Member Info for GLTader

News just in: Microsoft To Spend $15.1 Billion On UK Operations Including London AI Lab, Gaming And Other Work

Will be amazing WPP & Microsoft partner! Come on Cindy Rose, leverage your relationship and get it happening......

It's coming.

My bet is Rio T will gobble up Glencore.

And Blackrock just added 2%.....

Copper in the US dropped 18%.

This is because copper in the US commanded a premium and had a few spikes / uptrend when the tariffs were first spoken about. There was also a lot of stockpiling.

Its basically rebased to end May levels.

Totally agree.

Currently, WizzAir is valued at circa 1 x revenue or 5 x EBITDA, with growth expectation of 10%.

Even an improvement from 5x to 6x EBITDA will mean a doubling of its share price from £12 to £24.

If you see Q1 FY26 results as being the "worst is over" and start of turnaround, which I do, then it is certainly a bargain.

Revenue up

EBITDA up

Net debt down

Q2 Outlook projecting the same trend

No of fleets growing

Grounded fleet (not in management's control) returning next year

What is there not to like in this recovery play.........

A question of WHEN not IF!

This was rumoured back in 2017 when valuation was probably 3-4x more.

It's a bargain now. Take over, offload certain assets to part fund acquisition and non-priority assets, combine and bring out both synergies and complementary offering to becoming the most differentiated marketing transformation platform and consultancy business.

Absorb great talent including new CEO, if she is prepared to lead under a different banner.

Definitely good value in my view.

If you look at the past few conflicts, Rio / miners fall but then recover strongly when people realise:

1. Conflicts (so long contained) actually increases the need for metals - replenishment of arms and reconstruction efforts;

2. Global economy remains in growth, albeit curtailed by both tariff uncertainties and conflict - prices holding versus last year's levels;

3. Significant shift in investment into defence by major economies - all requiring metals.

Separately, I think Rio impacted by focus / bet into lithium, both acquisition of Arcadium and then leases across Chile and Argentina. This is a bet that the lithium based battery storage solution will continue to grow. Sentiments however impacted by Trump / US legislation re removal of credits. But, this is temporary. I know the economics of solar PV and BESS is improving to the extent it doesn't need credits / incentives anymore. So, I agree with Rio's bet.

Talk of Glencore acquisition is interesting. I am sure the Board will do their calculations before any decision. It will be focused on the copper assets which is a positive in my view. My reservation is not adding copper to the portfolio (copper is doing very well), it is cash flow especially with the lithium bet. So, let's see.

Rio production numbers will be out in a month's time. If production is as forecast, and prices have remained reasonably stable versus 2024, then Rio's business definitely undervalued, big time, even with the uncertainties. Remove the uncertainties and it is even more undervalued.

No - it is because we are undervalued and report just out that Liberty Global interested in buying 50% share of Vodafone Ziggo held by Vodafone for circa €2b / $2.2b! I think people can easily do sum of parts now with valuations of Spain, Italy and Vodafone Ziggo!

DanielH, you are understandably frustrated with the SP performance and therefore, questioning share buyback as a form of return to shareholders. Whether you agree or not, share buyback is a form of return. Most of of the big techs, oilers and banks in the US do large buybacks, as a form of return with lower dividend payouts in fact. In fact, until recently, META only did share buybacks!

In THEORY, share buybacks basically reduces the number of shares in issue, when cancelled. All things being equal, each share therefore owns a bigger chunk of the company. This works the same to EPS calculations. Put simply, if you owned 10% of a company and the company did a share buyback of 20%, you will end up owning 12.5% of the same company.

That is why, IN THEORY again, share buybacks are accompanied with corresponding share price increases.

You are feeling crap about it because Vodafone SP is not rising, instead falling.......you can't challenge the maths / theory. Markets have a mind of its own - and sometimes herd mentality. If/when telcos stop killing themselves and people realise we can't live without telcos, and increasingly so, our rerating will come.

Me too!

By the way, I am also VERY disappointed and surprised with Vod SP performance. I fully expected with all the actions taken by MdV and with Luka on board, we will be at least 80p+. I still cannot fathom why other than a "wait & see" approach re Germany and just being unloved.

I say this because I think we are SIGNIFICANTLY undervalued. I am not plucking numbers out of the cuckoo land but referencing Spain and Italy deals, which we offloaded for €5b and €8b respectively. You can go look up the mulitples achieved on each. Both, as a reminder, are contracting businesses!

Today, we are circa €20b market cap + €23b net debt = €43b EV. In my view, just Germany, UK, Other Europe and Vantage alone, using above as reference, will make that up. That leaves the entire African business at NIL value, plus other investments.......makes no sense!

This is why, I am convinced it is being manipulated, and I won't be surprised with a bid by private equity or a tech major. The former will simply break company into parts and offload since the sum of parts significantly exceed total valuation. The latter will achieve great synergies in customer acquisition costs AND gain access to 300m subscribers.

