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That’s true if we knew for sure that a mine is guaranteed at some point. Then yes of course you’d rather have a larger percentage. But it’s naive to not at least acknowledge that if Ascendant defaults on the put, which means Sprott have decided not to stump up despite have millions in sunk cost already, then there is a good chance that the whole project is scrapped and no more cash ever materialises.
For what it’s worth, I don’t think that’s what will happen but to not acknowledge it as a possibility is just silly.
To be honest thinker I wouldn’t expect it to due to the obvious doubt in the market about the materialisation of the put option. Today’s price is quite finely balanced. If you don’t think the put option will happen then it’s a decent selling opportunity. If you think the put money is imminent then it’s a great buying opportunity.
JVs investment that should say
Luca mining has doubled in the last 5 weeks such that it now represents 20%+ profits on Jobs investment and that doesn’t include the warrants.
If we sold that and realised the 5-6m from the put option we’d have a 50%+ cash premium to today’s market cap by year end.
Then add whatever value you like to the other equity holdings, ideon stake, golden sun and the potential for a positive negotiation with the Portuguese government.
Really interesting q&a session at the end there. Particularly around on shoring and near shoring. This a long term growth driver for them for which they couldn’t be better placed. They do good business in all developed economies except China where their business is negligible. By all accounts the next few years will see a lot of concrete being poured in the USA, Europe and Australia that used to be destined for China.
A couple of days ago this was trading at 8x cash flows with a rock solid balance sheet, proven returns to shareholders and the structural growth driver mentioned above.
Looks like a great entry point for a company making about 15m at last count with a rock solid balance sheet.
On a qualitative note I’d also say that this management team has shown them to be very cautious custodians of capital over the past few years. So if they are spending 17m to increase production in order to meet demand, I’d say there’s a very good chance that demand is indeed real and those 15m profits are set to grow from here.
This morning looked like more good news to me. Presumably that money will go towards improving net debt without sacrificing any material profits.
Market doesn’t agree. Hopefully that’ll change.
I’m surprised by the muted market response here. Fund managers pretty much across the board have had outflows for around two years now.
Not only did they manage minor inflows in their H1 results, they’ve now added over 10% in one fell swoop. Talk about bucking the trend.
I make it 19m look through earnings after making the appropriate adjustments to the cash flow statement which is handily the same as net profit on the income statement. In a reasonable market I think that trades at 15x easily. Especially when you consider their track record for organic and acquisitive growth.
Sprinkle falling interest rates on top and it could be even more.
Whoops! Meant 4% buyback obviously
So revenue slightly down, margins slightly up.
13m conservative estimate of post tax profits gives a 10x FCF multiple
Strong brand identity and retailer relationships
And now they are returning 9% to shareholders via a 5% dividend and a 4% dividend (according to broker note) at today’s market cap
All good stuff if you ask me
Hi test,
Yes agreed. I’m saying that it seems as though the rhs on the 5th may have been a mistake as it it has Harwood buying before then selling two days later.
Although if that was the case I’d expect them to have published a correction by now.
Do we think that the holdings RNS from a couple of days ago was a mistake? Would be very odd if Harwood bought 0.3% to then sell 0.7% almost immediately.
Right now you can work an in the market bid at 1001p a share. If that gets filled it represents a 23.5m market cap.
Unless something catastrophic has happened at Shire since the market was last updated, which I think is unlikely in the extreme, then that is a crazy price.
Just a quick FYI for anyone that may be interested.
I attended the shareholder meeting on the 14th and asked the following question…
‘I understand that the RNS has to include the requisite legal caveats, however if we were talking informally, would you be telling shareholders that the tender offer is going ahead but for an act of God?’
The answer I was given was an unequivocal 'yes, that is the case’
The value on offer here is practically offensive!
Made 1.7m with interest rate dynamics against them
18m rock solid net loan book
7.8% dividend 2.5x covered
8m market cap
It's hard to say right now if subdued trading is the beginning of a decline as free AI models replcae their specialised products. Or, if a tough macro environment is causing a temporary slowdown in clients discretionary spend. If it's the former then it is like a print media business in slow decline and should be priced as such. However if it's the latter then it's an easy double from current market cap and possibly much more if the company's assertion of an AI tailwind is accurate.
Either way things are looking up again. Even Luca Mining is back to break even!
Thanks Nom but that still has a lot of the usual caveats and non commital statements that make it difficult to discern exactly (or even broadly) how indicative of financing the MLA appointment is in the real world.
I guess what I’d really like to know from an industry expert is, let’s say there is a spectrum that goes from;
Not indicative at all: I.E. If anyone with a hole in the ground that approaches the UKEF will get an MLA bank appointed to look into it and 99% of these come to nothing.
To
An MLA is only appointed once the UKEF has already basically done the due diligence themselves and a formal offer is therefore close to guaranteed.
Which of these statements is closest to the truth?
Do we have any mining finance industry experts among us that can shed some light on the importance of this step?
Is it the case that once an MLA is appointed a formal offer of funding is pretty much a slam dunk?
Or, do MLAs get appointed all the time without leading to an offer?