Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
My take on this share for what it’s worth is the following:
Nearly £200m of proceeds will be coming in after the Dec 31 year end so the forecast gross debt of £ 890m should be no worse than £690m with more proceeds to follow from other sales in the pipeline.
Capita focus on total debt but refer to post IFRS debt being at £427m at the half year. This could be down to less than £250m after the proceeds come in.
Capita said they are getting out of a lot of offices , many in London so surely that will reduce their IFRS lease debts so total debts should be coming down even more.
Order book looks strong with lots of contact wins
If it hadn’t have been for the one off pension payment and VAT reversal profitability in 2021 would have been good. Adjusted free cash flow at half year was over £140m.
Maybe with inflation and bond prices falling pension situation might look more favourable
With 1.68m shares they need £168m of basic earnings to have 10p per share. Even at 8x valuation that gives 80p valuation and chance of 3 to 4p divi for FY 22.
My reading is that no more one off adjustments / restructuring should be coming through in FY 22 and with 50m of annualised savings supposedly in the bag £168m of net profits are doable, even if it slips into 2023. Unless there is something ugly going to come out that’s unknown I cannot see how the current price is so low apart from the general sentiment affecting many similar stocks related to sudden higher inflationary expectations, maybe affecting margins in future. I see this share as significantly de risked from a year ago.
I have the same feeling now with Capita as I did with centrica last year before it started to turn around . Despite the disposals, clearly improving debt situation, restructuring completed etc, until you start to see it in the financial results it doesn’t create momentum. Even after the last results in Centrica’s case it did nothing. The upgrades by the brokers and banks seem to get things going with Centrica. The capita update given in December highlighted non cash adjustments coming for closed book life and pensions business and group finance systems. That will be a write off of assets I guess but no cash loss.The net debt figure quoted was before alot of the disposal cash comes through. I reckon another 6 months of drifting here before it finally turns, until then it’s daily torture.
There is a special meeting on 13th January for the approval for the sell off of the spirit assets. There was a trading update on 14th Jan 2021 so I would expect them to issue a trading update on 13th Jan. Until the government and energy companies come up with a way of keeping the default tariff from going up to the levels mentioned n the press of £1800 to £2000 It’s hard to see much happening to the SP. The results and outlook will surely be a function of how successful Centrica has been at forward buying energy in the last year or so.
I never considered putting my Sipp funds into II as it was a private company that I couldn’t find anything about online. I wanted to have a listed company hold my Sipp funds. If the deal proceeds then I would consider switching my Sipp to II. In terms of funds under management that must be where most of the investment money out there is to be harvested. I would think there is a lot to gain for them in this area. Abrdn are probably paying a very high price for this but it does transform the company profile.
Without seeing the numbers it’s impossible to say if they are overpaying but I have been an investor on II since 2011 and especially at the beginning they were far ahead of other sites, offering automatic dividend reinvestment which my other Sipp provider doesn’t do. Whilst it costs 9.95 a month the trading fees are low and are credits against trading costs. It’s great value I think as a customer. With free stock trading sites starting up and AJBell offering its low cost service app, margins could be very much lower per customer in future but these sites will take customers from other more expensive platforms. II’s Sipp is also very cheap and they offer friends and family free investment as long as the main customer pays a bit more each month. The research available has improved considerably this year through a variety of daily emails. Personally I think it’s a good move for Abrdn. They had the money available from sales of shares in their Indian investments. They are doing some of what Aviva is doing. Narrower focussed business closer to home.
The shares are of course very disappointing currently but over the period since 2006 there have been plenty of times when I have sold at almost double this price and bought back again in times like now. They have paid £1.20 in special dividends since floatation( with the share consolidations keeping the share price up) and very good typicality 4 to 5pc dividends every year. It’s a frustrating share but hopefully now can start to grow again.!
Anger at the poor overestimated guidance at half year on sales, margin and debt I would think.
If it is just a case of some project deferrals then at least sales are very gradually getting better and same for margins. No alternative really but to hold on and give it more time. I will probably buy a few more given this drop.
This has been down at the £2.00 level numerous times since the pandemic began and each time in a short period of time after has bounced back 10 to 20pc higher. Unless everything that was forecast for the second half at the half year results is turning wrong for the company which to me seems unlikely then with margins heading to near 9pc, a £7bn order book, higher margin business mix developing and growth in some sectors coming through then the bottom line EPS should start to see the benefit. I bought more at 2.55 and regret it now but I bought BP when it went to 1.98 last year and that worked out well. I bought BT at 98p too. Watching this fall in the last hour or two today gave me the feeling someone big wanted to push this below the £2.00 level to get it over with given its brush with this level before recently. I like many here want to see this one start moving in a positive direction so if this was necessary it could be the start of happier times.
