Member Info for Agricore

Jimb2, This presentation from Hastings sets out the logic of the A$150m investment by Andrew Forrest (via Wyloo)
https://www.investi.com.au/api/announcements/has/e2479091-262.pdf
There's an interesting synergy between Hastings and Neo - and for extension for KDNC holders with a A$9m shares interest in Hastings.

https://www.pv-magazine.com/2022/08/20/the-weekend-read-dawn-of-virtual-transmission/

The idea being that batteries could theoretically “daisy chain” long distance transmission lines to improve capacity and lessen overheating.

A 5 year investor today owns assets over 2x more valuable (even after accounting for inflation). How is that appalling?
NAV per share of 370p (as at 31 March 2017)
NAV per share of 937p (as at 31 March 2022)

What about since March 2022 -> August 2022?
You can deduct off 19p/share (-£33m) the 31/3/22 based on drops in GROW's listed portfolio (i.e. Cazoo/Uipath/Trustpilot)
Assuming cash realisations/new investments are cash neutral, then £78m cash nets the current £565m market price off to £487m and taking the £33m reduction, above, and topco cash that nets the £1.8bn NAV down to £1.69bn. So you are actually getting a 71.2% discount to NAV (£487m/£1690m) when you consider each £3.65 share contains about £0.51 of cash, and about £0.20/share of listed companies.

So how real is that 71% discount to NAV? The true discount might actually be higher still. GROW state "For investments calibrated to the price of recent investment, the range of discounts used in our valuations were 15%-89% and a weighted average discount of 25%". Also of interest "over 80% of investments are fully funded to their exit or have over 24 months runway".... so I can't see where any skeletons are hiding.... I've gone through their reports. Where do you think they lie?

Or put another way you are in effect paying £2.94 for about £11.04 worth of companies which might be worth £13.25 (removing the 25% discounts), and in any case are growing and managed to grow 37% last year and 51% the year before. So potentially £13.25 could grow to £20.00... for the price of £2.94.

No wonder Berenburg Bank in their July 2022 stress test concluded that GROW was "too cheap". So I don't agree that "value destroyed by lack of information". GROW invests into areas that solve problems in Enterprise Technology, Agritech, AI/ML and Climate Technology. In a world of shortages its portfolio companies help solve problems. These portfolio companies will prosper and are prospering, and by extension GROW shareholders will prosper too.

GLA

>>> Very expensive then considering Centamin produces 400k P A with a 100m profit, so Hochschild paid 123m for a 800k reserve, if the project costs more than 100m to build is not the whole venture just pointless, anyone agree with this math.

....No!
CEY AISC $1446/oz (2022 interim)
Mara Rosa forecast AISC $850/oz. (2022 interim) with a post tax IRR of 18%-20% assuming $1600 gold.
Amarillo had dropped by 40% in the months prior to the offer, so while HOC paid 66% premium, they only paid what Amarillo's market price was from 6 months prior.

Here's a headwind with a difference. The blast of reaction engines. SUPP holds 3.3% of NAV in this. Worth £12.5m. Backed by BAE, Rolls, and IPO.
So a float would drive a further 2.5p-5.5p uplift in NAV by my reckoning.
https://news.sky.com/story/rolls-royce-backed-reaction-engines-plots-flight-path-to-1bn-public-listing-12680679

Chrysalis forecast next 12 months 20p EPS +39% to forecasts 3 months ago:
https://www.investorschronicle.co.uk/tips-ideas/2002/01/02/latest-update-companies-smashing-broker-forecasts/

12 months this was at a 20% premium to NAV and now is at a 50% discount according to IC:
https://markets.investorschronicle.co.uk/data/investment-trust/tearsheet/performance?s=CHRY:LSE

Take a look at HOC's 10 year chart. You buy it cheap (or cheaper)..... but one day it isn't. Look at 2016 and 2020. Once it has a supportive price environment this share motors. While you wait, you have the reasonable dividend, continuing diversification into friendlier American regimes (Brazil/Canada), LOM extensions, and a highly competitive AISC at its main mine.

If you believe that Silver will one day have its day in the sun then it also has the attraction of being a big silver producer on the FTSE. This time next year Rodney, parabolic I tell you.....

