Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Agreed but I think they mean operating cash flow minus ( pension contributions + interest on debt). They then talk about free cash flow being used to reduce debt and maybe some dividends . They seem to think profits will fall back this coming year
Profits and FCF in line with expectations, but reinstating a sensible dividend and announcing the refinancing is massive. . EBITDA of £170m is bigger than I expected even. Very happy overall
Also love not hearing about "tougher comparables" for H2. That's a real growth mindset.
Green you're being a bit too pessimistic there. See m y previous post.
The Feb 18th RNS said debt/ebitda < 2 and they've already paid off £97m with FCF this year so that's the lowest number possible.
That's what I can see anyway
I tend to agree that inflation is arriving. The FED in the US straight up said they want higher than 3% inflation to bring up the average from the past decade. The covid response worldwide has been "might as well print money and throw it into the economy until inflation arrives". I expect 3-5% in the short-medium term. ..... with 10 year yields "spiking" at 1.7% in the US , it seems as though there is a long way to go in bond yields rising and the value of growth stock decreasing as the discount rate rises on their future cash flows.
As more of it's value lies in shorter term cash flows-i.e. "value stock", PFD's value is less affected by a rise in discount rates/bond yields and the share price could even benefit from a technical rise as money moves away from growth and towards value stocks. That's my macro view anyway.
For PFD's business I just hope it can raise prices faster than inflation.
Re: dividends, there's 0 chance of one being given out next week, as they've spent their cash on the debt repayments already. I just hope they state a high payout policy for the next year, with some sensible level of debt repayments.
Re: buyback scepticism, For example I'd be delighted for the s.p. to drop to 5p for the next year. PFD could buy back the whole company with their free cash flow, except for me not selling, and I'd happily take the £10,000 per share dividend the year after!
......so yeah I'm in favour of buybacks if the s.p. is "low", dividends when it's "high".
Fingers crossed we see a nice set of results anyway
Hi all
I want to try get some estimates in before results, to try make a plan for the share price reaction. Bear with me.
From 18th Feb, RNS: £190m notes repaid - £93m cash at begnning of year = £97m free cash flow (FCF) 2020/21 in the worst case scenario where they have £0 cash left on April 3rd, and made £0 cash between Feb 18th and April 3rd.
FCF for H1 was £30m, so that would mean £67m in H2, (same as lasts year's H2 with no lockdown)....seems unlikely.
With long term debt at £311m after the £190m repayment this year,
Net debt/EBITDA < 2.0 (From RNS) implies at least 155.5 EBITDA, similar to last year.
On the other hand, if cash generation was consistent, and they made £67m in the first 3/4 of H2, then they could reasonably have made another 22m in the last 1/4 from Feb 18th to April 3rd.
-> meaning FCF of 97+22 = £119m for the year . ....much higher than Kalamumma's £103m FCF estimate.
For £110m FCF , a P/E ratio of 12, which PFD, Kroger and sprouts farmers market all have at the moment, gives a PFD share price of about 150p. That would be nice!
What to do with it:
For now all cash is going into debt repayment, makes sense. But after this year with Net debt/ FCF ~ 3 and
Net debt/Market cap ~0.35 it seems like there will be some room to maneuver. Especially if there is debt refinancing. As well as the share price, my decision to sell or hold will depend on the managements strategy for using the cash going forward.
With big pension contributions and interest charges every year, I understand the need to keep cash flows high for the company, not just per share. However if the share price remains at the current level it represents an excellent buyback opportunity. With just the next years FCF you could buy back 10% of the company! My main concern is that management will waste the money on expensive/ineffective advertising or trying to buy expensive companies offering < 5% FCF yields. (70% of M&As fail!) .
In short, after taking out whatever capex is needed to sustain FCF at ~ £70m - £80m per year, I would like to see 20-30% FCF used to repay debt, and 70-80% of FCF returned to shareholders, split between dividends and buybacks depending on the share price.
What do ye think?
"once it's debt free" is the problem there. That's why it makes more sense to look at free cash flow than ebitda here. Interest is significant. I also think you should be comparing free cash flow to enterprise value rather than market cap kalamumma. That cash is going to pay back debt, not into shareholders pockets or being reinvested.
Having said that, Ev/fcf multiples still look very good at these levels. On 65m fcf in 2019, I agree with your assessment of 70m+(+) for 2020 and beyond.
I think this is a good indicator for eating at home levels. The level in April was double-triple the normal. Interest now is in the low 40's compared to high 30's normally. -so a little bit more but pretty much back to normal eating habits.
https://trends.google.com/trends/explore?date=today%205-y&geo=GB&q=recipe
You're right that does seem unlikely. The vanguard and investec figures were just 1bn but there must be some british ftse fund holding a lot. I do imagine ftse 100 indexing is a lot more popular though so I doubt the distribution is even.
Happy to have narrowed it to between 0.1 and 10% ha!
https://youtu.be/P_W2qGprPtg
Do people here think PFD will benefit from increased attention, liquidity or will there be no effect once it is included in the ftse 250?
Searching for ftse 250 index funds there only seems to be ~1 billion in each of the passive index funds from vanguard and investec, vs a 500 billion market cap for the ftse250. Even of there's maybe 5 billion in passive money out there, that's 1% of each company. PFD is < 1/2 the average market cap in the ftse so looks like passive money is going to be looking to buy max 0.5% of the company. Say 0.1% minimum. ........ doesn't seem like much to move the share price on its own eh?