Member Info for dun48

Yes StarBright you are right. The real problem I believe, is that the tax credits are linked to Biden's IRA. If Trump is elected he may want to reverse some of the IRA incentives, like the tax credits (ITCs). There is more on this on globalxetfs.com/u-s-election-preview-infrastructure-development-is-something-both-sides-can-agree-on/. GSF must want to complete in 2024, before the new government (whichever) arrives in 2025, to be sure of these ITCs. Their value is between £46 and £61 million. 23/24 dividends paid was £36.4 million. It's significant

Based on past experience, the return from energised new build comes in the following year. So 23/24 average was 311.5 mw, 24/25 should be 421 mw and 25/26 might be 753mw. Based on EBIT for 23/24 of £20.2 million, this translates into £27 million for 24/25 to be divided by more shares (£27 million more issued las year), then £48.8 million in 25/26, assuming prices maintained. So 24/25 is going to be difficult. 25/26 should see the US operation working well, but interest on the loans will have to be paid. Hopefully the Government subsidy will be used to pay down part of the loan, keeping interest expense to a minimum.

If only 4p is paid in 24/25, this is a yield of over 6%, if 5p is paid, that increases to just below 8%. More in line with other renewables currently

JG

It's complicated. The note 21 in 2023 accounts lists the borrowings, interest rate and when due. The $750 million borrowed in 2023, was largely used to pay off $450 million loan due 2027. There is another loan, $625 million due 2026. So it looks like they intend paying off the 2027 loan as it carries a higher rate of interest (6.5% v 4.875%). However the $450 million is partly guaranteed by Energean Egypt, so may be linked to the Egypt gas field and the clearing of loans linked to the assets to be sold. After the $450 million is paid, borrowings (through bonds issued) will be $2.675 billion, with $625 million to be refinanced in 2026. So that, plus the fact that they will return $200 million in special dividend, possibly early 2025, suggests no major capex needed till later 2025 or 2026. Four loans were taken out in 2021, totalling $2.5 billion. These were linked to Israel and borrowed there. Due dates are between 2026 and 2031. The recent $750 million was also taken out there, with due date 2033. The Company will have planned when these bonds will be paid-off in full, as opposed to be re-financed by rolling them over.

But the first test well results for Morocco are due later this year. The Israeli loans were taken out in 2021 and it has taken until 2024 to ramp up production. This gives us some idea of the capital requirements and the gap between borrowing and full production. I doubt if the requirements will be fully established until next year when test wells are completed. Energean will probably want to use the same borrowing model, if Morocco agrees.

But until the size of the expected reserves are known, and how the fields will be developed and exploited, Energean basically has the Israeli fields, in a high risk region.

It has sea exploitation expertise which Sound Energy doesn't have. But the Sound Energy RNS dated 17th June indicates how it will be involved in land gas development and exploitation in Morocco, and a look at the chat board indicates how share pricing is difficult.

JG

Although Energean have talked about a special dividend, it's really a return of capital, as the asset base is being reduced by the value of the asset sale. With the number of shares remaining the same, the price after ex dividend date, should fall, given the same number of shares, but reduced assets. (reduced capitalisation).

One scenario for the future, given that Morocco will be big and more similar to Israel find, is the requirement for at least $750 million capex next year for development. (Similar to $750 million for Israel last year). $450 million from borrowing and $350million from share issue. My guess would be a secondary listing on Moroccan stock exchange, and wouldn't be surprised if this was stipulated by Moroccan Government. There was a programme on TV some months ago showing investment interest there.

Debt was $3.2 billion end 2023, net debt was $2.8bn. Interest paid out was $268 million. So interest rate was about 8.5%, inline with the bond they issued. With $450 million to pay off debt, that leaves borrowings still at $2.75 bn. So interest should fall to about $233 million.

I am assuming Jeffries has added any capex costs spent on the fields sold, to their acquisition costs. Additionally they will have factored in increased cash flows as the Italian field is due to come on stream this summer, I seem to remember.

