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25th July...
Cash position
After completion of the Marathon deal, at 1st July 2019, RockRose had
US$374mm of cash on its balance sheet of which US$283mm is unrestricted
(equivalent of £17/sh) and US$91mm was restricted. This was up from
US$121mm of total cash (US$53mm restricted) at end 2018, with the increase
over the first half of 2019 almost entirely down to the Marathon acquisition, given
the Marathon assets had US$350mm of cash and net working capital and deal
consideration was US$91mm. H1’19 free cash flow from the remainder of the
business was marginally negative, largely down to the capex on Arran.
https://gallery.mailchimp.com/110d0aa5f5d9bf9478796664e/files/5eb7f3bf-343d-4cee-be0b-1276c69380d2/RockRose_initiation_25th_July_2019_FINAL_RB.pdf?utm_source=H%26P+Master+Contact+List+%28Sements+and+Tags%29&utm_campaign=3d1fedb287-EMAIL_CAMPAIGN_2019_07_02_10_23_COPY_01&utm_medium=email&utm_term=0_dd4f91613c-3d1fedb287-98981107
When was the Hannam note dated out of interest? Those figures may have been based on a $140m MOUK acquisition and not the $94m depending on the date
Hannam & Partners unrestricted cash forecasts post capex for end 2019, 2020 and 2021 are $262m, $305m and $494m respectively. Much of 2019 capex of $120m already spent. 2020 capex also 120m.
With all the CAPEX needed for Arran, I will be happy with cash levels anything above £220m end of 2020.
2021 should then be a stonker.
I think some patience is due. Its only been 5 mins since the last deal and the share price has trebled this year to date. Just with the current asset base equity analysts are forecasting unrestricted cash will hit £70-80 in 3 years. Put whatever margin of error you want on that. And he is in 4-5 data rooms with $300m of cash to put to use, whatever you think about the mooted $1bn firepower. As I've said before he's turned £5m cash and equity value into c.£250m in 3.5 years and there is clear opportunity of generating further multiples, now on a base of £250m. Value will keep building and will be reflected in due course even if always at a discount.
May just get bored and take the company private, must have crossed his mind. Is there any advantage staying on the market when severely undervalued?
£30 a share everyone shake hands..