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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?

I’d argue that they were in profit for FY23 after normalising for decommissioning and non cash impairment. However, Gas prices today are less than half that of the average for FY23. Which begs the question, are they on track to be profitable in the current period? Probably not as operating profit will be nothing like FY23 but admin expenses will be similar.

Thanks Nom.

I’d say that it’s mostly positive. Sprott are willing to keep funding the project so they obviously see something of value and EDM are clearly still very involved in the conversation as well. I’d have liked to have heard something about the UKEF but, on balance, I’ll take it.

As frustrating as it’s been holding orchard the last couple of years, the relative performance has actually been quite good. If you’d have bought at the AIM high in September 2021 you’d be 31% down but have collected approximately 12% in divis along the way. So that’s net 19% down vs 44% for the most appropriate benchmark. I’m not sure why I’m posting this. I guess it made me feel a bit better about having held orchard all this time. Maybe it will do the same for others.

Sparkling results in the context of the current macro environment

I notice there is a Simon Thompson article out this today. Has he mentioned it before or is this an initiation of coverage?

Does anyone have any clue how much a liquidation such as this costs? I’m completely in the dark myself but using a (hopefully) high estimate of 1m to work out what shareholders should get.

Greatland and Ariana shares are worth about 6.5m at today’s prices. So even if you discount the other residual holdings to be sold pre liquidation and discount 1m for professional fees, we’re looking at 5.5m coming back to shareholders plus or minus Greatland and Ariana share movements in the couple of months or so that the process will take to complete.

Is that about the size of it?

Watched an interview with the manager of Octupupus investment fund talking glowingly about Sanderson a little while back. Either he’s changed his opinion or (more likely) this is a prime example of what we’re seeing all over. Funds forced to sell decent businesses against their will.

Just checked their net asset value and looks like it’s down well over 15% in 6 months. Obviously that’s not all redemptions, it’ll be performance as well.

I can see a couple of reasons. Lower fees and an increased compensation ratio from 41% to mid/high 40s. I believe that a 5% difference is an increase in staff remuneration of 9m (assuming constant revenues).

Good for clients, good for staff, bad for shareholders.

I’ve added today. The next year or two will be tough for them but they have such a strong balance sheet that I think they can withstand even the most severe market downturn. For example, the Ilke administration will hurt their balance sheet and profits this year, but they could withstand another two or three events like that one without the need for debt or shareholder dilution. I doubt many of their competitors could say the same. The market will eventually improve and Tamdown will still be standing when it does. Possibly in a less competitive environment as well.

To have said in July which is after the end of the period reported today that 'we are pleased to report an improved trading performance…’ was an absolute scandal in my opinion.

Everything about trading was down except for gross revenue which was only up because of the acquisition. Moreover, what’s to be gained from this kind of chicanery when we were all going to know the truth a couple of months later anyway!? Disastrous management.