NAV usually includes forward looking cash flows, alongside additional costs incurred in the past, using lifespan of the assets (capex incurred). Energean said that they were avoiding well closure costs (possibly Egypt?)

Dividends paid out in 2023 was $213 million.

I think Energean said they wanted to both develop and exploit gas fields. Anchois will go through development stage soon, if the first wells hit targets expected. So more borrowing for that to come, or share issues. The interest rate they pay will move with level of borrowings. So paying off some debt now allows them to replace it at similar interest rates. If they need more than $450 million, rates would probably increase. Hence possibility of share issue. hence dividend per share could drop.

PP

Volume and revenue will drop by about a quarter. The number of shares stays the same as there is to be a special dividend, not a return of capital. So the answer is that it all depends on the cost savings coming through, which it says there will be, plus reduction in interest costs on debt paid off. I think there will be high capex costs for Anchois, and savings will be used to cover this. So I expect dividends to be reduced initially until volumes are ramped back up. At which point who knows.

As Israel/Gaza peace deal looks more likely, shorters will bring price down as much as possible , before getting out. They may well have CFDs in place for large quantities at 1125p. If Agreement reached, then watch price shoot up. Tomorrow afternoon when shorts closed for the weekend (in case agreement is reached over the weekend), price will again rise.

I'm still a lth.

In 2021 SSP issued £465m new shares at 184p, I believe largely taken up by institutions, to save the Company from collapse during Covid.

They must be selling at a loss, given today's price. SSP senior management are being told to get out. Anybody can grow any business. You don't pay off debt from higher sales, but rather higher profits. And that has to be the aim now. Another pandemic tomorrow would reduce the value of SSP to zero. They couldn't borrow more and they couldn't issue more shares. Management has no proper plan, other than to move into more growth markets, no matter the geo-political risk. Acquisitions should be based on more than "growth market". They must fit criteria, developed to ensure an extension of the company's objectives, as regards branded restaurants, standardised meals, global or regional, to allow economies of scale as regards common food ingredients, standardised equipment to make the meals, cooking instructions for staff, training, and service procedures. When successful, franchisees can be had at smaller local airports, at nil investment cost. But you can only do this if the restaurant brand has value. All IT, Finance and HR systems will be either global or regional. With Control systems built in. Family or other restaurants in developing countries will probably have the owner or manager hiring his own relatives. Control systems won't be needed. Not the case when a large Company buys them, where food ingredients will disappear, free meals given to friends, cash disappear from tills etc.

So what is the SSP strategy? Do they have the expertise to run businesses in Indonesia and new Zealand. Are they building restaurant brands of value or not? What is their competitive advantage that they put into the acquired business? How much additional profit will that generate? Acquiring businesses in "growth markets" is not a strategy. We need more information from management to show that they have a strategy, and that there is a clear purpose, linked to each acquisition. I can sell 20 Rolls Royces in 24 hours. No problem. But I would lose £s thousands doing it.

Im a holder, but dismayed that the management is continuing to look at growth through acquisition, at the same time as having to update existing premises with borrowing still high, and margin has fallen, from an already unacceptably low level

I am retired from a ftse 250 consumer goods company. It has found that localisation (focus on local brands) carries with it high marketing costs, a lack of economies of scale linked to Purchasing and production, HR, financial and IT systems. Economies come from regionalisation. So acquisitions must extend existing regions and fit into them, not willy-nilly across the world.

Senior management's focus now should be on improving the existing portfolio of eateries, improved menus and higher prices and margins. Reducing debt should come before tiny dividends, an increased share price before chasing higher sales volumes through acquisition. It's about senior management focus on regional meals and brands to allow some economies of scale, to reduce costs and increase margins ---or should be. get rid of complexity, don't create more.

GSF would do well to set out its buying process.