With the half year announcement due on 16 nov, surely this should start to stabilise or even recover a bit assuming the market thinks the same dividend of 4.5 cents will be declared. I would be amazed if Vod can’t find a way to at least maintain the 9c paid annually for the last two years. That’s 6.9pc at the current share price. The last quarterly report was pretty positive on the growth front, so just as we see with WPP today, sentiment can quickly change.
I am amazed it’s not far off 2 years since the previous post.
This company keeps delivering, growing, has a business model that can perform even in very difficult times, pays a steadily increasing always well covered dividend and has easy to understand accounts. What is there not to like ?
I think the last update in June was very carefully worded. We will see negative cash flow as he refers to 2022 before it turns positive. Sales will be identical to last year at the same time. Maybe a good improvement in underlying margins . Debt will be the big change as he refers to good cash collection and of course the disposal cash. I don’t think the dial will move much tomorrow much as many comments posted on here. Too many other companies recently showing improvement, dividend reinstatement and with shares equally undervalued but still the SP doesn’t move. If there is a solid base from now on it will encourage more existing shareholders to buy more.
Shebur, if the value of buybacks in Q3 is 1,4b USD that is at current prices about 340 million shares. That’s about 1.7pc of all shares in circulation. Over time that will enable the dividend per share to increase more than it would otherwise. I am not a huge fan either of buybacks as many times they are used to try to bolster a falling share price but here I think it makes sense. One problem big energy companies have that they didn’t before is that a lot of funds must be gradually reducing their holdings or getting out of old style energy assets as all of the new electric/ hydrogen/ solar /battery projects absorb a lot of investor cash and tick all of the current boxes. Any price rise in BP is probably fighting against this need to sell down. BP of course over time hopefully will show that it too should attract these investors back.
Not really surprised at the results. Should have sold earlier this week and bought back today as I believe in this management team to deliver good results some time ahead. The report is gloomy reading for anyone hoping for a fast improvement. Two more years of significantly negative cash flows expected due to IT upgrades, continued COVID costs , extra pension payments and redundancy costs. The divestments are probably going to be key here. Maybe they will achieve a lot more than the £400m assumed in all the numbers for FY2022. Seems in past the board did all they could to make the year end debt as low as they could only for it to balloon again straight after. I get the feeling that the current management are trying their best to explain how the companies finances work with full transparency. Bad or good news ahead this must be a positive step. However bad today looks this share was under 2 pounds for a short while in January so some progress has been made since.
The last trading updated in May stated tough trading conditions, 100m of cost savings achieved, Debt now 0.5bn, aim to sell Spirit Energy stake.
My opinion is tomorrow will just show another positive step in a multi step process to rebuild the company. The long term picture gradually becoming clearer. That’s when hopefully the tide turns on the share price.
I can’t see a post on this yet today. Daily Telegraph today has article on Capita poor performance issues managing Royal Mail pension scheme during 2020 and being put into special measures as a result. “The outsourcer was moved into a stabilisation plan - meaning civil servants are giving its work extra scrutiny after it missed targets at call centres which deal with complaints and queries”
Clearly pressure on to improve performance quickly.
Could this be the reason for the fall today?
I do believe this will turn the corner but not for a few months yet. Just like BT is slowly re rating as it simplifies its business. After months of industrial disputes, a slow first quarter due to Covid, it’s hardly surprising having secured all the revised engineers contacts that they didn’t want to start turning optimistic. It must suit the company currently to have another quiet few months keeping the focus on turning it around slowly. Keep expectations low, over deliver etc. I really hope this is the case as I need 1.60 to break even but I can wait.
As I wrote some time ago in a previous post have a look at Cobham investor relations website at 2016 and 2017 as that’s when Mr Lockwood joined Cobham not long after the previous CEO did a 1 for 2 rights issue at 89p in June 2016 and it wasn’t enough to turn things around. They replaced all of. the top management after Cobham had a terrible year that year in 2016 . One of the first things Mr Lockwood did was launch a second rights issue in April 2017 , 2 for 5 at 75p after writing down a lot of assets.
I am really happy he is there now as I am deep underwater here and the actions he took at Cobham to eventually sell out at around 160p turned a bad investment for me into a break even and arguments afterwards that it was sold far too cheap. He/they turned it around. Surely it will come down to what he is finding in his reviews. Not surprisingly until this becomes clear this share will be treading water. But long term prospects , whilst very concerning at present as a shareholder , I believe are still good. Companies like this cannot be replicated. Whether things are anywhere like as bad as the new management found at Cobham who knows. Same industry.