DATA-DRIVEN INSIGHTS INTO LON:PDL »
Quality at a reasonable price
Good quality stocks are loved by the market because they're more likely to be solid, dependable businesses. Profitability is important, but so is the firm's financial strength. A track record of improving finances is essential.
One of the quality metrics for Petra Diamonds is that it passes 8 of the 9 financial tests in the Piotroski F-Score. The F-Score is a world-class accounting-based checklist for finding stocks with an improving financial health trend. A good F-Score suggests that the company has strong signs of quality.
While quality is important, no-one wants to overpay for a stock, so an appealing valuation is vital too. With a weaker economy, earnings forecasts are unclear right across the market. But there are some valuation measures that can help, and one of them is the Earnings Yield.
Earnings Yield compares a company's profit with its market valuation (worked out by dividing its operating profit by its enterprise value). It gives you a total value of the stock (including its cash and debt), which makes it easier to compare different stocks. As a percentage, the higher the Earnings Yield, the better value the share.
A rule of thumb for a reasonable Earnings Yield might be 5%, and the Earnings Yield for Petra Diamonds is currently 78.0%.
In summary, good quality and relatively cheap valuations are pointers to those stocks that are some of the most appealing to contrarian value investors. It's among these shares that genuine mis-pricing can be found. Once the market recognises that these quality firms are on sale, those prices often rebound.
Related Article in todays Daily Mail….
https://www.thisismoney.co.uk/money/investing/article-10934605/SMALL-CAP-IDEAS-Pent-demand-diamonds-boost-small-miners.html
Itsa: yep, there is a descending triangle pushing towards 85. I still do not think we will get that far. However, if we actually go all the way down to 80p, I will be ready to buy a serious extra amount ,-)
Splendor it looks like you are remortgaging your house !!
Hi Itsa, good luck ;-) If we get to revisit that level, I will even mortgage my house and invest for borrowed funds... But in three weeks - after the FY22 sales report - we might also be much higher than now.