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This has been savagely marked down to below 500p as can do when firms are burning through cash although this wasn't really 'burning' through cash as such. With the metal prices around these levels, Fres will be looking at $500m more in revenue which will almost entirely be booked to profit as there are no further costs associated with those revenue. This means a 200-300% profit uplift!
This will need to be massively rerated once the current metal prices becomes more established. The big rises of the past could well return to reward the patient and clever investors who averaged down and traded this along the way.
Hi Tony, if they meet forecast 18% revenue increase, it will mean extra income of $500m over 2023. This would finally put the small -ve cashflow last year of $40m to bed and turn it into $500m cashflow surplus if they are able to keep the lid on costs, exploration and capex as per their forecast.
H1 will prove this. Still quite a wait until the results.
Sharpey, Japan has done massively well. Huge amount of world leading companies, low inflation and a growing GDP per capita. That is the metrics that matter. Not GDP growth driven by immigration because the migrants don't bring hospitals, roads or schools with them.
LW, "It was predicated on a certain level of growth to offset the additional debt. The debt pile was already too big. Productivity was, and still is, too low. It was not a risk-free play."
This is exactly what Laffer said. It is not risk free but it is a worthwhile direction because I actually think the result would surprise to the upside. Brits are incredibly innovative and entrepreneurial. As for the debt level, Sharpey has just proven to you that no amount is too high and UK's level is not that high relative. Kwarteng got stabbed by BOE and shot by media before they had a chance to formulate a plan. Or rather, their execution was very naive in that a plan should have been carefully thought out and cooperation obtained first. They were poor politicians.
It is like you obtain a loan to start a business. If you have a business plan, and execute it, it will most likely work out. There are risks but everything has risks. Tax and spend will just drive this country down the drain slowly. Kicking the can.....
Do peeps know who Arthur Laffer is? He is the person behind the well know Laffer's curve whereby there is a certain marginal rate of taxation whereby if you increase it beyond this point, it raises no further revenue for the state because people would stop investing, working, or increase avoidance.
Interestingly, he shared the same view as me on Kwarteng as below:
>>>>>
Perhaps it should be no surprise that Laffer praised the previously proposed Truss-Kwarteng tax cuts, even if the execution of their plan left something to be desired. As quoted in the Telegraph, Laffer says:
It was an excellent thing. The thing that was not excellent was that it didn’t get implemented. It’s amazing how tax cuts don’t work until they’re actually put into effect. If it had been tested, it would have worked wonderfully for Britain.
For Laffer, the Truss-Kwarteng approach could have been a success on par with the Thatcher tax cuts of the early 1980s, no less. “When she came to power in 1979, the top rate was 83%. By the end of her premiership, it was 40%.”
Total tax revenues were also far higher, although not at first. It takes a while for the “Laffer tailwind” to kick in, as it were. A similar dynamic was seen in the early Reagan years in the US, much as Laffer predicted.
>>>>>>
We need to have the guts and conviction to leave this tax and spend approach behind. Reward investors and workers and the economy will grow and everyone including the poor will be better off as a result. It is not by accident that Ireland is home to many big HQs and one of the highest GDP per capita in the world when their corp tax rate is 12.5%. AZN was right to relocate their factory there!
Thanks bonks. Let's hope your long term chart prediction comes good.... I have always just used charts for short term trading. I felt long term was more guided by Macro than what's in the charts...
The business seems to have largely navigated the cost increases and cashflow drain seems to have pretty much been halted. Only a small deficit of $40m now for H2. I had expected a small surplus but I was wrong. However, the PM prices are different now so if they stay above $1956 and $23.6 silver, this should be on a growth path especially if production surprise on the upside.
BTB, absolutely spot on. The general public got hoodwinked by the popular media..... there were a few voices like us but they never got much air time beyond a few minutes in the late slots. It is our left wing leaning media that seems to lead government policies. The whole of whitehall will not cooperate if they don't wish to. It is almost impossible to change tack if you were the government.
Sorry last post was meant for sharpey no BTB
BTB, in general, I agree with you on the investment part but I disagree on the borrowing part. You can borrow any amount you want. You just need to package it with a credible story. No one blinked when Rishi borrow hundreds of billions for furlough and need I point out Biden?
That was their naivety. They couldn't package it and sell it or they were to arrogant to bother. AB stabbed them in the back too...
Poker, money has left UK market because other markets are performing better.
LWHL, I would not call Kwarteng a fool. LT maybe. Naive is what they were. It wasn't the bond or stock market that precipitated their doom. It was the LDI market whereby the sudden fall in prices of their "bets" that led to margin calls causing a domino effect. Holding bonds to maturity would have been fine.
The real fool was Andrew Bailey which had a fallout with them. The real cause of the interest rate hike! Unfortunately laymen and popular media are too thick to understand this. It is laughable that rates are now much higher than what it was then.
The trouble is, once you gain that reputation of undervaluation, it becomes a self fulfilling prophecy. ARM would not have hit such a high note here so it was right for them to list in NYSE. US is just going to gain more companies and LSE less. Only those with dodgy books will get listed here....
High tax, low growth, high regulation has made UK a low investment country. Bring back Kwarteng is what I say. Sunak and his successor Hunt are just susceptible to group think and Rachel Reeves will make matters even worse by wasting valuable money to champion industries that can't stand on their own feet without our money due to my first 3 points.
Fog, I would advise play the play, not the player.
Hi sharp. This one is not going to go bust and as you rightly said, there is a minimum value that this will go to because there is money in the bank and gold in the dirt! They will pull in 2.5 billion worth of greenbacks a year so what is left to be worked out is, how much will the spend.....
Oh, and from memory, this has always fallen before every report!
Actually, interest rate cuts or even just the hinting about doing it will weaken the dollar. This will boost gold and silver through combination of opportunity costs of holding gold and weaker dollar makes gold appear cheaper.
This will boost miner's bottom lines and should it enable Fres to achieve positive cashflow (meaning inflation under control), I will agree with bushy that 800 will come. We will find out in a few days.
Squeaky bum time.
Carnage after a missed inflation figures. Time to trade....
Jmax, the key in getting this to 1000p would be positive cashflow. The last 2 years have been badly hit by negative cashflow due to high CAPEX and costs. If Mar numbers can show $200m positive cashflow, then this would fly.
Hoc and this seems to be the only PM miners on the move? I wonder why that is.