I suspect the cash was a payment to acquire the 49% of Mucklaigh, in order to move from project plan to land buying, permissions and construction. The monies will have been paid to Grid System Services (Low Carbon and Irish Independent Developers), based on early phase DCFs. Once the construction phase is ongoing, the DCFs and costs will be

refined and GSF will buy the remaining 51% . The cash will pay the builders (Irish Independent Developers) and Low Carbon for their work done. The second phase (51%) will be in shares to Low Carbon who maintain their interest in GSF. These are dilutive. So the 9,700,000 shares to buy the Porterstown and KIlmannock will dilute the share price by 1.3 to 1.4p. Which is roughly yesterday's drop. I assume that all these shares will have gone to Grid Systems Services as there is still construction work to be done and batteries purchased and installed. Some could be sold to pay the builders, but I suspect Low Carbon will keep them if they see more benefit from holding them long term. That does depend on prices chargeable and battery usage. But Ireland and the EU seem to be more reliable than the UK for anything linked to renewables and sticking to plans. As Alibaba says, Ireland is the right place for investment

TT

Telfer AISC costs are way too high as per page 29. It's loss-making.

From Financial News last December "Rio has pulled the start trigger on copper/gold mine, Winu, 75 miles from Telfer".

and in same article

"Newmont boss Tom Palmer hosed down speculation that Telfer/Havieron would soon be up for sale, describing them as valuable assets"

There is a difference in the Newmont RNS, between "expects" to divest Havieron and "seeking" to divest Telfer. The first, to me means discussions about Havieron are progressing positively. But seeks to divest to me means an indication that it wants to, but hasn't found a party to start discussions.

Shaun's RNS is about the attractiveness of Havieron.

So possibly Rio want Havieron, but not Telfer

Look what has happened to Bodycote share price today when they announced share buy back. C'mon SSP, your turn

Hi Tibbs

I find almost the whole of the financial sector, with its focus purely on making money, a waste of human talent and effort, that could better be spent on dealing with the earth's problems and making a better life for everyone.

Of the three schools of thought in the article, I support the third, which basically says that all the resources are finite, which poses a problem for the future, especially as population keeps growing. Common sense suggests that if we don't all get together and plan a future, there will be an all out battle over dwindling resources.

What's missing from this is that FTSE 100 companies, bought back £57 billion plus of shares in 2023.

The Chancellor wants growth in the Economy, which comes from investment. If that £57 billion had been ploughed back into investment, instead of buying shares (which increases eps, as well as share prices which supports short sellers), then the Chancellor would get his wish.

ORR report out and they have shot themselves in the foot, complaining of prices being 10% higher than elsewhere. 14% of retail sales going in rent to rail network/stations. The average across UK is about 7%. So large % of higher price is being paid to network rail/stations in rent, not being taken by retailers as profit.

If they were to try to force prices down, rents would decline with even less for rail network/stations, and demand for higher subsidies to compensate, or higher rail ticket prices.

Rollins, the main US competitor, last night announced 3rd quarter sales up 15.2%, margins 21% and with EPS up 18.2% compared to same quarter 2022. No signs of the slowdown that Rentokil management talked about.

Superficially looks like the Rentokil management in US have a lot to do to turn Terminix around, and Board here are not getting the correct information

Several things

1. EPS at bottom of range (maybe)

2.'24 forecast reduced bottom end to £305 million (v this year £280 million)

3. High capex suggests focus on growth of sales revenue, when market wants focus on debt reduction and profits to allow share buyback (share issue during Covid resulted in 50% more shares and we don't know if management promised temporary increase).

4. GLG increased short on 21st and again on 24th September (see shorttracker). Will have to wait to see accounts in terms of debt reduction/ forex and eps

5. P/E still about 30 and GLG seem to have the bit between their teeth and could be aiming for 200p, but I am holding as expect better forex resulting in better eps. And hope debt has been reduced further and share buy-back will be called.

