Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Well, update now out and it's hard to see what caused the delay
Decent growth from AA revenue
Decent growth from FF+, but YoY margins will drop due to H&B ( the latter is me talking, that's not in the update )
Increased R&D spend
Similar loss to last year
Funds needed ( by end of year ? )
But, most importantly, they've changed the wording about the effect of Blue Hat from pipeline to orders, so, IF that happens, and DSM's margin isn't affected, then that should see us moving into profit.
BB
Tootight
That's a fair point, but if they expect to do something which is totally under their control* in June, don't do it, and then rinse and repeat in July, then they risk looking like rank amateurs. Hopefully we'll get a trading update of some kind tomorrow to show, if nothing else, that there's some semblance of order in the company.
BB
*plainly they might not be in control of what they might WANT to report on, but they're totally in control of issuing a trading update covering revenue from the AA and FF+, so there really are no excuses.
Taverham
The overall figure of 5 billion USD is being widely quoted in the news, for example https://www.bbc.co.uk/news/business-49026285
I suspect the 290 million GBP is a bit of educated guesswork based on what the company have said it expects the costs associated with the Max to be
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Jatw
Unless I've missed a holdings RNS, they're still sitting above 50% ?
By my reckoning, the underwriter has just over a week left on their option to take on the remainder of their shares, so, two or three days after that option expires, we should know if they've managed to reduce below 50%. If they end up still being above 50%, then presumably somebody, somewhere, will be due a bit of a kicking for misjudging the situation.
BB
For my sins, I've been a holder of Oracle to greater or lesser extents for a few years now, and am sitting on a fairly uncomfortable loss. I'm still holding what's left as a reminder to myself that projects such as these almost always take much longer than planned and therefore consume cash just to stay alive, so it's really not desperately wise to get involved too early and stick it out.
Anyway, general whinge over, and the reason I post this is in case any holders didn't spot that, squirreled away in yesterday's ( 16th July 2019 ) RNS titled "Result of AGM" available at https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ORCP/14151697.html and other web sites was the nugget saying
"At the AGM, Naheed Memon, CEO of Oracle, gave a short presentation to shareholders, which included a statement that the Company expects Financial Close to occur in the second half of 2020, which updates the previous expectation of Q4 2019."
Now, far be it for me to suggest that slipping that info into an RNS which the title suggests is rather dull and might be overlooked by many is a bit underhand, but heh, nobody died.
Mind you, if I was a member of the board which is now saying financial close is slipping by nigh on a year, then I'd be more than a tad embarrased. Still, financial close has been slipping for a couple of years, so it's no great surprise.
*sigh - **** happens
BB
I'd say the market reaction is pretty much as expected.
1. sp rises before update
2. Perfectly good update issued, but % profit increase of 10% is much the same as the same increase as the prev year, and, again like the prev year ( and like it has every year since I've been a holder ), the fin year will be weighted to H2
3. Some people decide to take profits. If enough people do that, then the chartists will follow that trend and the sp will likely drift down a bit.
Overall though, depending on which figures you want to run with, I'd guess we'll be looking at eps for the full year ( as opposed to H1 ) of something like 9 to 9.5p ( 10 to 15% up ), with a total divi of 2.3 to 2.4p, so, at currently 88p, I reckon we're on the low side of a fair value of something like 80 to 110p ?
BB
You can call me a miserable old bar steward if you like, but Farmgal, Alf and anyone else debating different methods of promoting FF+ is purely academic.
If our share of the profits from DSM via the AA don't end up justifying our market cap as it stands, and hopefully a market cap of a few multiples beyond that, then the chances of FF+ justifying that market cap ( 6 million pounds as I type ) are far, far smaller, and, intellectually interesting though it might be, everything else is hot air.
Fruitflow is, from an investment perspective, high risk, but the risk / reward ratio is acceptable, but, even at ( say ) a market cap of even 3 million, FF+ is nigh on uninvestable as a standalone product.
IMO etc etc
BB
Tis a fair question that Alf.
Based on numbers downloaded from https://www.themission.co.uk/investors/share-price-information, I'd say a 30 day rolling average shows that volume's up something like three fold from January this year.
That's a big jump, but it's still a small % of the company being trading, so I'd guess some people who bought in the range of ( say ) 20 to 50p are reducing their holdings and a fair % of those shares are being picked up by chartists.
I'm still happy to hold at these levels, but if it got up to something close to 120p this calendar year without an indication that medium term growth in underlying eps was going to average out at 15%+ , then I'd almost certainly be looking at reducing a bit.
BB
Ah well, it seemed to me that Mr Market has overreacted a bit today. It must be two or three years ago when I reduced my holding here, but I took the opportunity to reverse that a bit this afternoon and bought a few with the price in the 360's.
