Member Info for AndreyWalker

Guys, do you understand why Cavendish predicts a further decline in the profitability of OPG? For example, see table "Profitability analysis" EBIT margin:

2022A - 20.3%

2023A - 18.4%

2024A - 7.2%

2025E - 5.4%

What broke down there that made business efficiency low?

No worries.

Yes, I have a reasonable number of shares of OPG, which I have accumulated over the past couple of years.

Although I am a new poster on LSE, I am not quite new to investments and follow Benjamin Graham's philosophy.

The prospects for dividends or share buybacks are murky.

Have you noticed how the market is reacting sluggishly to this annual report?

I am reviewing the report for 23/24 and I cannot understand why additional loans were taken?

And what are these transactions with the debentures of parent companies?

Where do the additional expenses come from?

In the absence of any communications, this raises bad suspicions and doubts...

https://www.opgpower.com/umbraco/Surface/Annual%20Report%2023-24.pdf

To Hazbeen, Could you please clarify how much debt they have now?

My look at the latest report, item 5a, shows that they have closed 7.5k lakh debentures on 31/07/24, and the rest of 3.2k lakhs should be paid on 19/08/26, which is less quarterly profit of 4.8k lakhs. That means the debt is negligible.

Gupta's family invested a lot of their own money (~160mln NBV, if I remember correctly), so they will never sell the company for less than that. Moreover, they mentioned that a similar power station will cost around ~300mln. I consider it as the starting point for negotiation.

To Hazbeen: As far as I know, the idea of listing on the London Stock Exchange was a matter of prestige for the company's founder. Apparently, over time, the question of prestige faded into the background.

This is a market manipulation from Cavendish to create the illusion that there is liquidity and interest from participants

Just as a reminder: last year, in October, the company missed all deadlines for publishing results, so trading of shares was suspended for a month. Since the CFO responsible for this remained the same, history may repeat itself again.

I think your assumption that "the company has no regard for UK shareholders" is correct. The Gupta family is not going to deliver value to minority shareholders through dividends or share buybacks.

Until Arvind decides to pay at least some symbolic dividend, the company's shares will be staying at these ridiculous valuations. The market clearly doesn't believe the Gupta family.

With 6244 lakh of profit per 400mln shares of OPG gives 1.5 penny of GBP profit per share. P/E is about 7 which is Ok for such stock. The results are mediocre considering only 3% profitability from revenue

To Hazbeen: Some time ago, OPG paid "scrip dividends", something the opposite to share buyback , citing that "it brings the value to shareholders". Therefore, I am not sure that OPG will consider share buyback as a way to increase the shareholder's value.

The only reasonable explanation for the shares being worth so little is that the market doesn't trust the Gupta family to ever pay dividends and return value to minority shareholders.

Guys,

Do you think that Gupta's family, who has a controlling interest in the company, is ever going to pay dividends or buy back shares?

As far as I read Outlook, they are going to use cash for M&A instead - "the Company has significantly strengthened its balance sheet and liquidity position which provides OPG with the financial strength and latitude to pursue new growth opportunities in energy transition."