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The market likes today’s RNS currently Up 6.9% at 71p on volume of 114000.
@bangrak, if you read the whole RNS it explains how the JV is being financed. SLP provides the upfront payment but half of that is a loan to the other party, who will be paying 11.75% interest
I'm struggling to understand if that deal was inked way before prices collapsed, Starting in 2025 paying $32m for a 10-year but 17yr max term if extended/negotiated for an extra 6500 0z plus some chrome. Payback in 3 years it says, using long-term consensus pricing (broker says $5k RH so what is the consensus used why hide this). Remember there is very little profit on the net basket as it stands, so why pay $32m for an extra 6500oz, what's the other party putting in......"expertise"
Thanks for posting RNS, much appreciated
Great stuff! This JV has a very high ROCE even at these depressed metal prices. If they recover we'd be printing money again!
LSE RNS feed not working yet today, this released this morning:
https://www.londonstockexchange.com/news-article/SLP/chrome-ore-pgm-treatment-joint-venture-agreement/16075677
An interesting read thank you.
Check Glencore and what they have done today
I agree the dividend is very important but perhaps it would be acceptable not to match last years payout when we consider the present yield with the share price so low. In my humble opinion at sometime in the future it will be understood that its nonsense to consider that it is beneficial to have everybody driving electric cars. It is not green because of mining all the elements needed for the batteries and the disposal of the batteries is problematic. We are unlikely to have sufficient generating capacity to charge a vast number of electric cars at anytime in the near future. I have been advised that we don't have the capacity to supply sufficient electricity to all the required charging points. which we are not going to have anyway. I mention all of this as I expect that Sylvania Platinum to have a bright future by supplying items needed in ICE vehicles for many years to come.
The key for me is the divi. This is now only a divi play as there is no longer a viable reason to hold this stock. I am now underwater on SLP unbelievable as that was a few years back. And it is not looking too rosy in the foreseeable. So it follows the only real reason to still hold is the divi. If that goes, then I see this dropping further back as people exit in droves if they have not already done so. For me I will not sell. I do not need to. This will come back but it is a bottom drawer stock for me now. One to simply forget about for now.
The company announced on May 2nd that they had ten million dollars available to buy back shares for cancellation and the buy backs must be completed by September 7th or earlier if the ten million dollars had been spent. I agree that they are trying to purchase the shares for cancellation at as lower price as possible. What surprises me is that it would appear that they don't consider the current share price to be low enough to buy back shares so it appears to me that they don't agree with the share price that several financial organisations have suggested as fair value.
Presumably the company has a limited amount of money to use for repurchases. On that basis, if they repurchase too early in a falling market, their activity will not arrest the fall and they will be able to repurchase fewer shares than they could otherwise have done if they waited. The failure to repurchase now may not therefore indicate a view that the current sub 70p is too high, or appropriate. It may just be a pragmatic approach and involve keeping whatever powder they have dry. Repurchasing when the market turns may give them more bang for their buck.
I find it concerning that the company appears not to consider it an attractive proposition to buy back shares for cancellation at below seventy pence a share. Several financial organisations rate the shares as worth in the region of 110p-120p it appears to me that the company and its broker don't agree with that valuation because surely if they did they would be buying back the shares at the current depressed level.
$125 Million NET CASH
Platinum and PGM production rising
M&A also possible
Thank Neil, I appreciate the detailed response.
Do not believe the actual dividend has been declared, however, the policy has and I cannot see why they would change that as its based on the percentage of free cash flow, so just the actual amount is currently unknown.
Dividend Policy
The Board has reviewed the Company's Dividend Policy and effective 1 July 2022, the New Dividend Policy will be able to pay out a minimum of 40% of adjusted free cash flow for the financial year. Where annual dividends are declared, these will be paid in two tranches with an interim dividend equating to one third of the forecast full dividend and the final dividend equating to the remaining unpaid balance of the minimum of 40% of actual adjusted free cash flow. The payment of dividends remains at the discretion of the Board.
As a consequence of the new Dividend Policy, the Board has declared its first interim dividend of 3p per Ordinary Share, payable on 6 April 2023. Payment of the interim dividend will be made to shareholders on the register at the close of business on 3 March 2023 and the ex-dividend date is 2 March 2023.