Jigger: This is my understanding:

1a. Vietnam 3MW Solar - producing initial $0.06m EBITDA in Q4 ’22 (and $0.26m EBITDA p.a. thereafter)
1b. Wider 150MW Solar opportunity in Vietnam and install plan is 3MW each quarter so approximately 12MW new capacity/year. Each 3MW is $1.9m capital cost amortised over 30 years and $0.32m revenue. Rates and revenue are locked on a 25 year PPA agreement.
2023 EBITDA could be $0.78m. 2024 EBITDA $1.82m. 2025 EBITDA $2.86m

2. 15% ownership in Duyung, one of Indonesia’s largest discovered gas fields, pending Gas Sales Agreement in H2 ’22 & Final Investment Decision in H1 ’23 +

3. Sale of Italian assets comprising:
- €0.3m cash down payment for option "right to buy"
- €5.7m cash sale for Italian assets
- up to €1.5 million paid over 3yrs after disposal
- c.€0.5m EBITDA per month until disposal (assumed 5 months)
= Totals €10m value
(However there's hidden value I've spotted in that the Rehabilitation Provisions for Italy would also transfer to the new owners. There was $7.59m of provisions in the 2021 accounts relating Italy and the net assets were actually minus $0.66m).

4. Phillipines - Coro’s 80%-owned - two development stage renewables projects – a 100MW solar project (Q1 2023) and a 100MW wind project (Q3 2023) from ready-to-build status (i.e. ready to begin building). Capital for solar is $100m and 6 months build. 20% IRR. Wind capital is $173m. 20% IRR.
Solar 2024 (onwards) EBITDA $16.66m (because this will be 75%+ debt funded maybe $7.2m PBT to Coro)
Wind 2025 (onwards) EBITDA $28.84m (because this will be 75%+ debt funded maybe $12.8m PBT to Coro)

5. No value ascribed to Ion Ventures (21% owned)

6. Last reported cash position was $2.8m (~£2.3m) on 12th April 2022 (per the 2021 accounts)
But regardless of the cash position, the way this needs to be valued is on a Price Earnings basis in my view.
Even assuming Duyung is worth zero, and assuming the Italian assets are sold and the proceeds ploughed into the Vietnam and Phillipine projects, also that the above projects are off the ground complete by 2025 then assuming a generous admin/corporate overhead of $5m/year then I arrive at an annualised profit PBT of $17.86 or £15.27m.
Assuming a PE of 10 (£152.7m) but risking by 50% I arrive at a fair value of £76.3m or a 12 bagger from here compared to the current Market Cap of £6.3 million.
Align feel it is "only" worth half again at 1.5p/share (merely a 5 bagger) although I'm not sure how they arrive at their valuation. (The Vietnam profitability they quote as being worth £3m per annum, whereas Coro themselves quote £0.32m in their Q3 2022 presentation)

It could be a 24 bagger if you remove my risking. Or more still, if Duyung were a success. (I don't know enough of the specifics of Duyung to have a view... yet), or what it's disposal value could be. Unlikely to be zero though.

Despite initially feeling disappointed by the Italian proposed sale doing the maths, makes me thi

My further error. Shore's FY2022 forecast profit should be in dollars.
Shore's forecast for H1 is $79m revenue, $9m EBITDA and $6.3m PBT.
ACTUAL:
Revenue: $61m (inc. $11m FX effect so a $7m shortfall due to covid testing dropping away)
EBITDA: $3.7m (inc. $1m FX effect)
PBT: $0.7m

Shore's H2 forecast:
Revenue forecast: $85.9m
EBITDA: $13.4m
PBT: $11m
There's an order book and back log that supports this and new agreements reached during H1 that wouldn't show value.
I hadn't anticipated the FX effect although that's a translation effect rather than impacting the business as such. Looking at it negatively it's more jam tomorrow and little jam today however it is also true that BVC have navigated a difficult period and have technologies which are disruptive and that are high margin, largely unaffected by inflation and that meet growing needs of health and security (i.e. defensive markets). And is cash generative.

I'm glad I topped up and look forward to H2 however the H1 results also explain the share price drops and how we arrive to a 30p/share current point. Using the FY2024 forecast profit I can see how this can revert to at least 60p/share. Much more if Shore's forecasts prove too conservative.
GLA

In simple terms why would we sell an asset generating 5m per annum profit, for up to 7.5m?

Makes no sense.

