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Dividend up 15.1% in 5 years, versus UK CPI up 22.2%, directors' salaries up 16.6% in the 4 years to August 2022, accompanied by 76.8% more shares and a share price down 39%. Enjoy your celebration, LTI, but the manager should be sacked.

LTI - it is blindingly obvious that all this new money has not benefited HFEL's investors, but has been squandered. It has not produced commensurate income, so HFEL has been failing its purpose.

I thought I had, ade2a, but I'll look at what I posted and, if it needs supplementing I'll do it, but later, not now.

Longtimeinvestor, as your name implies, you apparently believe that all your investments will come good. I admire your fortitude, but not your comprehension. My point is not that HFEL shares have lost value, it is that Henderson has spent investors' money futilely, buying shares of poor quality in a desperate but failed effort to raise the dividend. Neither the dividend level nor the portfolio value reflect the money spent. I've done the maths and posted what they reveal.

By the way, if new equity is used to buy poor shares, the fact that the equity was raised at a premium just means that even more money was wasted. If the new funds/new shares do not add up to increased dividends per share, why buy them? This is supposed to be an income fund - it's in the name.

I have looked at the price/NAV graph, for the past 5 years, which I would have liked to reproduce in the post but couldn't. It's a disaster, isn't it? What is special about 223p? As I have pointed out, although the DY goes up when the SP goes down (this from chapter one of the trainee manual), if the dividend itself doesn't reflect the value of the additional equity the manager is failing and, indeed, squandering investors' money.

If you are waiting for the Hang Seng to double, to justify what the manager has done, you seem likely to wait long time. Don't you read the newspapers? Even if share prices recover, that doesn't mean that the companies in HFEL's portfolio will suddenly become so profitable that HFEL will have the income to match.

As is so often the case, the high DY means it isn't trusted. As an investor in HFEL, I am appalled at what I have found. It would not surprise me if there were now to be a move to wind it up, at which point all we would get is the NAV.

Longtimeinvestor, you say, “The shares may well return to 'normal ' again in the near future,with the share price at a premium.” This does of course beg the question of what is ‘normal’, although you might be right that buying now will eventually provide a capital gain. But this is not a growth company, making bigger and bigger profits. It is in fact struggling to keep its head above water, in the sense that its only object is to provide an income from its investments, which is needed to satisfy an ever-growing body of investors. In that respect, it now seems to me that it is rather like a Ponzi scheme, inasmuch as it is constantly seeking new investors in order to grow its dividend; this inevitably means that the quality of its assets will deteriorate, thus limiting the potential for a ‘return to normal’. When HFEL began, it could focus on quality, but as Monkeyman99 has observed, that gets more difficult as the portfolio grows, as illustrated by the rising audit cost, from £35,000 in 2018 to £58,000 in 2022, an increase of two thirds.

In 2018 there were 121,13mn shares, but at 31.8.22 there were 154.95mn, an increase of 27.9% more mouths to feed. This activity raised an additional £107.3mn, but by the end of last August investment value had actually fallen, by £24.1mn. If investments had instead risen in line with new capital, the value would have been £818.0mn and the DPS be touching 39p. However, as the figures I quoted yesterday show, only one quarter of increased profit after tax has been converted to EPS/DPS. HFEL has become a value trap, just because of the DY. DPS for the 4 years since 2018, plus those for 2023 to-date, total 110.7p, but the share price in that time has dropped by 143p, from 361 to 218. Those buying in 2018 haven't even had their money back.

Thank you, Monkeyman99. Your research has confirmed my fears about this company, which forms a relatively significant part of my ISA portfolio. It is evident to me that HFEL has been repeatedly issuing shares in order to buy additional earnings and profits with the proceeds, so that it can continually increase its dividend. One adverse consequence is that the accompanying dilution substantially reduces the effect on its EPS/DPS. Another, which is a real danger, is that in straining to acquire more dividend income HFEL is buying companies of increasingly poor quality, which will hold the capital value back when markets recover. These are the stats for the past 4 years:

Revenue up 33.7% and profit after tax up 37.9%, BUT EPS up only 9.9% and dividend up only 10.2%.

In that time, net assets have been static, but share capital is up a staggering 76.8%.

How long can this continue, I wonder? Growing portfolios imply growing management responsibilities, as well as the greater risks that come from (a) venturing more widely and (b) having too much money to invest.

This is what I

Don't just look at the Primorus RNS, but look at Primorus itself. With a market cap of £3.5m and total assets of £5.28m, this is clearly a company whose judgement should be respected...........

