George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Hotel Chocolat received a 170% premium from Mars and it was struggling financially!
If someone bought us for a 170%, it still would be for substantially less than the value of the Award payable to us, which is also accruing substantial interest.
Don't discount possibility of a bid. This price is absurd.
Someone would get paid to buy SL FFS!
All IMHO DYOR
Happy
Even if SL never happens, the Award is worth many multiples of the SP.
The SP is crazy so I took the opportunity to top up.
All IMHO DYOR
Happy
I never thought of Boohoo as being illiquid.
Thoughts?
All IMHO DYOR
Happy
Impressive alliteration.
All set for a good boost from the budget but I think the real focus is Christmas trading. The site looks "sick" to use the vernacular of nieces and nephews. And I think Christmas trading will be much, much stronger than current guidance and market expectations.
We're on the cusp of a returns to sales growth...
All IMHO DYOR
Happy
WeirdPal
Thanks for the alternative and equally valid view.
You have an employee's perspective, which gives you a different and better insight into strategy and culture. It's very interesting that you stress how corporately ingrained the new strategy is.
"Imagine the questions if the board and c-suite pivoted now, just three years after they signed such a sector divergent strategy. They may as well resign themselves if they do so."
This paragraph made me smile. Personal view only but I would happily replace the entire board in a heartbeat. They should have gone with Looney tbh after all they appointed him to the top job despite having apparent knowledge of his past shenanigans. An error of judgement coupled with (what I believe) is a poor strategic direction for the company.
Thanks for the reply. Certainly food for thought. In any case, I'm not selling at this price. It's way too cheap based on hard financials.
All IMHO DYOR
Happy
Watch out shorters...
All IMHO DYOR
Happy
The actual budget statement is not until Wednesday so plenty of time for the shorters to stew.
The whole narrative is changing and I expect the shorters will focus on closing out their positions sooner rather than later.
https://news.sky.com/story/chancellor-jeremy-hunt-to-focus-autumn-statement-on-cost-of-living-and-boosting-growth-13011825
All IMHO DYOR
Happy
Fixed link:
https://www.thetimes.co.uk/article/jeremy-hunt-considers-cuts-to-income-tax-and-national-insurance-vdtsp6prl
Https://www.thetimes.co.uk/article/jeremy-hunt-considers-cuts-to-income-tax-and-national-insurance
Looking forward to next week. We're all set for another strong performance in the run up to Xmas.
All IMHO DYOR
Happy
Meororyou
As always, you raise a good point.
However, I don't think there will ever be any such thing as a "renewables" company or a true Integrated Energy Company (IEC), as Looney liked to repeat often. One could argue that the likes of Total are the closest thing today to an IEC, but the problem is that there's little crossover between different renewables technologies. The technologies and skills for solar are very different to wind, and hydrogen is different yet again. Some technologies are mature (if not widely adopted) while others are in their infancy and unproven commercially. What future is BP actually betting on when its renewables investments are so widely, and i would argue thinly, spread?
Looney often used to say large corporate customers are looking to BP to help meet their Net Zero needs by delivering balanced energy from different sources i.e. an increasing component from renewables. But I can't imagine a day when the production of energy is seamlessly integrated with the delivery of energy (e.g. the grid). It is for the grid operators to make decisions about where, when and how they source the energy needed to balance the demand of end-users. There will always be a very important part for oil and gas in a mixed energy system.
Interestingly, Exxon is playing this conundrum by moving into areas such as lithium mining, where it believes commercial returns are more visible than producing renewable energy. Mining also requires a lot of energy so there is a degree of complementarity to its existing oil and gas business. Being an oil and gas producer could give it a potential cost advantage versus traditional mining companies.
Ultimately, I think BP is on the cusp of a more fundamental pivot back to oil and gas. I think for the second time in its history, Beyond Petroleum will be quietly shelved by a new CEO and drill, baby drill will be the new jukebox hit. What would really put the cat amongst the pigeons is a Republican victory in the US Presidential elections in November 2024. This would probably kill off Net Zero for good.
These are interesting times and I hope we get a US CEO from Houston to navigate us to a better place.
All IMHO DYOR
Happy
I wouldn't cut IHT first, although I strongly suspect that will be part of the plan to appeal to the "grey vote". However, this budget will be one of the most important in recent times, not only for the specific measures it introduces, but because it'll represent a long-awaited pivot to growth from fiscal prudence and austerity. As such it'll boost confidence in UK PLC and, by definition, UK stocks such as Boohoo.