At today's prices:
1. Sandfire AUD$4.85 x 7.36m shares = £20.87m
2. Cobre AUD$0.52 x 44.57m shares = £13.55m
3. Other holdings = £6m approx*
= £40.42m ( vs UK MTR market cap of £30.5m!)
Interesting too that the bid offer of Ozzie MTR is $0.39 - $0.43 so even at the bid price that's equivalent to 22.8p
https://www2.asx.com.au/markets/company/mtr

Couple of things to add:
1. I don't see that the deferred income through NSRs (royalties) are being factored in anywhere to the monthly NAV. The ASX's monthly NAV is simply a 1 liner so doesn't substantiate anything. In the 2021 accounts the Sandfire A4/T3 is valued at £10.5m (6p a share). There has been drilling since 31/12/21 so this could revise higher. Moreover any future drilling in scope will also come under the NSR - it's uncapped.
2. There is a new NSR for Cobre not included in the above numbers.
3. * There are other holdings worth £6m (based on 31/12/21 valuation plus holdings listed as purchased post period in the 31/12/21 accounts but excluding Cobre/Kalahari/Sandfire). What I've realised this evening is that the majority of these are warrant holdings. What this means is you hold the right to buy a share. So if it tanks, so what, you don't own it. If it "does a Cobre" then you can buy it at a "pre-agreed" price. So the £6m imputed value doesn't really reflect the potential value. I guess one way to describe it is if half of the warrant holdings double and the other half go bust you've not broken even you've made a very tidy sum.

So I'm getting to 30p/share NAV where there's at least 3 reasons why it shouldn't "just" be 30p.

MTR's H1 report should be out by 31st August. It will be a very interesting read.

GLA

Bolt is TMT's 2nd biggest holding.
Since 2020 Bolt has doubled the cities served, tripled customers to 100m

"Now, our size and the range of products we offer put us in a unique position to revolutionise how people move around the cities. By providing an alternative to private cars, we can help create cities that are greener, safer and more pleasant to live in. It’s important to stay grounded, though — rising inflation and interest rates mean we have to be disciplined when assessing how and in what markets we invest. We’ll prioritise growth efforts in our existing markets instead of expanding our services into new countries. Our culture of frugality helped us come out of the pandemic in a strong position, but the challenges will not stop, and the team is focused on preparing for and responding to them.”

https://blog.bolt.eu/en/bolt-announces-ongoing-post-pandemic-growth-to-mark-ninth-anniversary/

My error. I included full year FY2022 forecast profit.
Shore's forecast for H1 is £79m revenue, £9m EBITDA and £6.3m PBT.

I've just added to my holding here.
It feels like an eternity since Zvi did an interview but of course the last update was only last month.
Last year's interim was on the 23rd August so we will know the truth of BATM's progress.
Shore's forecast for H1 is £79m revenue, £18.1m EBITDA and £12.7m PBT.
My sense is that the Network division will be ahead of forecast and the bio-medical below (due to declining covid test sales), but overall above. But then again why appoint a new head of bio-medical in July if the division is doing badly?

It's worth pointing out that the company behind "Maersk - Methanol" - called WasteFuel is also trading on a huge discount. It's 31/12/21 NAV was $127m and IX hold 36.17% worth $46m. The Mcap of IX is £20m or 38% below NAV.... and that's not including the fact that IX also hold 5 other holdings worth a further $14m! I'm starting to see a rerating of green shares especially on the back of the Inflation Reduction Act, plus Australia's new PM has increased its target to 43% below 2005 levels, and even China which has suffered a collosal heat wave and flooding, is talking about further environmental measures.

Good news will ratchet QFI sharply upwards, so I'd repeat the watchword of patience.

It's also interesting to note the proliferation of heavy mineral sands isn't limited to Canada and the US but extends to central Europe and the north sea. Could QFI help solve the European energy crisis?
This is worth a read.
https://onlinelibrary.wiley.com/doi/pdf/10.1111/1755-6724.13778#:~:text=According%20to%20the%20assessment%20results,tonnes%20and%2064.13%20billion%20tonnes

Simply because the stock market in the short term is a voting machine.

And CHRY is unpopular because of it's high profile losses e.g. Klarna fundraise at a much lower revaluation and various negative articles about greed and bonuses - just read other posts here - and also generally that growth shares have been hammered hard due to perceptions around discount cash flow.

Long term the stock market is a weighing machine and many of CHRY holdings are profitable, cash flow generative, or increasingly becoming so. CHRY hold a good chunk of cash which could be used to support holdings where needed too.

I can't speak for fat cats or their killings. I think most cats have hibernated into cash, and therefore are overlooking opportunities like this IT. What you need to decide, is how real is the discount and whether it can grow, and provide returns to investors then invest accordingly.

I calculate there's currently a value of £12.8m for Cobre.

That's AUD61c per share and 165m shares = AUD$100m (or £58.3m at 1.73 FX rate). MTR holds 22% of Core so holds £12.8m.

