Member Info for Guitarsolo

Loughton/ Surprised: I believe the 400p is Panmure Gordon's estimate of Economic Value in 2020 (i.e. the marked-to-market valuation of Chesnara's constituent parts). This is down from circa 445p in 2019 and Panmure estimates it will drop again to 387p in 2021.
Chesnara should always trade at a discount to its Economic Value since, assuming that EV is fair, it wouldn't be easy to quickly dispose of assets. The question is, how much of a discount is warranted?
Most importantly, there is a decent cash pile (£77m) which covers the divided for two years at least. That should give them confidence to maintain/ slightly increase the dividend over the next couple of years. Beyond that, there are "headwinds" in terms of finding new business at the same rate of return as expiring portfolios. However, with footprints in the UK, Netherlands and Sweden there is a decent amount of diversification.
The share price is disappointing and I did reduce a while back. But I've been a holder since 2013 and do so mostly for the solid dividend.
Guitarsolo

I was wondering last night whether it was worth responding any more. But after listening to an interesting radio interview between Maria Miller and Lisa Nandy about misogyny in parliament, I thought it was worth it.
Riskingit, you ask if I can name one BAME individual who has missed out on a senior job because of their colour (and we could throw gender etc in there). The fact is, I don't have to. Turn the question on its head and ask whether the statistics show that the best person has always got the job if they are not white, middle class, male and probably public-school? We have just 7% of FTSE directors from BAME backgrounds. We have a third of FTSE 100 companies with all-white boards. We have significant under-representation of women. Are you suggesting that on ALL occasions, that white (male) person was the best candidate for 33 FTSE 100 companies with 20+ directors? It would be quite some statement if that was the case.
Anyway, notwithstanding any of the above, LGEN has laid down its marker of what it expects of the companies it holds shares in. I seem to be on the same page as them.

CXS. Research McKinsey's diversity report. They found that a diverse leadership led to better performance (so more money for you). It's a good thing.
Oh, and please look up the meaning of "woke". You're not using it correctly.

And I'm simply saying it hasn't been on merit to date, otherwise boards would be more representative of society. LGEN are trying to help change that. Well done to them.

As I have said, you hire on merit. But when you take say FTSE 100 boards, with say 20+ directors of each, you have 2,000 directors. Are you saying that each company wouldn't find at lead one BAME candidate that deserves it on merit? Or has the pack been so stacked in favour of non-BAME that we have reached the point where a huge investor like LGEN thinks it is about time that these FTSE 100 companies managed to find one person, just one person, from a BAME background. What they are challenging people to do is to stop what has been an in-built response till now that has favoured non-BAME to reach the final analysis. You know, in the same way as somehow the people who went to the right school or university, or have the right connections, somehow made it through to the same final analysis.
Research Mackinsey and their findings over board diversity.
It's not about hiring the most suitable person.....it's about whether the most suitable person is necessarily given the right chance. What LGEN are advocating is not positive discrimination, it is simply no discrimination. I applaud them for that.

"To hire on the basis of race is erm, what's the word? It begins with an R..."

So when a third of FTSE 100 companies have all-white boards and BAME individuals make up just 7.4% of board directors then have they been chosen purely on merit, or is there some prejudice there, beginning with R.....?

Of course you choose people on merit. But there is clear proof that even in the year 2020 when companies have had decades of awareness about race and gender issues, there is still no equality of representation at board level. Companies aren't doing it by themselves, so perhaps they need a push.

Lurka, it would only be a "token" if there was only one female/BAME etc person. No reason why there only has to be one. And when you say "European" what do you mean?
ESG is absolutely necessary. I would applaud any attempt by LGEN to implement it itself and, by virtue of LGIM being what it is, to use its position to lead the companies it owns to move in the same direction.

Afternoon Devon!
Does anyone know if NCYF publish details (specifically coupons/ effective yields) on its new purchases and compares these to maturing investments? What I am basically trying to estimate is what is the long-term yield likely to fall to?
Let's say that NCYF held a selection of bonds with an 8% coupon that it bought at £1.25 = a 6.4% yield. Now let's say they all mature and are replaced with a 4% coupon bought at £1 = 4.0% yield (obviously!). Assuming all other things equal, the level of income would fall 37.5% from 6.4pps to 4.0pps.
So when we see NYCF say that it is not sure the level of pay out can be maintained for the longer term we need to see what the currently held investments are being replaced with. Does anyone have a handle on this that they're willing to share?
Guitarsolo

I would agree that climate change and excessive remuneration should be added to the list. But LGIM is a £1.2 trillion business so why can't they cope with having more than one or two objectives to achieve the diversity to reflect society. The reason why gender and race imbalances still exist (and they are not new themes) is because not enough has been done to achieve the necessary balance over the last 20-30 years (or more). History shows that the most competent person for the job has not always been hired, unless we're saying that the most competent person is usually a white male, public school educated etc. LGIM/LGEN has a platform and I welcome them using it.

pboughton: not sure why you think the article stands that LGEN are racist, quite the opposite. They are using their position to try and influence a programme of diversity within the FTSE 100 boards. And why shouldn't they? Boards of directors have failed to do much by themselves so perhaps a push by their largest shareholders will help.
BTW, "woke" means alert to all forms of discrimination, especially racism. To be "anti-woke" means to be "anti-anti-racism", i.e. to be racist. It is horribly misused by people at present.