EDISON re: Sylvania Platinum
Lower rhodium prices overshadow strong production
Sylvania Platinum saw a significant quarter-on-quarter reduction in EBITDA in Q423 due to lower rhodium prices. We have lowered our rhodium and palladium price forecasts for the next two years, because of predicted demand in China and some de-stocking from OEMs, and have also reduced our long-term assumptions to allow for the current uncertainty. Our FY23e EPS has been adjusted downwards to 18.3c, with FY24e and FY25e EPS reduced by 40% to 9.0c and 11.2c, respectively. Our revised valuation is now 118.2p per share, 32% down from our previous valuation of 173.7p per share.
Near-term forecasts cut :
Due to the lower rhodium spot price and uncertain supply/demand situation, we have revised our rhodium price assumptions for the next two years: down 44.6% in FY24 to US$6,000/oz and down 47.1% in FY25 to US$7,500/oz. We have also reduced our FY24 price forecasts for palladium by 12.9% from US$1,503/oz to US$1,309/oz. As a result, we have lowered our EPS estimates from 14.8c to 9.0c for FY24 and from 19.3c to 11.2c for FY25.
Out of interest, at what point can the dividend be changed? Can we expect an RNS at any time notifying that the dividend payment is changing or does it have to go through the AGM?
Stoodio.
I completely concurr with your post. I too sold out between 120 and 103, having been here since August 2018. I made a substancial amount, but cannot see a clearly defined route going forward. I also do not think that the dividend can be maintained, in fact , that was never in my original investment case. I think that The BoD are solid, but their ability to control overheads is becoming increasingly challenged.
GLA. DH.
Further to my message yesterday, I feel it's fair game to let ya'll know I no longer hold SLP :)
It's been a while since I sold. Sold back on October 28th last year for circa 99p (over a few sells as I was holding a fair bit of the float haha). Why did I sell?
Well I had one helluva ride up from 6.4p so no complaints. Lot's of hindsight (shoulda sold at £1.42) but held on for all the wrong reasons. Emotional attachment, greed etc etc. Typical dead brain investing 101 f**k ups. But hey like I said, no complaints for a 1,500% ish return over 8-10 years.
The final trigger to sell came via the results update of September last year. I didn't like what I saw / read and felt the time had come. (Well I did, but it lacked clarity AGAIN about the future). Held on for a small while thereafter but got the sense this was going to pull back substantially, and low and behold it ultimately did. I didn't even wait for ex divi (literally only a week away ish at the time) for one last pay day :)
Ultimately a huge relief to sell. Like I said I had a great ride, but the time was up. Saw too many other opportunities at the time that I wanted a slice of but had so much tied up here it was time.
So with that I wish you all, ALL the very best with your investments and trades here. I'm still very fond of this company, and for sure this huge pullback has made me think hard about taking a new position :) But not with current PGMs prices where they are.
I still think the company is undervalued. I still believe in the future of the company, but over the past few years, while I love the management here, I just feel the company's growth has stalled.
I'm unclear as to where management ultimately want to take this company, (taken private is how I once saw it, merger? acquisitions? full sale to samancor?) and that concerns me slightly. BUT, do do still think the future is bright, just not as bright as I once saw it.
I'm still around ladies, happy to jump on the board every now and then see what's cooking :)
Wish you all the best :)
I have to admit, I never thought we'd be at these lows again. Or did I...
:)
Just goes to show how tied up to Rh this SP really is, and pretty much since May / June last year it's just nose dived from what, the $18,000's to where it site now at $4,000. Interesting times...
210,000 sell after hours yesterday,
The revised RNS wasn't released until the same time - just after 4pm. It only appeared on this LSE site (under 'Live RNS') at that time.
Thanks for the posts guys - particularly bangrak. It puts into perspective the current valuation. I'm OK with my holding at current prices but clearly upwards potential is limited by P6E prices particularly rhodium.
On another note I've always used Investegate for RNS research and alerts but it's recently gone kaputt. The new guys are struggling to resurrect any sort of decent service. The RNS alert for SLP reached at 4pm yesterday. Not ideal.
Any recommendations for an alternative?
Bangrak
Where have you seen the reduced price target of 110p from Liberum Capital please may I ask you?