Member Info for candidinvestor

Silver night ..depreciation doesn't apply to planes or income earning assets , these are based on revaluations

In my view it is market uncertainty which is surprising the share price , plus a lack of liquidity ..the majority of investors both retail and institutional are switching their investments overseas and who can blame them

It isn't to do with the demise of the stock market as this is just an investment platform . The problem is and always has been that UK companies no longer make money apart from a few , over any period of 3 years or more

Think about it ..US has Google and Meta ..we have BT . US has Amazon , we have the post office ..

Britain is in terminal decline and nothing is going to change that ...Boards of Directors collect salaries and bonuses for as long as they are able to ..they all know the companies they work for are loss making with no reason prospects ..they gjve investors a false sense of security , until the cash runs out and then they sell their assets

UK Boards are run by inferior people , anyone who is good moves overseas

Point to more that 3 investment trusts in the FTSE 350 that have made any capital gains over the past 5 years

Pretty soon it will be a case of turn off the light switch for UK industry ..they had the chance to take the lead with EV and high tech ...they persisted with oil and gas , pharmaceuticals , banks and tobacco and set up lots of investment trusts investing in same behemoth assets

Sorry to sound so pessimistic but wake up and smell the coffee ...any good companies are stolen and taken either overseas or to private equity

I have a stake in AA4 I am not that sure that it will be a prosperous one

DYOR

Simonm...how do you know all of this information you have shared. I don't think it is in the public domain is it?

Also is your post supportive of a buy , advice to hold , or suggestion to sell , and what is your conviction for either ?

Ordinarily my inclination would be to think that the announcement now , would be to not associate him with a bad set of results , or to blame him for them . I say this because if they were a good set of results , they would announce his departure alongside them

On the other hand , at 65 he is due to retire , and the fact that he is staying on might be to remain at the company long enough to arrange a smooth transition and sale ..

Of course all of this is speculation ..the only thing to do will be to await the results ..

At some point though , this share will start to rise ahead of the dividend announcement next week .

For what it's worth , I think this is the bargain buy of the decade , unless bad news awaits ..let's see

Reckless directors in my view . They have trashed the share price..

The £50 million bond equates to just 2 years of dividends

There is no way that the share price would be so low now if nil dividend had been declared to reduce fixed term debt in order to boost LTV

They would have been in a far healthier position had they done that , with long term prosperity and security

The problem with that option is the shareholders would likely sack the board..the way they chose , they stayed in employment for 2 years

Carillon revisited , and nobody is held to account

I think it might have been me who brought up the domicile issue , I can't remember, I know I have thought about it in the past , but not sure if it was me who articulated it , but it's something that should have been done

We all have this blind faith belief , that the directors of a company ( and Kenmare is no exception ) have the best interests of shareholders at heart and centre of everything they do ...get a reality check they don't , as evidenced by the 90% shareholder dilution that took place several years ago , despite the fact that they had approaches from other companies to acquire them , then as well .

Directors act in THEIR best interests because they know that few regulatory safeguards exist to prevent them from doing so ...their time horizon doesn't stretch further than their next annual bonus , so it's NEVER the right time for them to sell and move on ...somebody needs to take that decision out of their hands , but I'm not sure who

Unless there is something catastrophic that I do ing know about ( company has said nothing ) then this share has to be one of the bargains of the decade, and strategic buyers should be sought . That is what should happen, don't be surprised though , if events transpire in some form , shape or other which results in current shareholders wealth being diluted by another 90% unlikely you might think , but Kenmare isn't a share you buy and hold forever, it's one that you trade and hope you get your timings right..

I am not an expert on withholding tax , but my investment is held within a Sipp , does this make any difference to my eligibility of a reclaim of WHT ...does anyone know ?

Cantango...I agree with you re the debt position which is why I remain invested . The point I was making was the apparent behaviours of the market in general , not what you and I believe . I do think the market will catch up , and yes the share price will no doubt pick up as the dividend approaches ..frequently a zero sum game though , as the share price often falls by the amount of the dividend

I also agree that the RCF is a back up facility rather than a loan , interest rates are high though , and you only need a double whammy of commodity prices falling ,capex significantly overspending ( already increased from £272 million to £340 million I think , and the picture becomes less favourable. Add into the mix an uncontrollable factor , like lightening , power cuts or political interference and the risks become clear and evident

All companies carry risk though , but the difference regards Kenmare is that they commence this transition period with a cash positive balance sheet , and operations which generate lots of cash too ...and they can vary the dividends up or down

For me though , in the absence of all other things remaining equal , my view remains that Kenmare is significantly under valued , and the illiquidity of the shares compounds the problem

The illiquid market is a double edged coin ..just as the price falls disproportionately during a selling cycle , it will also rise disproportionately during a buying cycle , so from this point of view , you just have to be patient and wait for sentiment to reverse itself

The key thing with Kenmare is the fundamentals ..at today's prices there are generous dividends on offer, yet they only take up around 30% of after tax profits .

Yes there are the usual macro economic factors to consider , but I think the level of debt that they will be taking on in the next few years is making investors a little cautious

The one element that angers me and prevents me from investing more into Kenmare is the 25% withholding tax on dividends from the Irish Government ...this is a huge deterrent for shareholders to take on the equity risk with this company....does anyone know, why the hell they registered the company in Ireland in the first place ..on the face of it , a very shareholder unfriendly decision to make

For me though , the long term fundamentals seem good, and the capex is to boost productive capacity so the spend is well worth it.

