Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Alessandro, opinions make markets, I'll check back in a years time and we'll see how it turns out. As an aside, I do hope those who take and hold IP make a profit, that success will cost me nothing (except a bit of regret!) IMO my money will be better deployed elsewhere...
GLA
The agreed deal is for SDMS shareholders to get 0.1285 of an IP share for each SMDS share held. At present rates of exchange and with the IP SP closing at $35.38 that equates to a value for each SMDS share of £3.67. Expect the SMDS SP to hover at or very slightly below that value until the deal closes, unless, as I half expect the IP SP falls a little . I sold at 341p a while ago and have missed the opportunity to sell at recent highs , well done to those of you who did sell more recently, not a great additional return for those still holding.
As an aside it's worth noting that IP has P/E in the 40's having made only $300m last year on a net income of almost $19bn. Would I hold? I leave you to guess the answer.....
Slightly disappointing RNS this am, organic growth 4-6% everywhere except NA where integration and a stronger than anticipated £ has impacted. I am happy to hold , expecting both to change over the next 2 quarters. Recent figs suggest UK will reduce rates before US (and hence£ FX rate will fall), US housing market is likely to recover sharply and also RTO's US integration will start to bear fruit. Still comfortable with an estimate of >£5bill revenue and PTP of ~£700m. Looking for a forward P/E in the teens and an SP of ~600p before I consider selling .
Hi I made a point about the latest accounts on 22/3 identifying that the latest numbers included a loss on interest rate swaps (and some other financial wizardry), which negatively affected the numbers and IMV caused the SP fall. I have finally got around to a comparative analysis of these figs over the last few years and they make worrying reading.
NOTE all figs below are extracted from Annual reports and are summary only , things are NEVER quite as clear as they seem.
In Year 2020 JDW made a loss of £ 122m, of this £33m Loss was due to IR swaps.
In year 2021 JDW lost £133m despite a profit of £55m on swaps.
In 2022 JDW made a profit of £50m which included swap profits of £44m.
In2023 JDW's profit was £79m of which swaps contributed £23m
To repeat these sums are shown in the various AR's BUT depending on categorisation differ in various notes to the accounts. My point is simply this , JDW is a high sales, high costs business with wafer-thin margins, I have
known the variation in accounts is highly sensitive to the way in which JDW's finances are managed, but didn't fully realise the impact of it. Having sold lately I am wary of re-entering .......will be back sometime in the future if my
vie changes.
GLA
....Is in highest level of Contango ever recoded at $105 above the "spot" price. That suggests dealers (who generally know their stuff) expect the price to rise sharply .Copper is AAl's second largest earner and contributes about 0ne third of Ebitda ....
TS cruising is a rapidly growing phenomenon, estimates suggest numbers will rise from 31.5 to 35.7 mill this year , a trend which has continued (except for Covid years )for two decades.
CCL has about 50% of the market. Like all cruise companies, they are in recovery mode. Their operating losses were $10.2 bn in 2020,$9.5bn in 2021,$6.1 bn in 2022 and break even last year. I expect that trend to continue and for them to post a substantial profit this year.
The debt profile is , in fact diminishing sharply... from$10bn in 2020 to$7bn in 2021,$5.1bn in 2022and4$.7bn in 2023.
It won't be clear in this FY but it will be a significantly lower drain on operating costs than before.
It's very simple really , they have a cash-generative business , full ships and significant revenues, BUT In order to survive the "Covid " years they incurred debts, the cost of servicing those debts last year was $2.06 bn (sufficient to wipe out the OP of $1.9 bill). During 2022/3 they issued a little over $10 billion of debt. That problem is diminishing as revenues continue to flow in but it hasn't gone away . IMV it will, over the next 1/2 years and CCLwill return to being the cash cow it was pre-covid. I hold quite a few at an average of
Added at 1179 a few mins ago, whatever the short-term oscillations, this will rise , full bookings, massive debts being paid off / rolled over at lower rates, and an in-demand product. I was in Arrecife recently , almost every day an AIDA, Cunard or P&O cruise ship was in port, all full, and chatting to a few customers all lovin' it.
Hi Boyo,, Via Ocado retail MKS get to shift £2.5 bn of their goods per annum(at current volumes) that they might otherwise not sell and it captures >1mill of customers who they otherwise might not have . The profits from that activity flow through to MKS results, so my point remains . BOTH sides benefit from OCDO retail, even if it doesn't directly make profits.Clearly it will do so in the longer term and IMV may well become a different entity at some point , owned fully by MKS or reverting to a more typical OCDO relationship where they collect a fee...I still hold to my view that for OCDO its greatest value is as a large-scale working model of their solutions.....The benefit for other customers is NOT that the model per se is profitable but that it is a necessary tool in a changing world and will support their main business of selling groceries...
I've said it here before but it bears repeating, Ocado retail is a full-scale demonstrator for the real product which is OCDO tech solutions. Its primary purpose isn't to make money BUT it is now on the cusp of doing so. Todays figures are OK , not stunning, but sound , they illustrate that large volume home delivery of groceries is a business that can be profitable and as habits change will become more so. That is a concept accepted by large-scale retailers in UK, US, France, Spain, Korea......In fact in ALL developed countries.