So many hopes have been dashed so many times in those who follow this share. It's a long time since I contributed, but I watch the price out of interest and occasionally look at the chat. There have undoubtedly been opportunities to make and take profits along the way, because of volatility, but the idea that the share price will one day soar strikes me as a foolish fantasy.
When I last participated in these conversations, I pointed out that the company was first listed with a share price of 2p. Some thought that could not have been possible, but it's true, as anyone can see looking back. Now, after all the discoveries and confirmations of value - but only of stuff in the ground - the share price is merely 80% of where it started, many years ago. But that is not all.
Along the way, multiple shares have been issued, so that if the share price were still at 2p the market cap. would be £71.5m. Who is going to pay that to acquire GGP, when it has yet to turn its gold into cash? No-one. What is the most this company is conceivably worth?
To turn the gold etc into cash will require further investment, much, much more, whether it is done by GGP or another company. How, then, can anyone buying shares today, let alone at 2p, expect to make money out of GGP, other than from short term movements?
Someone will probably write in and say I'm missing something . Well, may be, but the facts I have set out above are pretty themselves fundamental, it seems to me. The shareholders have been consistently let down by the directors,. The value that might have been there, if at any time they had produced a workable plan to turn gold into cash, has surely been irretrievably lost.

Really? 1,000,000 x (1128 -800) x 25 = 82,000 doesn't it? That's more than £63m, but discount the value for other factors including time required. Anyway, this is what I find bemusing; it's no different from the past 10 years or so of speculation , but if you're right why isn't the share price already more than 3p, to allow for all the other stuff?

I first bought into GGP in 2007, then again in 2013 and 2015. After attending the 2017 AGM I concluded that the directors were explorers only and had no idea how to turn their discoveries into cash. So I sold half my holding for 2.22p and a very substantial profit, having bought at an average price of 0.428p. Because I thought I might be wrong I kept the other half, but after the 2018 AGM I sold most of that to make better use of the money. What I have left has cost me nothing but it has kept me interested. Occasionally I look at the posts, which are always more of the same, hoping for El Dorado, speculating where the share price might go.

To answer my own question, I don’t see how GGP can be worth anything like its present market cap, so once the share creeps above 2p, or thereabouts, I will exit. That is, unless someone cleverer or more knowledgeable than me can post an explanation of why I am wrong. I think the directors must think we’re all mugs.

May be you have written too many posts to give us the answer. Do you not agree it's a valid question? This company has no customers. It is a mineral exploration company, which should be worth only the net value of what can be extracted. What do you think that is?

Here is the question: how much could this company be worth? Its market capitalisation is already £63m. That’s 56,000 ounces of gold at today’s selling price, but rather less if the costs of extraction, refining and transport etc are taken into account. The company had £4m cash at the half year, but that’s committed to further exploration, so more capital will be needed to turn the mineral into money for the shareholders. How much will be needed, by GGP or a buyer? What will be left for GGP shareholders – more than £63m, or less? At £63m, we will get less than 2p for our shares, yet 2p was the price when the company launched on AIM thirteen years ago.

Last time I wrote that, in December 2018, I was initially disbelieved, but it’s true. Not only that, but the market cap then was a mere £3m. Now it’s 21 times as big, but not because the share price has risen, only because the directors keep issuing more shares and finding buyers for them.

The company has masses of gold in the ground (mostly in the middle of nowhere), it continues to spend money on exploration and the directors won’t, or can’t, tell us how it is to be turned into cash or at what cost. It’s certainly possible for us to make money by buying every time the share price collapses as investors leave in disgust, but for GGP to be the bonanza that some are expecting the company has to be worth a good deal more than £63m. That is, without the issue of many more shares. What is going to make that happen?

Yes. Gold but perhaps more than just dust. Look at the balance sheet and adjust the PE for the NAV, then see how much it is truly undervalued. My guess is the directors named a price way above market value which Halstead couldn't stomach.