DanielH, investors measure a company's return to shareholders in both dividends and share buybacks.

As below, dividend yield is 5.6% (today).

AND

The company has earmarked a further €500m (outstanding left to do in FY24/25) from Spain sale and another €2b for FY25/26 from Italy sale, in aggregate €2.5b. This is equivalent to 12% of today's market cap!

Plus another at least €2.5b of share buybacks to come i.e. 12% return.

Amazon cash balance $68b

Microsoft cash balance $80b

Both currently have partnerships with Vodafone. Both have significant monetisation opportunities exploiting Vod's IP / assets.....geographically, user base, infrastructure etc.....

Which one will buy us up first?

No less than 100p will be acceptable.

Toff, your call out of the company's debt is fair. But you are ignoring several things.

1. Cash position of the company - net debt is what is important and that is circa 31b;

2. Lease obligation is an accounting inclusion - to reflect capital commitment but in reality, part of ongoing OPEX as they unwind and incorporated in EBITDA calculations;

3.Net debt as a ratio of EBITDA, which when you compare Vod to its peers ie this industry is favourable at the lower end of range of 2.25 - 2.75 (will be achieved after Italy proceeds) when it becomes circa 25b.

I am pretty shocked with the market reaction yesterday - overreaction comes to mind. As with all moves, markets tend to over/undershoot up/down. From what I can see:

Germany (circa 47%) needs fixing. Is being fixed. Will be fixed. The MDU impact was known. Growth drivers now in place to counter and give net growth over time.

All others (53%) is growing very nicely. In fact, doing well such that it countered Germany reduction and more ie NET revenue grew.

So, when Germany MDU impact unwinds, 1&1 pops in, fibre growth (think BT Openreach) - and UK consolidation + other markets growth, you can see what the direction will be.

At this share price, the more share buyback the company can do, the better. And the funds are there with the disposals!

Hang in there. Won't happen overnight but in time, Vodafone may yet get back above £1.

Quite an informative / balanced BB for a change, albeit soured in mood/sentiments by the SP action. Bottomline, BP is undervalued versus its peers, its assets and current & future earnings potential. I wanted to share my view on a few items:

Share buyback or not - many argue re reduction in net debt versus share buyback. If our SP is/was high and cost of finance crippling, I would agree. But where it stands, so long we are doing so with surplus (80% rule), then I am all up for it. In fact, the more they can do at this price, the better!

Net debt - Kate was clear about our net debt. It's not just the actual level itself but the ratio of earnings to net debt. BP is well within the acceptable ratio. Balance sheet is also rated A+ by Fitch and Moody's. The quarterly fluctuations in net debt should be expected due to timings of CF, but so long ratios are fine and balance sheet robust, then fine.

Valuation - just based on BP's current operations, those to come online in 2025 and after, this company is well undervalued. It's not a surprise that average price target by brokers are 505p.

So, why are we here? I can't pretend to know because the markets sometimes over/undershoots when it moves, but I imagine it is due to lack of details / clarity as to direction (coming in Feb 25). This exacerbated by share price action ie when sentiment is weak, people sell. But if you believe in the fundamentals, then now is perhaps the time to accumulate. Re dividends being cut - no, I don't believe that will happen - it's been set at a resilient level.

Good luck all.

The windfall tax is on UK extracted oil and gas - which from last report, BP's is less than 10%.

Also, there is a floor to when windfall tax is removed, $71.40 for a continuous 3 months (something like that). And as you know, BP's planning price is $70.

Taverham, to me it is very clear. Output VAT is charged and paid to HMRC based on sales made and ultimately paid by customer.

Novacyt sold product and services at contracted X price, which they added VAT on and subsequently paid it over before DHSC paid them in their usual VAT quarterly returns. Then there is a dispute with claims and counter claims - finally a settlement agreed of Y price for the product and services.

Y price becomes the VATable amount regardless of whether it was discounted, changed due to change in order or in this case, dispute settlement.

Humbly, cannot see why it would not be returned unless there are other factors outside of X becoming Y!

Good RNS. Glad it confirms what we / I estimated. Nothing in life is ever guaranteed, hence the wording I imagine in the RNS, but the VAT reclaim should be a formality as someone pointed out.

Net cash inflow of £7m, less legal costs, brings cash balance to £43m using 30 April balance, and with operating cash burn to end year, hopefully we will end up with circa £35m which is 50p share price worth. Add valuation of the business, and no matter what people think, there is value in a £21m T/O business with 60% margin, then you can see why we are undervalued.

Next up, as part of this settlement strategy, please announce a new relationship / deal with DHSC. Those who may have caught on to the Covid inquiry report, they recommend preparedness for the next, not if but when......let's see!