I have been adding here at recent low levels because I know that the OCDO tech solutions business will eventually be the core of a very profitable company.
I'll finish with an anecdote. I Was talking to a wealthy US citizen while on my hols . He works for an investment company and his comment on home delivery was
" It costs me $5 dollars per delivery , I make that every minute , why am I going to spend an hour going shopping , queuing to get into the car park , pushing a trolley round and then unloading it at the checkout, bagging it and doing the same at home .... It's crazy, in the US everyone in work will eventually take home delivery , that's a hundred million households....."
That's my case for holding here...
"Revenue is vanity, profit is sanity but cash is king...."
Revenue £993m
operating costs £923m
Operating profit £67m
Post tax profit £25m
It pays to understand the accounts of any stock you hold, JDW is a well-run business in a competitive market and their margins margins are paper-thin.....
Sorely tempted to buy back my stock from this AM 's sale : BUT In my experience market moves like this sometimes have further down ripples over the next few days , as at the mo I'm waiting. Incidentally anyone who has read the media's market commentary today will see how utterly inept and ill-informed media comment is, see this from the Telegraph
"Wetherspoon profits surge as it moves past woes of lockdown
Pub chain JD Wetherspoon revealed profits rocketed last year as its chairman issued a swipe at the lockdowns that ravaged the hospitality industry during the pandemic.
The company’s pre-tax profits catapulted 682pc to £36m in the year to the end of January, compared to £4.6m in the previous 12 months."
and this from proactive investors
"profits on the back of an improvement in margins.
Operating profit climbed 81% to £67.7 million over the 26 weeks to January, the pub chain reported on Friday, following an 8.2% increase in revenue to £991 million.
Like-for-like sales climbed 9.9% meanwhile, as margins widened from 4.1% to 6.8%.
This remained narrower than pre-pandemic margins though, which had sat at 7.1%, as two years of rising prices still appeared to be weighing on the industry.
“The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance,” chief executive Tim Martin said.
He also highlighted the chain’s concerns over potential future lockdowns, which prompted the likes of pubs to shut their doors in 2020, and the time taken for the government to review its response to the pandemic.
Debt increased over the half year, Wetherspoon continued, by 5% to £1.11 billion, while free cash flow plummeted to an outflow of 4.8p per share, against a 132.4p inflow last year, due to payments owed to the likes of suppliers and the tax office
The market's just woken up!! live price is in the 750's . I sold 80% at 789 at 8.05.
As usual, the market is IMV overreacting and for those still holding I suspect it will recover over the next few minutes/hours/days / weeks .
'spoons is still a well-run company in an area that isn't going away.. I will watch today and may buy back if it holds at theses levels , 'cos I believe it will recover, this is a One off as detailed in my previous post.
GLA
Bit of a mixed bag, on the surface all looks well , and the actual business of running the pubs seems to be fine, BUT the accounting wizardry of previous years seems to have come unstuck,( see note 2- leading to substantially less profit and eroding the generally sound financial position ,see this quote
"A charge of £6,237,000 (2023: income of £49,887,000) relates to the fair value movement on interest-rate swaps. Income of £176,000 (2023: income of £1,913,000) relates to the amortisation of the hedge reserve to the P&L relating to discontinued hedges and, £5,425,000 (2023: income of £13,291,000) relates to hedge ineffectiveness reclassified from the reserve to the P&L in relation to terminated swaps."
it is a one- off and so it's not clear how the market will take it, but IMV it may be seen to be a major negative.
For my part I'm currently up ~ 50 % here having quite a few at a sub 500p average and am inclined to sharply reduce my position at the open ,if I can get 780+.
watch and wait
It is clear that the bridging finance used to fund the BAE purchase of Ball will have been at higher rates than the 5.00-5.50 for the "new " money , successfully getting the offer away will be a positive for BAE. At those levels a few basis points saved are worth quite a lot . In addition the positive signal of being able to raise that sum illustrates the debt market's confidence (which I share).
In other news "OZ" has confirmed today that BAE will build the AUKUS subs and work has been committed in SA and WA and funding includes £2.4bn between BAE and RR in the UK. See
https://uk.investing.com/news/stock-market-news/australia-earmarks-billions-for-naval-infrastructure-as-bae-wins-aukus-submarine-work-3394992
I have sold, so won't be bothering this board much in the near term, BUT I was a confident holder in SMDS , a well -managed company in a growth area. I chose them over Mondi(or others) for what I still believe are good reasons. Mondi's SP peaked at 2100+ in 2018 and their latest results published on 22 Feb (I suggest all holders here have a read! EBITDA down 600m euros, revenues down1.2bill euros ) have been followed by a 7% drop in the SP. The markets are making their reservations clear.
No more from me on this topic , I am happy with my decision and respect others whose views may differ, and so long as you are well- informed I wish you well.
See
https://www.londonstockexchange.com/news-article/CHG/funding-awards/16381061
Approx £ 90 m awarded by EU/Norway to fund additional production at CHG's factories, equivalent to almost 20% of last year's revenues. This year revs will be >£600m , PBT >£100m, and with patience the SP could still rise significantly from here.