Replying to 1GW_'s thoughtful observations.
Goodwill: Yes, in monetary terms RTHM’s is much larger, but related to total assets/net equity it’s smaller – 44% versus 51%. Treating it all as a single CGU might make it easier to fudge. With regard to goodwill impairment, I’m not an expert, but I think goodwill write-offs relate to balance sheets of companies taken over, to be replaced by goodwill arising from the takeover.
Audit: The length of an audit report should not be seen as a product of regulation but as a measure of how detailed an audit was. To read, “I looked at the figures and everything seemed OK” should not be seen as at all comfort-giving, especially when the accounts contain a lot that’s subjective.
Revenue: One aspect that ought not to be subjective but might be is revenue recognition, especially when the ratio of trade debtors to revenue is high. RTHM’s note about this is very detailed and perhaps worrying because of the complexity, but TAP’s is quite brief and therefore perhaps more worrying.
Debtors: TAP’s trade receivables rose to 37% in 2017, from only 22% in 2016, with no analysis or comment provided in the notes or CFO’s review. RTHM’s rose too, but only to 33% from 28% and coupled with detailed analysis.
Intangibles: TAP’s interim results do suggest an improvement, but it’s 64% - $58m over $91m after discounting the new equity less loan repayment. But what will it be like after taking over RTHM - $200m over $230m perhaps, 87%?
Governance: Both 2018 AGMs were in London, but whereas RTHM’s was at the comfortable time of 11.00, TAP’s was at the extremely unfriendly time of 08.00. TAP also broke a QCA rule (to which it claims to adhere) by not posting either the resolutions or the proxy votes.
Conclusion: I can see why TAP is a commercially attractive business, for which some even paid £4.50 a share a year ago, but with strong doubts about the accounts it is not an attractive investment proposition (especially with the world headed for recession), so I still think that, for me, the right decision was to sell RTHM at £2. I’m signing off now, but good luck to the rest of you.

Thank you, stt1. But 1GW_'s are worthy of study, which I will do and post again.

To Rustybucket and anyone else who thinks similarly. What is the question you would like me to answer?

I don't intervene in these chats unless I have something to add which I think has been overlooked by others. No-one has commented on the published facts that I've mentioned in this instance and I've declared my position (ie all sold and I won't buy again, RTHM or TAP). I really thought RTHM was in a good position when I bought more at the end of 2018, but it's evident that none of the contributors here can explain with confidence "What's Going on Again" now. It's fine to believe in a company, or if you prefer in a share, but when the facts change, as Keynes famously said, he changed his mind and so to I. I'm sad for those who are suffering a lot of value, but so do I from time to time and we should expect it: those are sunk costs and the question now is whether what's left is worth leaving in RTHM/TAP, or better off somewhere else.

I too lost money on this share in previous years, bought in again in October 2016, watched the price continue to go down but lived in hope, then it turned on the back of last year's annual report so I bought more. I liked what I read and thought the prospects good. The sell-out (that's what it is) to Taptica is bizarre and doesn't make sense to me. What is evident is that buying or holding RTHM now is investing in TAP, but although TAP is reporting profit and even paying a dividend, having looked at the annual report it's not a company I feel able to trust, so I've sold RTHM at £2. As I've observed here before, TAP's audit report is a mere three paragraphs; it effectively tells us nothing, yet TAP's balance sheet is 95% dependent on the directors' valuation of goodwill and other intangibles, providing huge scope for 'error'. It will of course be stronger with RTHM, but both entities have plenty of scope for bad debts when the music stops (recession or other cause), 121 days outstanding for RTHM and 136 (four and half months) for TAP. All hope of share price gains depend on speculation by others so good luck with that, but the oddities of this 'merger' do not suggest a well established business any time soon.

16 TAP shares are offered for 19 RTHM. Yesterday, RTHM was at 187.20, so 19 of them were then worth £35.57. TAP shares were then at 167, so 16 were worth £26.72 - that is 25% less. Why would anyone sell a RTHM share at 25% less than the market price?
Now 16 TAP shares are worth £30.80 and 19 RTHM shares are worth £31.24, so TAP investors are still expecting to profit, but RTHM investors have already lost 12%. Buying more RTHM shares now would be an expensive way of getting into TAP, so I don't understand the thinking of those who have suggested doing this. Buying TAP shares to get the benefit of RTHM when the merger goes through (assuming it does, of course) would make more sense, but you'd have to believe that the present price of TAP will stick.

The sharp rise in the TAP share price today and the fall in RTHM suggests that this is not a good deal for investors in RTHM. RTHM has been on an upward slope, but TAP has been downwards. The RTHM balance sheet also looks stronger, with goodwill and intangibles being ‘only’ 75% of net assets, compared with 95% for TAP. Note too that whereas the RTHM auditor’s report is 4 pages long, that for TAP is just 3 paragraphs. TAP will be much stronger if this goes through, so why the low price being offered?

Oh and by the way, Prospector, I have not called for GH to go. I think AB should be replaced, because he appears not to see beyond the golden glow surrounding GH. The function of the board is to ensure that the company is set on a path that will reward its investors. Unfortunately 82% of them are in nominees so the board is not exposed. Read successive years' strategic reports in vain to see how the board - not GH - plans to turn gold into money: that's my reason for dissatisfaction.