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Was just taking a casual look through DKL website as not been on for a while and noticed that the shareholder analysis (updated Feb 21) shows 50% on DKL share capital is now held either with the board or institutional holders – up from around 30% if I remember rightly from couple of years ago.
Overall though I think this is a good sign – heavily invested board and major shareholders will certainly keep objectives aligned with u retail investors – hopefully.
Others think the same?
My only slight doubt/something to keep monitoring (others correct me if over thinking this) - im trying to work out how this has come about (30% - 50% is significant) – obviously purchasing the full palm oil operation, and buying the cashew facility and then increasing exposure further will of impacted this – if I recall correctly these were all purchases of operations that Youval and others had involvement / ownership.
Just need to monitor the purchase of operations whereby it’s effectively Dekel purchasing assets off the DKL owners – the net result is cash out of DKL into owners pockets - but ultimate ownership still resides with the same individuals – need to be sure this is being done appropriately.
Hopefully that makes sense - Am I unduly concerned? Appreciate any views
I think the certification will be a huge plus for Dekel, especially if we ramp up exporting CPO.
I do not know if it is case already but I can see Europe really focusing on only procuring from suppliers who have the accreditation - and given our proximity to Europe compared to Malaysia / Indonesia I think this is potential a significant export market opportunity when the time is right
ha ha - yes hereandnow - I definitely agree with you that this is great news! Dekel have been working on this a long time and it is not a straightforward process so to finally get this over the line would be fantastic!
Who’s been hysterical or acting ? Ive simply made the point that I disagree with the principle of how this has been done and the narrative that it is some great show of confidence.
This board is to voice people’s opinions and challenge others views – this is not the first time PV takes an overtly aggressive stance to anyone somehow disagreeing with his view – either people are deemed hysterical, moaning, ill informed, sarcastic etc etc
Ill decide whether I stay invested in DKL thanks – perhaps if you can’t handle the nature of the discussion on this board you find somewhere else to go.
If you want to disagree with me fine – just try to do it in a civilised manner
Sorry hearandnow but I do not agree – this isn’t shares in lieu of fees, this is shares being issued in lieu of a salary – its different (although I agree with FK that we should not consistently distribute shares in replacement of fees)
The amount doesn’t matter, the principle is wrong and the narrative doesn’t make sense.
Ill give you an example
Christian Sewing (Deutsche Bank), relatively new CEO – troubled bank for many years! In a show of faith in his turnaround strategy he has committed to spending 15% of his monthly salary on deutsche shares until the end of 2022 – now there is a show of confidence – none of this issue of shares to him in lieu of salary nonsense!
Can somebody who thinks this is good explain why it has therefore been done in this manner? If it’s a show of confidence why not take the salary and commit to spending 100% of it on shares – if you can explain practically why this way was necessary then fine please inform – all I see in the method is dilution on our part – no benefit at all.
This is directors taking advantage, messaged as some sort of great show of confidence – the amount is irrelevant – the principle is wrong and in my view we should be annoyed about this
I have to say I am not a fan of this practice at all – effectively this is all of us ordinary shareholders paying this salary in the form of diluting our own share holding.
I do not see why this has to be done in this manner at all, it is benefitting nobody in all honesty other than Aristide -
Salary and share options, distribution etc should be kept separate.
If Aristide wanted to put his whole salary into Dekel shares he could of bought them each month, annually on the open market like the rest of us - not difficult at all and would show genuine confidence, and no dilution - in fact genuine benefit as the share price would go up - what is the need to do it this way?
I’m sorry but I do not see this as any great show of confidence – its directors lining their own pockets at our expense – sorry but that is what it is and we should not encourage this practice
I think the monthly issue of production numbers was a response to the COVID situation, a desire to be transparent and provide some calm to any speculation regarding how hard DKL operations had been hit - this in my view was good and welcome move and achieved its objective
Going forward i expect this will cease - monthly updates is not required and would be too variable to be that meaningful - i expect quarterly would suffice, id be happy with that anyhow.
hi Swoop - yes id agree with that analysis, and probably challenge that that it is conservative - I think given current pricing environment we should outperform 2017 comfortably.