Not much happening on this discussion board, but here goes just in case.

I've been a long term holder of NCYF for the divi for several years. Just read the results summary and was initially very pleased to see EPS has risen to 4.59pps (from 4.49p). This is important as it arrests several years of declining EPS to the point where the dividend was barely covered. Adding 10bps to the EPS (whilst increasing the dividend by 1 bps) gives a very marginal increase in cover (from x1.01 to x1.03 or something close). It's not massive but is something.
We also know that NCYF has about 1 year's worth of dividends held in reserve and the board has stated it will use it if required to maintain dividends in the short term. Again, this is a strength for NCYF but we would prefer they weren't required to dip into reserves.
But then I saw the following sentence in the coverage:
"The Board recognises that it is not necessarily the case that the current level of dividends can be maintained in the longer term but it expects that in the immediate future, the dividend policy can continue."
Is this the first acknowledgement that the ultra-low interest rate environment is finally starting to squeeze the whatevers of NCYF? I presume this means that NCYF is struggling to replace maturing bonds (or those traded out) with bonds of anything like the same coupon. It makes sense since companies are raising money at ever lower rates these days (e.g. didn't Unilever raise a load at about 2%?). This is going to make it difficult for NCYF to maintain its EPS and by extension its dividend on a 5-10 year horizon, without using leverage which it doesn't seem keen to do (and I wouldn't want it to).
So I reckon we've had the first official shot across the bows to expect a dividend freeze/cut down the line. I know many will say they've said this before but I think this is the first time NCYF has said as much in press.
Franco is going to need all of his experience to try and hold/increase EPS as much as he can over the next few years before the portfolio is replaced with much lower yielding bonds. So don't expect much in the way of dividend increases from now on, probably hold it steady or increase by 0.01p just to keep the record looking good!
Any thoughts from out there?
Guitarsolo

Thanks 3Putt,
I'm surprised HSBC didn't contact me when I purchased the shares a few months back. Perhaps they've been waiting for dividends to be paid.
My main concern is only that by benefiting from an American company (even if floated in the UK) their IRS somehow thinks it has a right to meddle in my financial affairs! I may just be being paranoid, but I've seen what they can do! I even fear for the few 100 dollar bills I have in my desk drawer!
Guitarsolo

Re W-8BEN forms
Dear All, I was just about to post an enquiry here and see that Libero beat me to it!
I own a small number of these in an ISA with HSBC. I'm aware they're an American company and that as a Brit I would need to complete a W-8BEN form to receive any income from a "US company" without withholding tax. To date, HSBC has not said anything possibly because the recently announced dividend will be my first dividend from SOM.
My question to other British shareholders is this; are there any downsides to completing a W-8BEN form and being on the IRS' "radar" as regards investments/income? I don't hold any other US-companies specifically because I have avoided anything to do with their long-reach! (I don't have anything to hide! I just don't want the hassle.)
Any comments would be much appreciated.
Guitarsolo

Don't take this as certainty but I believe Woodford is/was an investor. I recall seeing something to say he went over a declarable limit. If so, he might be selling off to combat his current woes. Sad for him and his investors, but I would keep adding here. Especially as the share buybacks are over 50m shares and counting. That's 13% of the company.
At such a massive discount and with a (possibly) desperate seller in the market, I hope VSL is going to keep buybacks at the max possible.
Guitarsolo - gently strumming

Bumbler......I know this is heavily shorted and I can understand why compared to the sector as a whole (i.e. the big boys like Hammerson and British Land trade a significant discounts to NAV whereas NRR doesn't.....yet!). However, the fundamentals are different. NRR has a very good occupancy rate, is focused more on community hubs, seems to have a plan when it makes acquisitions and the rent roll is good and affordable. The share price will be volatile - especially while shorted. It could drop to the low 200s but I'm here for the income which seems solid at the moment. Good luck.... Guitarsolo

