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I was holding my breath this morning when the price was rising for it to just fizzle out. As we are half a year away from H1 results we really need some positive RNS’s to set this alight again.
BK has stated his frustrations re the sp on several occasions - he knows how to end them once and for all and the cash is sitting pretty, all dressed up with somewhere to go!
I agree new long term investors arriving , YU is a cash cow
The results are known but the capital Allocation policy is not. We can only speculate what it might contain based on the massive cash pile and the last Liberum note - "We speculate that a £20m
special could be paid. At 31 Dec 2023 the net cash plus collateral was £4.90
per share."
If this is announced tomorrow then I see a completely new group of investors arriving and who knows what they will do to the SP.
The results are more or less known. If there is going to be a 25% increase, it is more likely to be today.
Results are likely to show over fivefold profit increase over the previous year, I wouldn't be surprised if the share price jumps by 25% tomorrow alone.
Also worth keeping an eye on the gas spot price it’s flying at the moment up from 56p a therm to 72p a therm currently the average for 2023 was only 83p a therm so the pull back in the commodity price has not been as great a people may have anticipated especially with the trouble in the Middle East, Red Sea and Ukraine that can very easily strangle supplies
This is a YU and the SP does bizzare things but one thing for sure is the down side is very limited on a 2023 PE of around 7 TBC tomorrow and especially as half the MC is in cash
I have seen YU go up over 100% in a day very easily done if the buying pressure is there and this time we have no had the traders piling in prior so a bit different this time
Going to be an exciting couple of days. Would expect a good rise in share price today. Tomorrow is anyone's guess. Even if results & dividends are excellent, could be 20% up or 20% down. Share price will of course rocket before dividends paid, assuming good news.
Indeed SNN, point is cash is flowing in
Anyways - what isn't paid out this time around is added to the pot as possible payout next time in 6 months!
@Sparky - my guestimate of free cash of £40m as of year end is based on the approx £80m less £20m for ROC (a further £5m or so will be due on monies from Jan-Mar but that is not included in FY23 figures), £20m reserve.... leaving approx £40m free cash as of now. ( will be higher due to Jan- mar profit but that should not be taken into account for now in my opinion but assessed come September and interim / mid year figures.
also i think the sp is static because i read so much that yu has gone up xxx percent in the last 2 years and people think wow i have missed the boat
*******s we are priced after these results lower that sector rivals who's growth is pathetic in comparison our pe will be around 7 and mc is £220m with probably 50% of the mc in cash
wow
I just do not think people get how much money that YU are generating and how much they have available
So we do know they have just received back 52.5m plus the 31.5m that is £84m plus what’s been generated so far in 2024 and if March was effectively a free month, so the big question is actually how much do YU have in cash, yes ROC is due in AUG 24 so a good £20m needed for that and say £20m held back for investment in advertising , tech refresh etc etc etc
That still leaves possibly by year end 100m + as a wild guess
So what the hell are YU going to do with that cash , £20m special dividend plus 17p which is about 3m so still say 70m plus left
This all assumes the explosive growth of 2023 is muted which I highly doubt, yes spot price has fallen but actually the average price in 2023 as 83p a therm currently we are bouncing around at an average of 70p a therm not that large and it is volatile especially with the world on the edge in Europe and the Middle East and the stupid green agenda , volatility is here to stay and higher prices also here to stay.
So for me the big question is yes big dividends are great but remember YU only have about 1.5% market share and this year is going to be a fascinating to watch as to how much YU along with Shell can eat into the market share.
Shell are no fools and the deal is obviously aiming for several billion in turnover over the next 5 years and She’ll can obviously see the huge potential
Also I would not be shocked / surprised if shell actually took a stake a YU as they do like doing that as I can see this partnership being explosive
Time will tell by say Q4 2024 and how aggressively YU have taken market share and pushing on the 100,000 clients
YU always under sell and over deliver the only disappointment to date is smart meter roll out 10k was promised and 8k hit but this has more to with recruitment
Tuesday has the potential to be a big turning turning point , swimming in money, growing at a pace to rival a tech stock and now working with a Titan in the commodity hedging space
Next 2 days are going to drag waiting for the RNS to drop and hopefully most of what’s on peoples minds is put to bed
For 2024 I want to see the same statement a last year
“We have got off to a fantastic start in 2024 with our exceptional performance continuing.”
