Member Info for Ceanothus

I'm not aware of any recent aquisitions.

And the rules for calculating IFRS profit deliberately ignore a large store of value. Which very materially increased in 2024 so I think it very misleading to focus on IFRS profit and talk of a PE of 25.

I was very pleased by this morning's results and would have been less surprised by a 15% rise than a 15% fall. But these things happen and I acted accordingly. If the market never disagreed with me, I'd never take any positions.

I'm not sure it has a lot to do with Lookers's prospects but "Sales of EV cars will also fall considerably as before long charging them will be more expensive than diesel/unleaded cars." is just plain wrong.
Anyone with any sense charges electric cars in the small hours at around 2p/mile. Only a tiny proportion of EV charging is bought expensively on the forecourt.

And my point is that it we have no evidence whatsoever that freehold was or is worth £28m. The waters are completely muddied by the leaseback side of the deal, the freehold without a top paying tenant attached could well really be worth £10m (or less).

Re "Don't forget they recently sold a Chiswick freehold with a book value of £10.5m for £28m"

I don't think that transaction offers the comfort you think it does. Recall they also agreed to pay rent of an initial £1.25m for 20 years, which totals at least £25m over the term. By the time we've allowed for rent increases it looks very much like borrowing £28m, paying it back with interest and throwing in the freehold.

There's also the question about whether leasehold reform will damage premiums for lease extension where the ground rent is deemed to be too large.
That said, I agree that the current price takes a lot of this into account.

I agree the positive circumstances are still present. But each quarter they persist is a pleasant surprise.

To be fair, the £90m probably is pretty one off, as it's due to unusually favorable market conditions which can't be expected to last forever.
But that didn't come as news yesterday, I too struggle to see why anyone would want to sell after results for 10% less than they could beforehand.

Look at the bottom of note 9 to see how net debt breaks down.
Regarding the lowly rating, perhaps Travis Perkins shareholders haven't been particularly keen to hang onto their Wickes freebies? Personally I'm not interested in speculating, it's enough for me that I currently consider them cheap. Probably there will come a time in the future when I don't think that anymore and I'll sell.

I don't think "net debt" is a halpful perspective for the £618m.
The liability side is not financial debt but the NPV of future lease payments. In return for which they will get the future use of the space. Which has considerable value: at £604.6m it pretty much balances the "net debt".

I'm not wild about the sales either. But I think you're overlooking that the outstanding loan balance were £537m. On the face of it as well as the interest received to date, they have made a £150m profit here by writing these mortgages and selling them on to Rothesay. Which looks like nice work if you can get it.

I've been putting some effort into getting my head around the situation, as it is indeed confusing how selling a LTM portfolio at £80m over IFRS book value generates a book loss of £76m.
Just divides profit into "new-business" and "in-force".
When insurance liabilities are taken on, they are discounted back to the present day at a discount rate. That rate reflects the expected yield from the assets that will back the liabilities.
My perspective is that the loss on sale is a recognition that historic new business profits have turned out to have been overstated, as with a smaller proportion of high yield LTMs in the portfolio a lower discount rate is appropriate.

I'd put the reasons for the drop as:
* Nobody likes to see an IFRS loss
* Yet another large chunk of mortgages to be flogged off at a considerable discount to book value
* More restricted T1 debt - the last tranche had to pay 9.375% to get takers. And why do they need it?

Thanks for pointing out these issues redwine - too often these chats are positive echo chambers.
I'm new to lookers - bought in for broadly the reasons fastcar mentions. But if the stables haven't been completely cleared out and there's still some dung heaps stinking up the place, I'd much rather know about it.

1 year ago the share price was 0.17p.
If you don't think 6x in the year is a really good return, I think you're destined for lifelong disappointment.

Very, very significant IMHO. Shame I didn't find out earlier and get a better price but I've bought back 300k this morning at 8.5-8.75.

No, it's execution problems. The business model calls for processing 30% more EAFD than they did in H1 and recovering more zinc from it than they did. And less costs phaffing about with heat exchangers. And selling the iron byproduct. And several plants sharing the corporate overhead. Anyhow, have you seen the prices Zn hit in 2007? http://www.infomine.com/investment/metal-prices/zinc/all/

To have broken even in H1 they needed an extra 6m profit. Thus they needed revenue 25% higher. Revenue is proportional to zinc price, which averaged $2133/tonne in the period. So they'd have broken even with a zinc price of $2666/tonne. That's answered the question you asked, but it's not a helpful one because there are other moving parts. Cash is the critical issue, profit less so. Going forward revenue should also be improving due to processing more EAFD. Costs should be coming down due to less heat exchanger maintenance and substitution of coal for gas. But those benefits may be for 2016, not H2 2015 where Q3 has probably made a $4m loss with another 3 week stoppage to come in Oct.

When SR Global decided to support the fundraising the Zn price was around $2000/tn (and they probably reckoned it was heading higher). It is now more like $1650. This reduces revenue by around £8m/yr but doesn't alter costs at all. At ZOX's scale this is a very material difference. All of the share price drop from 17p is explainable by the Zn price, operationally they seem to be sorting their problems out.

I think the risks are significant that they'll need more funding (and the going concern comments suggest the auditors think so too). If so, the terms may be very unattractive to existing shareholders. To me ZOX is uninvestible for now until the zinc price is higher or I know the terms of further funding. AW has no alternative but to be an optimist on zinc prices. Continuation of $400k/yr may well depend on him persuading people that it's so. Me personally, I don't know any better than the next bloke.

Actualy it's $6m in a half year, a $12m/year loss rate. Had the zinc price not collapsed, then continued improved throughput and the coal burning efficiency gains ought to have turned that to profits. Plant 2 then had the potential for large profits. But life didn't turn out that way.