Sapan Gai, CCO at Sovereign Metals, discusses their superior graphite test results. Watch the video here.
@Terry
I’ve also been in CPI a long time & retrospectively I shouldn’t have invested then.
However it’s a mistake to reflect too much on the past but what is important with CPI is where we are now & where we are going.
To me a company that will within 6 months have virtually no net debt, has an income of £3b + with a considerable amount coming from renewals, is in an area largely unaffected by recession, has built in inflation increases for the majority of its contracts, an income that is growing whilst costs are reducing & should (& the sooner the better) restart dividends is an attractive proposition especially at the current price.
Voli I seem to remember in the last update (or the one before that) JL said management is too top heavy for the reduced size of company & they will slim down & also that once disposal costs are stripped out profit is there so that infers that profit is minimal or negative if you include one off costs
Much better presentation than previous updates.
Nothing earth shattering but with net debt near to nil by H/Y & increased revenue this is moving from a recovery share to a growth share & as such should attract additional investors
If CPI is making (as they state) somewhere between 5% & 10% profit margin (presumably this is meant to reflect all costs involved) on a T/O of £3b+ ( even allowing for some old contracts that don’t meet this criteria) this would indicate (once all one offs re disposals/restructuring are out of the way) profits should be £150m +.
At this level the company should be worth at least 8X profit i.e. £1.2b
That’s what I’m hanging on for but tomorrow should give us an indication if this is realistic or not.
I was hoping for a gradual increase in SP prior to the Trading Statement not a bailout by investors. Let’s just hope that patience pays off & we get a lift after the TS. My worry would be if some of the IIs get fed up & start to dispose of substantial quantities of stock.
Let’s hope that we get a statement re dividends restarting even it is generalised i.e ‘we intend to start dividends in second half of 2023 subject to market conditions’
Although a share buy back might be a better use of funds I think it needs a restarting of dividends to move the share price.
CPI do need to act to drive up the SP so come on SM let’s have a decent positive statement with some clear figures showing genuine trading profit, increased T/O, improving margins & a statement re dividends/buy backs.
T/O should increase simply by the index linking on contracts & hopefully increased sales.
I’m getting nervous re the update.
Usually the wording isn’t very positive & the way markets are now this could have a negative effect.
Hopefully I’m wrong but I’m worried that I may still be waiting for the breakout this time next year.
Provided CPI & JL keep doing what they say eventually all will come good & to be fair JL has delivered pretty well.
My main concern is that I want to see positive cash flow excluding sales & increased T/O.
If costs continue to reduce, income increases, debt is repaid then eventually the market will wake up to the fact that this is a cracking company
Go CPI Hopefully you are right about 2023 being the year but I suspect SM was quoting 2024 partly out of caution & partly because until Y/E 2023 we won’t get a clear set of accounts without being muddied by Capital disposals.
SM said last year that they were very conscious of Shareholders interest & would be issuing as many positive statements as possible including contract wins etc.
This just hasn’t happened.
I only hope this Trading Statement is going to be very positive & that the Pay360 deal has completed by then as otherwise I can see this drifting further.
If the Turnaround really is completed CPI do need urgently to do something positive for the Shareholders who do after all own the company.
As said before
Dividends
Share buybacks
Genuine trading profit
Clear statement showing nil debt ( or cash in hand ready to repay debt when it matures). Personally even if there is a small penalty to repaying debt early I would like to see it cleared.
Possibly some strategic acquisitions but not through borrowing
Please let’s have as many of the above as possible
@Capitaliser
I agree that we now need to start a strategy that is going to show some results for very patient & long suffering shareholders & as you say now the company is on a slid footing perhaps a change of direction is needed
Not the run up I was looking for prior to. 13/12 Trading Statement
Also no news as yet of cash received re Pay360.
I’m somewhat anxious as previous trading statements haven’t had great presentation & result in drops.
I do hope we’re not going back on hold and have to wait for 2024 if so I may well move on.