@bodrunchie - what do you think YU will do with the circa £40m+ free cash if they only distribute £4.5m as divis?
@SNN I agree that the market has currently priced in known news, but until YU declare their capital allocation policy there is only speculation. If it does contain a fixed divi policy (based on EPS) AND a distribution of free cash then for me that changes the game from where we are and so that is why I think it will be the catalyst for the next set of investors to come on board and with such a low free float an increase in MC and PE.
I am still erring on the side of caution.
Divis won't come anywhere near 10% yield. 1-2% is more likely. This is a progressive divi policy, it's not a divi paying stock like LGEN.
Once I have seen the meter points total for 2023 which should be around 53-54k according to Lib
I reckon they could already be at 60+ and no reason if that’s the case to be knocking on 75-85k by year end with turnover 750-850m
Again way above lib who have forecast 668m again way over brokers estimate
You guys here have been far more accurate than Liberium and SP Angel.
Markets are broken, you need to remember what the brokers where forecasting for 2023 at the start of the year, 350m turnover, 43p eps
Look what we have actually done
Proves the point the brokers have never got it right and wrong by a significant margin across the board
I'm apprehensive here. Tip sheets are out, volume and interest in the share is very low. Results will be in line with brokers etc etc. And the shares are priced as they are. I have no doubts the dividend will be significantly up on the expected 17p total for the year, but very nervous, as any disappointment (on the £20m) will drop the price. There are many shares with high yields (including Premier Miton at 10%), so a jump up in price is far from guaranteed. They usually say little about current trading at this point in the year, and currently brokers have falling margins and flattish profits forecast. The market in its wisdom has it all 'priced' in!
My own view is that eps in the region of 300p is on the cards for 2024 and 2024 dividends will exceed £1 per share. I know where I'd value this, but I am not the market!
* £20M - apologies.
Long and strong and just maybe all our patience is about to pay off bigtime as our valuation never mind dividends and special dividend and even possible share buy back justifies a price way above current levels.
If YU put out yet another bullish start to 2024 as well Jesus Christ the SP is just laughable
Very good post, IPC66.
I'm struggling with the notion that they would NOT pay the special dividend of 20p and have allowed the house broker to put the rumour out there? Just seems way too bizarre if it were so...no-one would trust the paper they were printed on in the future and that is surely not the intention. All will be revealed Tuesday. The wording of the TU says that considering a 'significant' increase to the dividend is 'part' of the CAP, so further endorsement there.
Nearly 80 odd jobs currently on the site nationwide suggests they have ample set aside for the growth of the business as well.
19th - 22nd is then pitching to II's, HNWI etc, so something for everyone it seems...
Good luck all faithful long-termers and best wishes.
So we are now 1 trading day away from YU's FY23 results and a possible special dividend.
Liberum (the house broker) in the update on 23/02 suggested a possible £20m special dividend alongside a 17p FY dividend as well as hopefully confirming the Capital Allocation policy. Hopefully this will confirm that genuine free cash will be distributed as special dividends and FY dividends will be paid at 10% of EPS.
If this is the case then YU is looking like a great buy for INCOME investors - both Private and institutions . Why do I think this? If we get a FY23 17p divi and then they distribute £20m (this equates to circa £1.20 per share as near as dammit) then the total dividend for FY23 will come in at £1.40 (inc. the 3p paid at interim).
This is a yield of 10.61%. (£1.40/£13.40 - Fridays closing price)
Add to this great looking growth prospects for FY24 and it will be an easy option for income investors to take a look at and then hopefully come on board.
With a small free float this could be the time for a proper rerate. At twice Fridays close of £26.40 Yu would be paying a 4.55% yield - which is still pretty good for an AIM listed utility with great growth prospects and the PE would still only be in the upper teens.
Anyway I am looking forward to Tuesday and am hopeful that a decent special dividend is paid this time.
DYOR and good luck to all LTH