Time will tell

There must be a hidden elephant in the room somewhere ..thus far I have only uncovered an idiot in the board room buying back shares on borrowed money earmarked for future capital spending

Thanks all for your responses ...in no particular order

1. Interest rate on loan is SOFA ( currently 5.31% plus 4.85% = 10.16%

2. I thought I read that there were ,$30 million of share buy backs planned so that is where the $3 million per year came from

Not a growth company ? Check out financial analysis on HL Website

Revenue has increased year by year , doubling from $262 million in 2018 to $525 million in 2023..

Over this period profits have increased from $50 million to $206 million

Net assets have increased from $890 million to $1.1 billion

The borrowings are to fund new Capex to secure production for next 50 years ...not to pay operating costs

Share buy backs are rarely an efficient use of funds

There are occasions where it is . Where a company or investment trust is winding down it's operations ..

None of these scenarios apply to Kenmare ...just ask yourself ..on the one hand buy back shares costing I think $30 million on the other hand , set up an RCF for $200 million at 10 % interest ....how can that be a sensible transaction ?

Sounds to me like the left hand doesn't know what the right hand is doing

There must be a hidden reason why this share is so cheap ..a reason that isn't implied by the information held in the public domain .. a company with a market cap of just £263 million pound , with £900 million of assets , trading at a PE ratio of 1.75

Markets rarely get it this wrong , so what is going on

This new $200m RCF at 10% interest just shows how crass the $30 million shares buy backs at £4.00 ISH when share price is now less than £3 and falling further ..

Had they not done the share buy back they would have been saving $3 million per year in interest payments at a time when they needed that $30 million funds they used up , to grow the business

Gross stupidity from a naive ( kind description )CFO who appears out of touch with optimal funding arrangements for a growth company

How recent is this podcast ...haven't had time to listen to it but title info on web page suggests 2021 ?

I thought you might be interested in this if you didn't already know about it ..

Sorry but I am not a member so I don't know any more

Https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://reactnews.com/article/regional-reit-to-kick-off-old-trafford-sale/&ved=2ahUKEwjfyaKUkJmEAxUDUUEAHSoRCScQFnoECBYQAQ&usg=AOvVaw3jc7O6hxTzDmHgBIqDnlJh

I think the most beneficial outcome for shareholders would be if they put all of their properties up for sale , and handed residual proceeds to investors .

The discount to NAV is still huge so they could afford to take a large hair cut and shareholders would still be in profit

Contango..this has more to do with the increasing rapid demise of the UK stock market .. pension funds are simply moving their investments overseas ..under such an environment it is so difficult to attract new investment , hence the decline in the share price , not just of Kenmare , but healthy companies too

I suggest you follow the herd , and move your money overseas too

The FTSE is now full of rip off investment trusts , getting their fees by investing in other providers investment trusts , none of them making any positive returns for their investors .. give me the names of any who have made surpluses for the past 5 years , very few .

Within five years the FTSE will be an irrelevant index

Get out while you can !

Dividend announcement was made at 1.56 pm

Dividend has been increased to 2.0p per share (from 1.75p last quarter ) for the quarter end 31st December , due to favourable cash position and outlook .

This plus favourable investor chronicle write up should underpin the price

Hi Mike , what I would add to the turnover analogy being for vanity and profit for sanity , being an ex FD cash is king ...so turnover and profits apart , cash flow is the reality ...I look for cash profits which removes so called " exceptional " items which seem to be a perennial thing...always boosting adjusted EPS...the reality is the current dividend level isn't funded by cash profits, but by asset sales, which is never a good sign

That's why I was wanting to know what the tonnage capacity now was ...the increases in rates is very welcome ..and should boost cash profits ...yes they did pay far too much for Grinrod . hindsight is a wonderful thing ..I would have liked to see a little " foresight " directors are very well paid , so you would expect more from their judgements about such matters , having said that , it is what it is , and I don't think the management team are bad in any way ..they seem quite competent , like you say , many variables are out of their control , so it isn't their fault ..like you say , in time, the cycle will reverse...25% loan to value debt, isn't too onerous , and interest rates appear to have peaked , so it possible that better times lie ahead ..let's hope so

Good luck all ..

Yep 1..I suggest you read my earlier post on this about share buy backs

The boy...if you have held Kenmare shares for 5 years then you must have doubled your capital investment, this excludes dividends during those 5 years. Well done you for that shrewed investment. If I was you , I would take your winnings off the table and put your money elsewhere, not the UK ..very few genuine growth companies around ...certainly no TESSLAs Meta, and Google and emerging growth companies.. FTSE 350 companies are now over populated with self serving investment trusts , NONE to my knowledge ( no doubt there must be a few ) who invest some of their funds into other uk investment trusts...two way commission cycle .no wonder none of them have made any money..go abroad...USA has Google and Meta..we have cuzzons soap and BT., and Aston Martin Lagonda, plus of course the aforementioned investment trusts such as Jupiter and Molten Ventures ..who the hell are they ? private equity company ..lost 75% over 2 years and never been any dividend..they do though charge a 1.85% management fee .