Hi goldgnome
There is no history of China wanting world dominance. It's trading prowess pre-dates the Romans, extending throughout Asia and west to Europe. If you read Menzies book 1421, you will see it appears they went round Africa and possibly further, with a view to trade world-wide. Probably as you say, to acquire the food and materials required by a large and growing population. But China was a proud, orderly and inventive nation. Until the Europeans arrived in the 19th century, with all their weaponry and forced concessions which started as trading ports but then expanded to transferring their factories, religious and political practices. Christian converts often won property disputes over local peasants as local officials were either bribed or persuaded not to upset foreign powers. This led to the breakdown of Chinese society and the Boxer rebellion as depicted in the film 55 days at Peking. The weak Chinese Government disowned the Boxers but secretly backed them. The Chinese were shamed by the Western Governments, which included the US, and have probably been years planning to how regain the prominence in the world they once had. The US as you say, handed this to them on a plate when Nixon agreed that the two countries should be allowed to trade. The Americans probably viewed the Chinese as backward, and saw only the agreement as one-way trade. But the Chinese knew that greed had surpassed 19th century Christian values and played the West. They were years behind technically, but made the transfer of IP a pre-requisite to manufacturing locally. They built their exports quickly by devaluing their currency, but got away with it by buying US debt. They still send their people to universities in the West, many more now as post-grads, to determine what we are working on for the future. All will be transmitted back to China, but our Government is happy as it depends on China for much university funding. They convinced the west that they would move to the same kind of democratic system, but all the above development, had been centrally planned. Now China has caught up, it has proved that central planning, or autocracy, is the correct system. South America, most of Africa and even part of South-east Asia consist of former colonies, and as such sent raw materials back to the colonial powers. China will not colonise these countries, but will want to ensure that they get priority for these materials. They will give a fair price and will adapt to local requirements to do so. To achieve that, they will have to be as strong or stronger than the West militarily, have to offer a different currency from a different economic system, not inflict their own laws, but rather accept those that exist, and certainly not propound democracy.
Personally I believe that they need, and have planned for a gold-backed currency.

two interesting articles in today's Times, indirectly linked to the price of gold.
The first entitled "alliance of Autocracies leaves US out in the cold" and the second "Chinese bribed Nigerian militants for access to mineral reserves" which are smuggled out.
The first refers to the Arab world coming together with Iran (an ally of Russia), the second shows China exploiting other countries' wealth, whilst keeping the politicians happy.
So the first is about autocracies and self-interest/ self-preservation. The second about trade, bribery and corruption, in short self -interest trumps legislation. Timothy Snyder interview 19th February on Putin gives you the autocrat's thinking, as well as fear of the law and order in the West. But he misses the Chinese argument that Western laws are made for the good of the people, but then exceptions made which negates them. So Free Trade is circumvented by patents, copyright, import duties and controls etc. Laws on monopolies and monopoly pricing, but no laws on restricting supply, and exceptions for brands and packaging etc, laws on taxation, riddled with laws covering exemptions and get-outs for those who lobby. The one thing the exemptions have in common is to preserve and protect the status quo. China believes it has to ignore the these laws, and has done so. Now it wants to break the US dollar, which has allowed the US to borrow and spend beyond its own means. China has persuaded UAE and now Brazil to accept Chinese currency for their exports. It's likely that it has promised two things. Stability in volumes and prices for a certain time. And guaranteed the strength of the Chinese currency. The first appeals to a country that has seen fluctuating volumes and prices thanks to "Free trade". The second had to be done, given the Chinese grew their Economy by depreciating its currency. It can only guarantee its currency if it is underpinned. probably by gold It really might have "promised to pay the bearer".
So it is amassing gold, through its own mines, Russia's, with Nigeria being an illegal example, though the article suggests that there are others in Africa as it has sought the help of Blackwater Security's Erik Prince to protect Chinese companies in Africa.