Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
All within expectations of the previous H1 outlook. Revenue decreased by 9% which is more than priced in. £704M of liquidity.
Cash was up on last year: Adjusted cash from trading operations2 of £193.3m (H1 2019 £187.8m); Adjusted free cash flow £176.0m (H1 2019 £30.1m); improved operating cash flow and a £77m benefit from early customer payments
Trading at 170p in January and business is down 10% in H1 (5% related to Covid).
Winning new contracts and selling off +£500m Education business.
Sp at 44p! Madness.
Capita positive H1 trading update
Revenue in H1 is expected to be around 10% lower than 2019, of which 5% relates to COVID-19
Cost savings of at least £45m
Sale of Eclipse Legal Services due to complete shortly Commence process to dispose of Education Software +£500m
So a 10% decline in business warrants the share price dropping to these levels???
significant short close and decrease from Sandbar Asset Management yesterday -0.78%
AQR Capital has been slowly closing shorts For the past couple of weeks. Down again on Thursday by -0.15% to 1.84%. No doubt this trend will continue and boost the sp. https://www.shortdata.co.uk/company.php?isin=GB00B23K0M20
Agreed it’s a significant deal and the contract details should push the sp beyond 35p.
Contract to follow the LOA Letter of Award from Seaway 7 should drive the share price IMHO.
https://energynews.biz/2020/06/lamprell-to-provide-wtg-substructures-for-seagreen-offshore-wind-farm/amp/?__twitter_impression=true
Lamprell has received Letter of Award (LoA) from Seaway 7, the renewables business unit of Subsea 7, for the provision of Wind Turbine Generator (WTG) substructures for the Seagreen offshore wind farm.
Large amount of upside based on the Lancaster EPS alone
We had already cut our risked NAV to 45p/sh (US$35/bbl Brent in 2020 and US$60/bbl long term; 10% discount rate) to factor in the lower production and also using a higher risking on Lancaster. Whilst there is clearly risk, taking this into account still suggests significant upside. Our core risked NAV is 25p/sh, which gives 200% upside to the current share price, only giving credit for the Lancaster EPS. Hurricane's current EV suggests a value per barrel of just $0.5/bbl for Lancaster, a significantly de-risked 500mmbbl producing oil field and the UK’s first fractured basement development. Hurricane screens as cheap even on current production trading at an EV of ~US$25k per boe/d and $8/bbl of 2P reserves, with further optionality for its contingent resource, worth multiple times the current share price on a risked basis. Hurricane has US$230mm in debt in the form of a convertible bond; however, this is not repayable until 2022, giving the company plenty of time to refinance. Hurricane’s unrestricted cash at 1st April was US$152mm.
Hurricane Energy
Changing of the Guard
CEO and other board members changing; technical review being undertaken
Hurricane announced today that Robert Trice, CEO and founder will leave Hurricane by mutual consent. For now, Beverley Smith has been installed as interim CEO, through a transition period, with a permanent replacement to be chosen later. The other board changes are Richard Chaffe’s role as acting CFO being made permanent and Roy Kelly stepping down as a non-executive director to be replaced by Dr. Alan Parsley, as major shareholder Kerogen’s nominee. Hurricane also announced that it would be forming a Technical Committee to formalise management oversight, and plans to release an updated CPR no later than end Q1’20. Following Hurricane’s last operational update shares fell 45%; however, today’s update does not contain any incremental negative technical or operational information. Current production has actually increased to 12kbbl/d from 10.3kbbl/d at the last update.
Management changes to suit the company’s current situation
The exit of CEO Robert Trice follows a somewhat disappointing recent operational performance, but this came after successfully executing a pioneering development over a period of weak oil prices in a harsh environment, achieving first production on time and on budget. Given some of the unexpected issues since then, and the shift of the company towards development and production optimisation, we believe a refreshed management team makes sense. Bringing in executives such as Beverley Smith with vast production development leadership experience, as well as a new non-executive with 50 years of industry experience, will allow some of the issues to be examined under a new lens, in our view.
New Technical Committee: taking a prudent approach
The role of the Committee is to consider, and where appropriate peer-review, the critical technical judgements being made by management in formulating business and operational plans for the Company; and to provide oversight on reporting of Critical Technical Assessments, Reserves and Resources and Technical Function Organisation and Skills. The Committee will review all the information available and open its mind up to a full range of geological and reservoir models. The company will take a more prudent approach, including the possibility of a shallower oil water contact, even though this is seen as low probability. A shallower oil water contact could mean lower reserves and a higher chance of water break through from the aquifer. It is positive that production has ramped up slightly from the last update and the water cut has remained low and stable at 8%. Depending on the initial evaluation of data, it is still possible that an intervention on the 7Z well is carried out this year.
Large amount of upside based on the Lancaster EPS alone
We had already cut our risked NAV to 45p/sh (US$35/bbl Brent in 2020 and US$60/bbl long term; 10% discount rate) to factor in the lower product
Added this morning on the drop. Kerogen will drive shareholder value here. "Colin Smith, analyst at Panmure Gordon, said Hurricane's largest shareholder, the Hong Kong-based private equity group Kerogen, appeared to be strengthening its control over the company and its performance as it was also announced on Monday that it would replace its nominated non-executive director on Hurricane's board, Roy Kelly, with Alan Parsley, a geologist with more than 50 years' experience and a former global head of exploration at Royal Dutch Shell "
Insto’s had downgraded SIG due to poor management, strategy and concerns over liquidity. Major change in sentiment here post this update.
Perhaps SIG have gone this route because it’s at a premium better for existing shareholders than a standard placing.
Shows real intent and strategic change in direction from the new CEO. Market will like it IMHO. No prisoners this guy.
We know that various broker notes had been concerned about a potential liquidity issue with the business. This transaction erases all of that. Positive. Let’s see the detail.
SIG's largest investors are understood to have been briefed on the proposed transaction.
Looks like a win win for all concerned.
https://news.sky.com/story/coronavirus-sig-constructs-stake-sale-to-buyout-firm-11996495
Agree it would make no sense to dilute shareholders via an equity raise when there are existing bank facilities and access to government loans.
SIG are in an enviable position with very low debt. I’m sure the banks would be their first port of call if necessary.