A pe of 9 is very conservative, typically organisations in this space are priced at a PE of around 16/17 (which would mean a price of circa 17p) and if we can convince the market we are a growth stock you would hope for a premium on that.
i'd like to think we had a shot at 20p - we need to keep the story strong, keep the quarterly updates and delivery on-track (don't want return to one strong quarter followed by a poor quarter) and maintain the momentum.
hi FK - these days it is all algorithms that move the SP and it is based on more than just the number of buys and sells - and in truth ive seen dekel fall 10% + on the back of a few £00 worth of sells.
results, price of CPO, macro factors such as some of the outlined below by PV - will all be factored in and on top of that there is generally something factored in around momentum of a stock.
the day to day movemets never make a great deal of sense - think we are though seeing a solid biull case forming on a number of fronts now so long may it continue - I know we have all been here before but the longer DKL keep producing the results the more people will by into the story we bought into 5 years ago!
that's an interesting read - the suggestion seems to be that going into next year IOI's financial performance will hold up due to the CPO price - production though will be restricted due to ongoing operational challenges from Covid, gov't policy on foreign workers an fact that production out to middle of Q1 next year will be low (due to it being low season obv).
For DKL this is a bit of a perfect storm - DKL operations have not been impacted too badly, demand is coming back strongly and above scenarios should all keep the CPO price high well into next year!
if that all happens and we execute on Cashew business we could be smiling!
I don't think high season is that rigidly defined tbh - seems to be it starts roughly around middle of Q1, ends at back end of Q2 and peaks somewhere in the middle - April, May.
In fairness to DKL at moment I have to say I think they are doing what we'd hope they would do - for past couple of qtrs now results seem solid, there are regular updates as promised and progress on cashew project has kept to plan (other than a perfectly reasonable delay on back of Covid) - alongside the much improved CPO price can't ask for much more IMO.
For any new DKL buyers or those new to the board - if you notice there are some of us on here than can occasionally be viewed as glass half empty / always skeptical it is simply because we have been here a long time with high expectations and ambitions that have never quite come through (often with some frustration around the DKL leadership!)
on the plus side you get an honest assessment on this board from individuals who I think seem to really know their stuff!
DKL looking good (and very cheap!) at the moment so ill try and stay positive - a nice Q4 would help! - maybe the dividend will return! - (ok I should calm down again!!)
hi Picklingvinegar
I picked it up from Rivaldo's post below which outlined - in 12 months' time, with the cashew plant up to speed, annualised group revenues should be up to €50m, with high single-digit EBITDA margins, i.e say €4m-€4.5m.
I was assuming this was a reference to high single digits margin % - this would be 9% at best and 9% of E50M would be E4.5m as per Rivaldo's post
however you may be correct and the high single digit margin references the absolute margin as opposed to margin % - this would make a lot more sense if we are expecting circa E9m in EBITDA - and would make sense with addition of Cashew business!
I think you may of solved it Picklingvinegar - I must learn not to overcomplicate things! I think that must be it so do feel more confident now - thanks PV
Thanks Cat - ill maybe look in some more detail also if get time.
It doesn't stack up though does it? - Palm oil operation is relatively straight forward - bunch of fixed costs with the key drivers of margin being
- sale price of palm oil and other products
- cost price we need to give to smallholders
- EBITDA will then also be influenced by Interest, tax and depreciation charges
based on what we are told for next year the top 2 should improve to support margin (ill ignore fact that cashew business should help even further) - so it can only be a significant uplift in the interest, tax and depreciation that causes a huge drop in margin/EBITDA - which I do not buy!
unless some other costs have significantly increased to reduce margin- Director salaries etc!!
anyhow - ill leave it there - it doesn't add up though (ill perhaps message DKL and see if get a response) - we should be doing way better than E4.5m EBITDA.
hi FK - increased production should improve margin really, fixed costs would be a lower % of revenue and I would expect the margin on FFBs to be fairly standard i.e. whatever the spot price is we pay local smallholders less a premium (if anything increased volumes may also help margin here too if DKL has any sort of volume discount tiering in place)
if my analysis is right then it should be put to Lincoln for an explanation if anyone has a good relationship and can elicit a response.
Thanks Rugs - that does though mean issue remains with the numbers, CPO prices for next year I think are forecast to be higher than both of those numbers (currently are above/or around E680)
I do not get how the EBITDA remains at E4.5m (same as 2017) even after significant improvement to palm oil operations and onboard of Cashew business.
For that to be case (assuming I am correct) something must have materially impacted margin.
ok ignore that last one - calculation errors, its not that extreme
however - base on the same metrics as 2016/17 we should have EBITDA of circa £7.5m - which is still significantly above the predicted £4.5 and not allowing for the fact that Cashews have better margin?
it could be the CPO price was so much better in 2016/17 - not sure if that correct or not.
PS - also based on metrics of 2016/17 profit would be £2.5m - so a low PE of 10 would mean over a doubling of current price! (not quite a nice as the error calculation - I liked that version!)