Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Are we expecting interims on Friday? It was Sept 29th last year.
Phil, I’m not sure what your 330m refers to. According to the latest TR1 on 13 Sept he owns 26.6m OBT ords which is 8.13% of the current issued shares. On the podcast he said he has owned 5% since 2012 so he hasn’t significantly increased his stake in the ords. Granted if my speculation is close to the mark then he is not going to see much of a return on those but the Argento Prefs, if converted, represent about 30% of the enlarged share book and therefore a far greater return for him. Anyway it’s a best guess so I would be happy to hear a reasoned argument against it.
I’m a long term holder. It’s over 24 hours now since I first bought in.....
Just speculation and could easily be wrong. We’ve been seeing the Chair buying up massive amounts of Argento Prefs. Over 10m worth in the last couple of months and yet the sp is down. How can that be? On the face of it it’s a massive vote of confidence in the company. All the analysis on this board, including mine, has focused on the convertibility into OBT ords at the current level which equates to 15p a share and have assumed that that must be where his plans are going to take us. There’s also the 5% div and the takeover ratchet but neither of those would justify such a huge investment. So why has he been buying the Argento Prefs not the OBT ords. He neatly avoided giving a direct answer to that in the podcast instead claiming that he found himself with some liquidity and there were willing sellers. Firstly who the hell finds themselves with a bit of liquidity to the tune of 10s of millions and would then choose to sink it into a 2 bit aim company. Not only that but why buy paper that is not easily tradable and converts at nearly double the current sp. In the podcast he also talked about wanting to raise the value of the company to new highs. He also acknowledged a few times that finance of some form is needed in order to achieve that. A characteristic of the Argento Prefs that we haven’t taken much notice of is the dilution protection. Any new issue of OBT ords and the convertion rate is adjusted to maintain the value. As a Pref share holder he is only focused on the MCap of OBT, not the sp. so what is the easiest way for them to raise the finance they need? The banks have turned them down so it’s issuing more shares. And if he wants to grow the company massively it’s a lot of new shares. That means that his interests as an Argento Pref holder are directly opposed to those of current OBT ord shareholders. He can grow the company through a series of fundraisers which will bring theMCap up to where the Argento Prefs convert at a big profit but the existing ordinary shareholder has been diluted out of existence. I haven’t yet been able to come up with a more plausible explanation hence why I have sold 90% of my holding. Just my thoughts and could easily be wrong. The terms of
Have significantly derisked here today. Think I’ve sussed what Pelham is up to and doesn’t look good for PIs. Have kept a handful in case I’m wrong.
20.20 is a buy. Just bought some more. Averaged up a bit but looks good at these levels.
Graham, I agree. 99% of AIM companies are un investable. I only follow a handful and even with them there is significant risk involved. I wouldn’t ever put more than pocket money in an AIM company.
Graham, re your 11.01 post, I appreciate you ended it with a ‘lol’ so probably weren’t being entirely serious but it’s a trap that many have fallen into, believing that cash in the bank must be available to spend. Whilst we wait for the distressed seller to finish doing his stuff I’ll tell you a story. Back in the 80s I worked for a commodity exporter. We bought delivered on 28/14 payment terms and sold fob on cash against documents. It was a money making machine. We could buy and sell at the same price and with interest rates at 12% our profit was what the money earned sitting in the bank for a month. A local trader approached me and asked could I come and work for him and set up an export operation. He offered me double the salary I was on (I think it’s called headhunting now). First shipment went to plan and suddenly he had over £1m in the bank. His eyes lit up and he started spending it. I pointed out that in a month’s time he would have to be paying the suppliers. His response was, sell another boat load and we can use that cash to pay them. It wasn’t a business model I could live with so left. He kept it going for a couple of years, living the high life, house in Spain, new merc. everyone thought he was the trader with the golden touch. Then the buyers dried up and it all came crashing down. He ended up doing 5 years at her majesty’s pleasure. Cash in the bank must be seen in the broader context of the liquid balance sheet. If your tangible assets are no greater than your short term liabilities it’s not your money in the bank it belongs to your creditors and you have to look after it very carefully for them to avoid serving time. The cash in the bank certainly wasn’t what prompted me to buy in here today. The balance sheet is precarious and the cash isn’t available to spend unless they can replace it with some form of finance.