There may also be specific measures to boost investment in UK stocks. One idea that has been mooted is a UK-shares ISA, where investors can subscribe a larger amount to invest in UK companies. This is unlikely to materialise but a measure that will happen is the ability to spread one's ISA allowance across several ISAs in the same tax year. These measures are individually not important, but collectively they represent a recognition that the UK has to improve conditions for UK listed companies, many of which appear to be woefully undervalued compared to their US peers.
Finally, these tax cuts will be the first in a series before the next general election and will coincide with falling interest rates. The Spring Statement will give the Chancellor another opportunity to introduce further tax cuts, when it is possible inflation will be much nearer the 2% BOE target.
All in all, 2024 promises to be a far more benign environment for consumer stocks with the promise of lower taxes, lower rates and better economic growth. The general election, probably in Autumn 2024, will complicate the picture but there are good reasons to believe the UK economy (and, indeed, the US) will provide a much-needed tailwind for Boohoo during 2024.
All IMHO DYOR
Happy
If there is no merger between Shell and BP (which, if it happened, I would support as a shareholder in both), the two should, at least, merge their renewables assets into a separate legal entity (e.g. a joint venture company). They can retain 30% each and raise equity against the remaining 40% in an IPO listing publicly. IPO proceeds can be reinvested in the new business.
The advantage is that the new company would need to explicitly and transparently justify its decisions based on sound commercial logic, rather than because it needs to pander to the green lobby.
Shell and BP should focus only on oil and gas.
All IMHO DYOR
Happy
I would love to introduce Alpha to my friend, Mr Paragraph.
Noticed typo in my post. They need to generate $650m free cash flow over FY24 and FY25* to meet the $800m.
Have a lovely weekend all.
All IMHO DYOR
Happy
I took a look at the half year results and compared them to the latest trading update. I noted following:
- Free cash flow guidance for FY2023 increased from $100m to $150m. They state this is "primarily driven by increased sales volumes in Gabon and deferral of some capital expenditure." In fact, most of it just a deferral of capex (fy23 guidance reduced from $400m to $370m) i.e. $30m of the $50m increased cash flow is capital they will need to spend later.
- Production guidance is showing a deteriorating trend. At the half year, it was reduced from a range of 58-64 kbopd to 58-60 kbopd). Now, they have stated it will be below the lower end of already reduced guidance. The water injection issues speak to the difficulties in keeping ageing, mature assets running as reserves deplete. This potentially means higher capex in future.
- the c.$800m of free cash flow at $80 Brent is not new news but FY23 is over and they generated just $150m of free cash flow. This implies over FY24 and FY24, they will generate an additional $650m of free cash flow. That seems quite a tall order based on their track record. We need to see more details when the final results are announced.
All in all, the trading update was broadly in line. Oil is strongly up this evening so it should provide good support to oilers including Tullow.
But I see nothing to get excited about with Tullow's results.
All IMHO DYOR
Happy
My 10-bagger babies have still only bitten into the meanie shorters with their milk teeth.
The best is yet to come...
Have a lovely weekend all
Happy
Will read overnight and post tomorrow.
Have a good day
Happy
He's been calling me out on BP bb. I didn't follow the trading update.
BRB, could you please clarify if you want me to take a look?
Best
Happy
Happy
Hi BRB
Thank you for inviting me back to this BB by calling me on the BP BB.
I wasn't going to post, but you obviously want me to take a look at Tullow's recent update. I will oblige.
All IMHO DYOR
Happy
Hi BRB
Do you want me to take a look at Tullow's update?
Fair enough, I'll see you over at the Tullow BB.
Best
Happy
Dividend yield is roughly 4.8%. And unlike many in the FTSE, it looks perfectly sustainable through the cycle.
As bonds yields and interest rates start to ease through next year, the dividend should look increasingly attractive to income investors.
I think there is scope to start scaling back buybacks and making more material increases in the dividend.
I would like to see buybacks replaced by a variable dividend element as many of the miners have and indeed some oilers (Pioneer etc.).
We would need only to tweak the financial frame. The amount we apportion to buybacks could easily be switched to variable dividends. Perhaps, with retention of a Q1 buyback to offset employee share options vesting.
I would prefer more cash dividends in my ISA.
All IMHO DYOR
Happy