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positive RNS today.things going on nicely imo.
Directors filled their pockets with shares and now they are ready for multiple acquisitions, quick 10/15% going to be added to these and then hopefully a nice run in 2023.
Expecting to see fund managers following suit pretty soon unless they already backed them in the offer.
Dyor
encouraging.
If further proof was required that the management team do not consider real world shareholder value - please see following extracts from last annual report in relation to how the 125% director bonuses are calculated.
" The 2021 annual bonus targets were linked to both Underlying EBITDA and EPS growth which tracks
improvements in the profitability of the Group and returns to the shareholders."
" For 2022, the executive directors will continue to have the opportunity to earn a bonus of up to 125% of salary.
The bonus will be subject to stretching performance conditions based on Underlying EBIT and EPS."
So - makes it rather easy to pay out full bonus despite a 40% fall in shareholder 'value' in the last 12 months.
And you wonder why BlackRock were selling and we remain at such a low market value. SB
thanks for that silver blade. hadn't seen the earlier ones.agree look like purchases.
Italian - the 1.6m delayed trade was made shortly after a 400k trade - both were trumped by a 1.9m (£1m) trade around noon. Look like purchases. SB
delayed publication of 1.6m share trade(£912k)@57p at 9.46 this morning.
We do seem to pick them eh Vigneron. Different dynamic in each business - but both do feel like they are verging on being classified as typical AIM investments and as such come with a fair bit of risk. SRC's team seem to be more capable of executing its plan - but we are now in a position where we can no longer tap the capital markets and as such are now issuing highly dilutive share placings to continue the growth story. The senior management team are exceptionally well paid (look at the composition of the remuneration committee and the 125% annual bonus over base salary) and in total have 4.6m shares through purchases/placings v 25m shares under option via the 2021 LTIP. I will be very interested to see how the company's debt profile is being addressed and more specifically as you note what the company is doing to address shareholder returns. SB
I am beginning to despair of the abuse of inside information on the LSE. First EKF and now SRC.
Investor value destroyed in both cases. Seems private investors are not valued.
Question for the March investor call ..Investor value creation, is it on the company agenda ?
This is and has been a growth share with very able management.
Normally such buy and build strategies are PE backed and not played out in public markets like Sigmaroc is doing.
The financial performance and communication with shareholders is excellent.
Management have always put their own cash into fundraising and not relied on options.
The only thing wrong is the share price! A bit too high at 110p when Blackrock started selling.
This will be a very good investment
Price was 61p a few weeks ago before market got wind of fund raising….raised £30m and wiped £45m off market value. SB
Not so bad to raise at a premium. Don't see that often.
Agree SB, reading your previous post about needing to hit 8p EPS, its like they have worked out that the best way to realise those options (Around 5% dilution) is to dilute shareholders 9% and buy the earnings in order to get their free shares. I am not impressed that the placing is needed either way, and it hints that current business isnt great.
I bought a few on the pullback, sorry forward selling, so will flip those and call it a day here.
I agree that shareholders are an after thought here.
As previously noted, any corporate purchases are limited to the amount of money capable of being raised in cash or placings - although the disposal of non core businesses is also being utilised. This latest event highlights the operational focus from management which has been noted by others. What remains outstanding is any thought to investors - certainly in the short term - and a near 9% dilution to shares in circulation to purchase what appears to be a smattering of low value businesses, accepting they are being purchased on low multiples (wonder why). There is a real dichotomy developing here - stay in the hope management can somehow create some investor value; or accept they simply have no regard for such and are focused on their 2024 options which have a limited alignment to value creation. IMO - any fund raising should have been used to pay down some of our significant and expensive debt which would allow the establishment of some type of investor return from the resultant increase in free cash flow. SB
Never heard of a 2hr placing, but only £1M on offer to us general shareholders which is intriguing, I suspect they may have had to do it to allow the directors to enjoying getting some cheap shares prior to the placing.
My guess is buying competitors at multiples of less than 5( is that right ) makes very sound busines as multiples should be closer to 7/8 or beyond and if a rebound comes and costs are controlled then this seems like hugely positive news , I suspect the subscription was over subscribed as we had a placing / raise at higher levels previously.
60p anyone tomorrow , and anyone lucky enough to get the shares might just prove good value
Dyor
not much time allowed for retail.i got an email from from Hl at 17.28,but suspected it related to another share i was waiting news on.logged in at about 19.01 and read message to discover it was closing at 19.00.received email from hl at 19.04 to say closed.probably a good thing as i can now digest the news at leisure and see how market reacts tomorrow and over next few days.initial and unconsidered reaction is on balance good news. i expect there may be some concern over over expansion as the previous acquisitions probably haven't been fully embedded yet, but the amount being raised is relatively modest. positive that no discount and it may be seen as a very opportune time to acquire as im assuming the targets are at depressed levels (or at least some will be).will be looking at detail in due course.
Forward selling scumbags.
£30M FFS.
This is a very well managed company and the management team are delivering very good results.
It is labelled quite rightly as a growth share and it is growing. The share price will eventually catch up.
The share price was knocked down from over 100p to around 40p by persistent selling by an institutional shareholder.
Next year Rodney.
Liberum still upbeat and have maintained the 120p price target.
My view is they need 2023 to be a year of consolidation and delivery against that target.
Still not a peep out of Pershing sq about their stake.
You make a good point about investor return and at the moment it's abysmal. A question for the investor call.
On the face of it - good progress despite the macro trading environment. However - as I have noted previously - why are we invested here? The company is trading at less than 4 times EBITDA; has a market value less than the Nordalk acquisition alone (£400m) - not to mention the £150m additional acquisitions. The management team are focused on driving eps because this is the key to unlocking 25m share options based on the results to 31 Dec 2023 - which reach full vesting at an eps of 8p - so don't be surprised if that's achieved this year. I am all for management incentives - but as shareholders we are invested in an undervalued company with no actions from our BOD to address this issue. We are heavily in debt - and the recent interest rate rises are going to start to hurt this year, and big time into 2024 - the term loan repayment has a significant ramp up from £18m this year to £27m next year and a large chunk of that will be required to service the debt - almost £12m per annum based on my calcs at current rates - hence the crucial refence to leverage being below 2.0x otherwise our interest payments increase. So any acquisitions would need to be funded in cash or a placing - and bear in mind last placing was 85p - so I think any substantial purchases unlikely. I liked the business model - but an wondering exactly what returns I expect to see an investor in the business - £100m EBITDA and no mention of buybacks, dividends - or shareholder value considerations. SB
Good time to raise money and go after another big acquisition in my opinion , perhaps the biggest deal is yet to come before someone takes them out.
I wonder what fair value for the shares is today because 60p seems very good value , and they were trading circa 120p at their previous peak.
yes, encouraging update.good to see us holding up well against the unfavourable macro backdrop.
Good progress is being made.
What's not to like about the trading update, they are quietly delivering despite the Macro economic turbulence.
If and when the turbulence abates you can see this company taking advantage.
I am a big fan.