I agree with you, pickedpeck. I suspect the geographical regions in which RA operates are a turn-off to some but, as you and I understand, they overlook the high creditworthiness of the customers, the risk mitigation via geographical diversity and the high barriers to entry for cost-comparable competition.
I’d have bought more if the shares were more liquid: top-notch company.
I may have gone too early Ragnar. I’m covered with plenty of short futures positions but the beta on natural resources stocks has been huge in this crisis.
SLP ought to bounce hard when the medical data finally turns: but perhaps it goes to 20 pence first! I hope not...
A bit of pound cost averaging in North London.
I just bought £25k at 36.5 pence. Cars will still be manufactured and purchased, albeit with a hiatus.
This share may now trade as a proxy of expected PGM basket price...but the outlook for two years from now suggests that the current price is too low.
I bought this a few weeks back at 195 and thought I was getting in near the bottom: we’ve all done it!
I think that when your sales price is Brent minus 21 or 22, then operational gearing can start to be a significant factor on the SP as POO falls. Also not helped by lack of transparency on the equation which gets you from BOPD to revenue.
Still a cash pile, great resource, expansion plan (albeit a slow one in terms of progress). I continue to hold....
Market cap at 48.5 pence is about gbp139m.
Assuming H1 results (net profit usd23.9m, PGM basket price usd1,830/oz) are replicated for H2 then that gives a PE of about 3.8. Clearly PGM prices have been hammered today, but the current share price suggests that either the market expects a much lower basket price from today’s level or the market has significantly overreacted. Or I’ve gone bonkers, which is certainly possible.
Please don’t nitpick the numbers: this is back-of-fag-packet stuff. However, do correct me if I’ve gone badly wrong.
Best of luck, everyone.
I just bought two decent chunks at 49.25 and 49.19.
The worry for SLP now is that the car manufacturers shut shop for a few months (though that may actually be more costly than them continuing to produce vehicles, I suppose).
This is easily my biggest position.
I agree that the market overall will start to stabilise when the sad truth sinks in that this horrible virus is going pandemic.
Completely agree, OAW and legs
The lack of communication is extremely poor. An operational update is well overdue with some detail on Seven progress, current bopd and also Niger situation, obstacles to progress, etc.
This is where the NEDs are supposed to do their jobs.
Reminds me of Amerisur so much...
In my experience, it isn’t so much the build time for the energy solutions but more the time taken for the various permitting and contracting (environmental impact assessments, grid connection licences, land rights for leeways, PPAs, etc.) Apologies if this is stating the obvious. The ease or difficulty is going to vary wildly, but there is so much market to go after which makes it so exciting. Path-of-least-resistance projects should really build momentum for the technology.
For me, the most attractive use of VRFBs is the bolt-on to built wind and PV sites. However, permitting can still be needed here if there is grid connection involved. I believe this may have been looked into for companies like the Ventus VCTs (VEN, VEN2, VNC, VENC), where I’m invested (and which have regularly paid a 7% tax-free dividend, he added shamelessly!) This type of asset would be a perfect fit for VRFBs.
Thanks Andy and Mr B for quality posts this morning.
On paper, this share looks significantly undervalued....but it’s all about what is in the 2019 financials for me, in terms of progress, production and outlook: especially since do much has changed in the past year. The stage seems set, but the overpaid youngster at the helm has to start delivering financially.
I bought a bit more last week and share the positive sentiment of other posters.
So much has changed since last year’s financials. I feel we may have to wait for the 2019 financials to be published to really get a steer on prospects from here that we can then analyse in detail. I’m very hopeful that those financials will be very positive.
I’ve no idea if the price will fall or rise before then, but I remain very confident for the outlook into the next two years.
Financial delivery is now paramount should the directors wish to retain their positions.
Thanks, theoryman and everhopeful.
What I'm trying to do is find a way of flexing the BOPD (toward the famed 55k, say) and use that to estimate the impact on profit and thus PE and valuation.
Last year's financials (2018) showed 31,563 gross bopd, realised price of $49/bbl (after the 21/22$ discount) and revenue of $250.6m. Notwithstanding the published WI of 80%, the above numbers would suggest a net financial interest of about 44.4%: however, matters are further confused by the revenue note on page 93. What is difficult is not knowing which of the deductibles to get to the net interest are variable and which are fixed. And of course revenue is measured on a cash receipt basis, so there's a three(-ish) month lag.
Let's say all costs to reach the revenue number are variable and let’s extrapolate 2018 implied NI number to 2019 production (very rough assumptions, I know):
32,883 bopd x 365 x $64-22 (Brent average for 2019) x 44% (implied net interest from 2018). That would give revenue of about $223m.
Or do the same for 2020 projections with current production flat for the year and current crude prices:
40,000 x 365 x $59-22 x 44% = $240m
Lots of assumptions, I know…and I haven’t even got to the costs analysis yet. I’d be happy to review any alternatives.
Going down this route helps me to estimate where valuation might end up in, say, Dec 2021.
I bought in here a couple of weeks back at 195.
Lots to like in the fundamentals and the growth story (if they can deliver on it, even if late!)
What I find the biggest concern is the disconnect between BOPD and revenue. I believe our interest net is 58%, but even that’s not clear. The note in the accounts on revenue accounting policy makes it clear that nothing is clear; it’s Iraq, of course...
If anyone can direct me to an RNS or a posts here that can help to even partly reconcile BOPD with revenue I’d be grateful.
It would make a change from the usual handbag fights on this board too, which are tedious to say the least...
Thanks, PP, for your response: you’re kind. I fully agree on the issues surrounding shares being tightly held: this is a definite buy-and-hold for me (absent adverse news, of course); I suspect you share that view.
Thanks also to rivaldo for posting the Cenkos update; much appreciated.