Each further 10% rise in Cobre from here would be £1.3m or 4.3% of MTR's £30m NAV worth about 1.3p NAV/MTR share

Obviously that excludes the 2% NSR royalty or loan to Kalahari which aren't affected by share price changes.

Rofert, you're in luck. Lord Rockley is a highly experienced ex-KPMG audit partner in PE and oversees the CHRY 30th June valuation. He is joined by 3 others all with solid credentials. The point about valuations has been squarely addressed in my view.

163.48p is a pleasing result particularly when you consider 30/06 was something of a low point and since then many peer valuations have reverted e.g. Paypal and Square. Of particular note was Starling's ROTE of over 17%. Wow. RevB's precipitous drop is also post period.

So a discount of 47.5% to NAV (163.48p vs 85.7p) is substantial.

However if you remove the (18th Aug) of 20.5% of market cap of cash and listed equities (17.6p a share or £105m) that leaves £867m worth of unlisted investments as at 30/6/22. So you're in effect paying 68.1p for 145.88p of unlisted - so a whopping 53.3% discount.

Or put another way if you consider the holdings in Starling, Klarna and We Fox as "solid" then that's 37% alone and you are getting holdings in:
Smart Pension, The Brandtech Group, Graphcore, Featurespace, Deep Instinct, Wise, InfoSum, Tactus, Sorted, Secret Escapes, THG, Revolution Beauty all for free.
......And that's before we start looking at upwards revaluations post 30th June. As CHRY allude:
"Post period end, equity markets have performed much better with the GS Non-Profitable Tech Index +13% and NASDAQ +15%. This has led to a material rerating in many relevant listed peers to our portfolio companies, including Affirm (+72%), Trade Desk (+57%), Lemonade (+35%), PayPal (+39%), Bloc (+21%), Amazon (+30%), Adyen (+16%) and Crowdstrike (+13%)."

Freedom, leaving aside the H1 numbers for a moment and going with the forecast 2022 guidance:

2022 outlook (I'm using gold equivalent throughout for simplicity)
§ On track to deliver overall 2022 production target of 360,000-375,000 gold equivalent ounces or 26.0-27.0 million silver equivalent ounces
§ 2022 AISC on track to meet guidance of $1,330 - $1,370 per gold equivalent ounce or $18.5-$19.0 per silver equivalent ounce

Taking a "worst case" of $1700 gold price, $1370 top end AISC, lower end ounces mined 360000, that gets me to a $118.8m PBT for 2022. (Before exceptions) Or a 3.7 Price Earnings at today's 72p (£372.56m market cap)

Taking a "best case" of $1900 gold price, $1330 AISC, 375000 ounces (equivalent) that gets me to $213.75m PBT so a PE of just 2.1.

> Back to the real world there are exceptions notably the Aclara ($10m) loss. (Could that reverse in H2? REE are coming back into fashion).
> There is exploration cost that "should" be capitalised. Or is it? Appears to be going straight to the P&L? Makes future AISC lower if it going straight to P&L but from our point of view it makes profits appear smaller (than they truly are)
https://www.accaglobal.com/uk/en/student/exam-support-resources/dipifr-study-resources/technical-articles/ifrs6.html
> Production actually ahead of 2022 guidance (Double 198.74KoZ ev. and in my optimistic scenario profit rises to $225m and PE falls below 2)
> Ignacio very positive about Pallancata drilling/extensions ("no I do not think we should put it in C&M" he said)
> Quite a bit of closure, care and maintenance, broken belts and retirement costs = $25m cost.
> Mara Rosa coming on stream in 18 months and will make a big difference.
> Ignacio presented well I felt.

Some reasons to feel optimistic here. Why does the market not rate HOC?

Hi SD/Trek
Likewise I wish you well too. For me this was very much about an income stock where there was limited downside due to hedging. The nagging discomfort which culminated in selling was the two questions
1/ What if gas prices don't go down? (People are just assuming it will)
2/ Why was the hedging loss greater than operational profit? (Why wasn't it a component of reduced profit?)
For the hedging loss to exceed profit there must be 1 of 2 things happening. Either a leveraged bet or that a greater future duration is being bet this year compared to last (i.e. DEC are better further ahead than before). I'm not sure which or perhaps there's a different reason I am not thinking of. Anyway what troubled me was DEC's unwillingness to explain the hedging. It just seems the most obvious question I'd be expecting to be asked if these were my results. I'm an accountant but I can't fathom the answer from their last accounts. Anyway, I recognise DEC continues to do well and is in a sweet spot.
GLA