Sage/ Skopolitis, many thanks for your posts. I have been off radar for a week in southern France - right in the middle of the floods! So happy to be back in calm Devon.
Whilst in France I have been following the discussion on ADVFN but am getting a bit tired of the amateur "activist investor" mentality from behind a keyboard! If these people knew so much why aren't they directors of mining companies themselves and playing the system to enrich themselves with share options?!
Anyway, back to a more civilised BB, Skopolitis actually asked the very questions I was asking myself. Namely, was the lower grade ore a one-off - perhaps because they deliberately mined the better stuff when zinc prices were better? - Although as it happens, H1 2018 was the best period for the zinc price - Sage you say that Roger said this will not be repeated in H2. So you think we can expect volumes of zinc concentrate to increase (all other things equal) back to the previous levels?
Of course everything follows the price of zinc. The arithmetic average of the zinc price for H1 was $3267 and the update says they achieved an average price for their concentrate of $2552 (from memory). So we can calculate that concentrate sells for approximately 20-22% below the zinc spot price (these are only arithmetic monthly averages so not accurate).
To my mind, par value should be 140-150p at present. We need to see what happens to the zinc price. Also, the mining license for Zone II is very important and will be a game changer. It is frustrating that it has taken so long but it does seem like it will happen, sometime!
I do have some criticisms of the BOD though. Not about their intentions, the lack of an interim dividend, the options they award themselves or their management of the mine. I just wish they could provide a bit more information to investors. This is an important investment for me and I am hopeful of making further profit. I need more information to make an informed decision what to do and we don't readily get that. Also, I think MN's statement starting with a reference to poor zinc prices being the reason for the H1 results is disingenuous. The average price of zinc in H1 was the highest it has been for a very long time (including H2 2017).
Anyway, I will continue holding as I still see considerable upside barring a collapse in the zinc price.
Guitarsolo

Hi Sage,

Yes, I have been following the chat over on ADVFN but I am not fully registered so can't contribute. If I could have done I would have said to the other posters there that you're someone I consider has a good feeling for this company, are heavily invested, knowledgeable of the facts and comfortable talking to Roger and therefore receiving first-hand information. The ignorance of some on that board (well, it could be any board) is staggering and I suspect many of their claims to previous jobs and shareholdings are exaggerated!

A good example is the wrongly held belief that the Zone II license has been granted. It has not! The RNS is very clear, they have permission to explore (i.e. do a full assessment) and will be fast-tracked for full license approval. But it has not been granted yet! That's why the share price is 10-15% off recent highs.

The H1 results should be very good though. The arithmetic zinc price for H1 was $3,267 which is 10% higher that H2 2017. With no debt interest to pay I would very much like to see earnings of 16c or better. Something to indicate over 30c for the year (i.e. well over 20pps). That would be nice!

And if it is, then there is the dividend to consider! I agree with you that the recent zinc falls will make the already cautious BOD probably even more cautious. They are also stockpiling cash to pay for the works when Zone II is mined - I wonder how much of that they have already, most or all I would hope. But if the mine is throwing off cash and there is no debt to service, I do think it is reasonable to pay a dividend. Perhaps 1/4 of full year expected EPS - so yes, around 4p or 5p. I would be happy enough with that with a view to it being sustained and improved as long as zinc stays where it is or goes back up, and Zone II is approved and effectively already financed.

Good luck and all the best,

Guitarsolo

Robin H. Thanks for your post. No mention in the article about the strike that was going on at the Canadian smelter. Is that resolved does anyone know? Anyway, whilst i can see that smelter capacity restrictions will raise the ultimate price of refined zinc, GFM only sells concentrate to smelters unless I am wrong. So it is the concentrate price that matters for GFM.... not saying that this won’t also benefit from smelting restrictions.... just trying to be accurate! Guitarsolo, strumming away, waiting for the day, when the ray of sunshine comes my way, by miraculous way of a big pay day.....

I've just added a wee tranche at 9.59p. Brought my average up to 6.1p. Probably got enough now to sit back and enjoy the ride (approx 4% of portfolio invested here which is my limit for an AIM stock).

The news from Portugal continues to be positive and I think we can expect/hope for a resource upgrade in due course and the feasibility study. The potential in Portugal seems to be huge - but that is the thing about lithium, there is no shortage of the stuff, it's about (i) speed to production/market to meet the exploding demand over the next 10-15 years, and (ii) having low extraction costs. SAV. fits both of those.

All quiet on the Oman licensing front after the 8 required letters of no objection. It'll happen, just when of course.

So much potential for positive news to lift the share price.....Still a risk as with any explorer. But high reward if they get even one of their three projects right.

Guitarsolo

Yesterday morning Swallowsamazons: "Who ever still holds significant quantaties of these must either have balls of steel or are just plane stupid. The risk profile of GFM no matter how good the company is ,is now of the chart... Time to nip it in the bud..."

Shame! True I wouldn't have predicted that the license news was imminent, but there are many reasons to hold GFM - that was just one of them.

Guitarsolo - GFM is my largest holding by value (due to price increase).