Balance looking attractive now. Just bought a few sub 20. Seems a good entry price.
Feeks, I agree with you that the Iran contract is a unique situation and I am happy to acknowledge the genuine possibility that this Iran contract will proceed and will be lucrative. But I’m more interested in probability than possibility. If the contract gets the go ahead there will still be significant uncertainty regarding the ability to deliver long term and for it to make a profit. It will be years before that is evident. Trump is an irrelevance. It’s a complex contract with an unpredictable client being delivered by a company with no track record of success. For me that puts the probability quite low. Slipperz, if you have managed to get out of bed you will see that the RNS I referred to announced a 21 year contract with predicted revenue of 300m. Did the sp trade multiples higher as a result of that announcement? No, it continued it’s downward trajectory. Of course, it’s not a given that the market will give the Iran contract announcement the same response but there is a possibility and also more importantly a reasonable probability. I hope that for all of you who are hanging on to the the possibility that the sp will hit your target when the Iran contract gets the go ahead that your belief comes true for you. My analysis suggests that there will be an initial spike that will quickly get sold into and then the uncertainties will start to become more obvious leading to a continuing decline in the sp. As a result I am happy not to be holding. Differing perceptions is what makes a market and we all face the possibility of calling it wrong. Good luck and have a good weekend.
Etin, you wonder what price you'll have to pay when the letters are exchanged. Read the RNS on 19 Nov 2014 and then look at the subsequent share price movement. That should give you a clue. I’m not here out of concern for your interests. I’m here for my own interest. I trade this and today’s RNS was very informative. .8m cash in the bank tells me there is no imminent pump to keep the sp above nominal to facilitate a raise so sp likely to drift for a while. Next keeping the lights on raise not due for a few months. They are the ones I like to trade around so I keep a keen eye on cash levels and how quickly they burn it.
Slipperz my friend we will have to agree to disagree, discussion is pointless. The sp speaks for itself.
Slippers, your response confirms my observation about the opposing camps’ attitude to each other. You are clearly a believer and so you continue to hold. I am not, so I just trade it. You want an example of a signed contract not proceeding according to what they announced? I’ll give you 2 (there are, afterall, only 2 to choose from). The Lungi contract was announced as a 150m revenue over 8 years contract. It’s got about 18 months left to go but looks like the outcome will be no more than a 10th of the revenue they claimed it would generate. The second example is the ferry, which was announced as being a 300m revenue contract. Even someone who isn’t interested in the past can probably tell us how much revenue it actually generated. So of the 2 long term contracts they have signed one has 90% failed to proceed and the other has 100% failed to proceed.
Aiming high, we had this conversation 4 years ago. For some, every day is a day closer to the big contract so they stay invested. For others every additional day of delay makes the contract less likely and so at some point they give up and sell. It’s been binary here for a long time and neither side can understand where the other is coming from so resort to name calling. For a small group (of mainly ex holders) it’s become a trading share with fairly predictable price movements either side of the regular raises.
19th sept update: In its revised travel advice, the department states: “There is a risk that British nationals could be arbitrarily detained in Iran. All British nationals should consider carefully the risks of travelling to Iran.” https://www.gov.uk/foreign-travel-advice/iran
Apart from the sell....
Ok must be just me. I’ll have a look at investigate. Thanks
Anyone else having problems with RNSAlert? Very few notifications coming through just lately. Is there a similar alternative?
Someone’s woken up! Leaky news maybe?
Since they were issued the OBT TVR has increased so the convertion rate has changed. It’s now 1786 OBT for each Argento Pref. At today’s exchange rate that makes them worth about 15p.