Hopefully there'll be plenty of appetite for HHHL's shares, or I'm going to look a bit foolish !
BB
Sally
No
HHHL are just reducing their holding, but, rather than just selling via the open market, they're selling in a manner similar to a placing. The sp has dropped to something close to the price HHHL are offering their shares, because, at the moment, no large holder would buy above that price
BB
That converts to roughly £38 a share, so the current price ( you can buy at a whisker over £40 ) seems about right
BB
Ali
The AGM's on the 17th June in London.
See https://www.themission.co.uk/investors/shareholder-centre/agm-information for details
BB
Alf
fwiw - I think the fundamentals changed round about last Sept when profit growth changed from what was previously round about 10% to something about 20%. January's trading update, and then the results themselves confirmed this.
A company consistently growing profits at 20% is, all other things being equal, worth about twice one which is consistently growing profits at ~10%.
As for where to reinvest - who knows. Most of my the rest of my portfolio ( a mix blue chips, mid caps and small caps ) is pretty much treading water, so it's nice to have one or two investments which are bucking the trend a bit. But, there will almost certainly come a time when Mission starts to look overvalued, so, at that point, chances are, I'll be selling. Hopefully that'll be a few years off yet like.
BB
David
With an expected listing of Q3, I suspect the biotech week will be coming a bit too early for much, if any, coverage of our listing
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Alf
I don't think there's anything out of the ordinary happening here. The sp is likely moving up on a combination of good fundamentals ( historic p/e of < 10 ) and forecast p/e of less than that ( take your pick on which eps you want to run with, adjusted or IFRS, they're not massively different ), decent growth prospects ( maybe 10 to 15% for the current FY ? ) and some solid momentum on the chart front, so you'll have two types of buyers in the market at the moment.
IF Mission was a bigger % of my meagre wad than it is ( I think it's about 5% or so ), then, purely for the sake of balancing my portfolio, I'd probably be taking some profits and thinking about where to reinvest, but it's nowhere near the 10% or so of my p/f that I'd be feeling quite nervous about, so I'm currently happy to let profits run.
Mind you, if I'd been in as long as you have, and was feeling overweight in Mission, then I'd probably be doing something different
BB
Sphinx
The word substantial gets used quite a lot. Back in the last interims one of the places it was used was
"The Company had a substantial batch of Fruitflow®+ Omega-3 capsules manufactured in July 2018", yet a closer look at the inventories and cost of goods shows that YoY, inventories rose from 22 to 68k, and cost of goods rose from 10k to 26k, so that "substantial" batch probably cost in the region of 60k.
If you're happen to run with a substantial multiple meaning a multiplier of 20 to 40 times, then I'd suggest you dig deep any buy lots of shares. Personally I suspect that substantial multiplier will result in something quite a bit less than 20 to 40 times, still very good if it happens, but, if I'm right, not quite as game changing as you might be hoping for.
Having said that, if lots of optimism means the sp keeps rising, then I'm happy with that, and will probably sell at least a % of my holding into that rise and accept the risk that the sp might keep on motoring upwards
BB
Just checked my notes, I was close, but not 100% correct.
The agreement runs till 2022, so could be a bit less than 12 years.
My notes tell me that info was in the Interim report for the six month ending in Sept 2010, which should still be available from provexis.org ( I havn't checked though )
Anyway, come on Citeh ffs ...
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Pumpky
The AA was put in place for a 12 year period, so is due to run out some time in 2022 ( probably June if it's exactly 12 years ). I don't have the link to hand, but it was in an RNS once ( only once though if memory serves me right )
BB
Yea, it's all looking good here Alf.
I think I had a twelve month target of 75p+ here from about six months ago, so it's nice to see that the market's agreeing with me about something for once. ! I've only been a holder for something like 3 years, so nowhere near as long, or as profitable as you, but I don't think the current sp ( 76p mid price ) is overly demanding, so I'm in no rush to reduce.
BB
The last full set of results ( https://otp.investis.com/clients/uk/provexis_plc/rns/regulatory-story.aspx?cid=1569&newsid=1192993 ) included some text associated with the company being a going concern
"The annual financial statements of the Company for the year ended 31 March 2018 and the report of the Directors thereon include a going concern statement which concludes that based on the level of existing cash, projected income and expenditure, and excluding the potential additional sources of funding, the directors are satisfied that the Company and the Group have adequate resources to continue in business for a period of more than twelve months from the date of approval of the financial statements. "
So, back in Sept 2018, they were saying they wouldn't need to raise cash for at least twelve months. Obviously not having to raise cash till ( at least ) Sept 2019 doesn't mean they won't raise cash before then, but I suspect we'll not see another cash raise till late 2019 or early 2020.
*cue an RNS tomorrow proving me wrong
BB