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In his last webinar Eric mentioned that at the annual results he would be setting out Shanta’s strategy about “return of capital”. I rather took that to refer to 2023 and beyond but it might be an allusion to 2022 dividends. Personally I think he would be loathe to pull or reduce the dividend and with the current POG they will probably scrape by in having enough money for Singida. Dividends don’t cost that much.

Well Laurier says in his report in the RNS that a number of “exciting” d2p opportunities are expected to complete in Q2 2022. So, for a start, let’s see if that holds true.

I think the fact that the share price has held up amid a fair amount of volume today is down to a number of bullish forward looking statements in the RNS (and obviously ‘helped’ by the fact that the bad news on last year’s operating losses had got leaked so sending the share price down sharply in the weeks before the RNS).

They need to get on top of their messaging, which is over optimistic especially about timelines. I had hoped Bob Wigley would have sorted them out on this.

Operating loss double what they said in December trading update (even that was much worse than their forecast for 2021). Is Bristow on top of his numbers? No wonder they extended the exercise date of management options.

Meditech corporate (investment) agreement now expired. A lot of talk about delays and so jam tomorrow. Noticeably no mention of the $40m and where they stand on that. They say some of the stuff in the pipeline would be transformative but difficult to know if they will deliver.

Mentally, I have 3Q results (mid October) when we should have lift off, all things being equal and everything on track. By that stage there should have been a quarter period of high production and high visibility of when Singida comes into production. The 2021 annual results are going to be poor and although anyone who is following the Shanta story knows the reasons many (even institutions) will simply look at the bald figures and see just another struggling small cap producer.

2023 should be transformative. It is not only that Singida production comes in but also that capex on Singida falls away. Towards the end of 2023 we should see a WK feasibility study. I think that will be the trigger for starting to recognise value in WK, which the market currently treats as being too far away to be of interest.

Lloyds had a bad 4Q 2021 - with quite a few “one off” hits - £600m provided for HBOS Reading, similar amount on restructuring and almost £300m on volatility. Offset by impairment releases. Element of kitchen sinking by new CEO I think. Perhaps the dividend would have been higher without these hits. They certainly seemed to guide to 2x interim. Also Nunn obviously wants to get number of shares down at start of his reign. Buyback does not need shareholder approval and can start immediately, I believe.

Here is the history behind the court case. It is rather a long read.

https://bioplasticsnews.com/2021/12/06/history-anti-oxo-biodegradable-plastics-history/

You have to register. Just go to investormeetcompany and register plus select shanta webinar. Link follows on from that - you will get it on Monday.

Looks like Shanta have pulled forward presentation of Q4 results by a day to 24th January. Also investormeetcompany webinar at 11am on that day.

Stroller. Having now watched the webinar I would agree with that. Ord div clear (2x interim). Will do a buyback of around £1bn perhaps a bit higher. Personally I think there will be a special div to top up to an overall 3p rate for divs - so as you suggest around 1p.

The capital headwinds were not explained beyond adding £15-20bn of RWAs on 1 Jan 2022. A good deal of that will be reduction in IFRS 9 transitional relief but not all. Not sure what the rest would be.

Also confirmed that expansion activities would not consume much capital.

The 1.99p is coming from the recent Proactive article - last posted by Troajan. I think the 1.99p must include the 0.67p interim as the total dividend amounts for 2022 and 2023 projected in that article are roughly the same (but going up). These are said to be consensus analyst views.

Baffling as to why it is so low. What is Lloyds going to do with its surplus capital?

Asperger. Can you put me down for 87p (just been beaten to 83p). Thanks.

Broodbox might want to go for 76p. That gives a nice run from 56 -87p.

The financial metrics are there. I am not sure it is well appreciated by the market how much of revenue turns to profit. A key question is how they got to the $40m (which notably is recurring annual revenue) eg are they assuming if they do a successful trial for a bakery company on one product the bakery company will roll that out to its other all products in every geography? That might be a big stretch in the short term. The $40m over 100 trials is an average of c$400,000 per order - so it assumes some big orders. However, even discounting the $40m very heavily should result in significant revenue/profit for SYM. Even £1-2m profit in 2022 would really move the share price.

Last year they made an operating loss of £600,000 in the first half, £200,000 operating loss in Q3 and broke even in Q4. So the trajectory is moving in the right way.

I doubt there will be much scheduled news before the prelims (last year 31 March). They have released a trading update in December for the 2021 year so no need for another. Having said that the price has been creeping up in the last week or so at a time when there is not usually much going on. Like many AIM stocks SYM is a leaky stock (last year a good deal of selling for a few weeks before their December profit warning - a terrible miss) so some chance there might be contract news soon or they might just put out something saying strong start to the year (but normally would leave that to the prelims). Late on Friday a couple of big trades -100k and 50k - big for SYM, with another push up on the share price.

A firm start to the year. 2022 is the year when I think we will find out how much realisable potential there is in SYM. The potential revenue attributable to the 100+ trials on d2p additives was quantified for the first time by SYM in their December trading update at $40m+. I had hoped they would do that. These trials have largely been running for at least six months so should conclude one way or another by end 2022.

$40m equates to £30m. On d2w SYM makes almost 50% margin. It has said margin on d2p products is very much better - so perhaps up to 70%, but at least 50%. So the $40m (£30m) equates to £15m to £20m of gross profit. We shall have to see how much they get - but even 10% of that is £1.5 - £2.0m which, because there are virtually no other incremental costs or tax, also ends up as the bottom line.

The bar is not high. Willing to have a go……

Yes sorry typing too quickly. Getting as bad as the FT in mixing millions and billions.

The RNS is not about ORDINARY EQUITY shares (ie the 71m in issue). It is about redeeming subordinated liabilities ie debt that no longer appears to count for regulatory capital. The good news is that this debt is very expensive eg 12% coupon and I reckon Lloyds will save £200m a year by clearing out this debt (may be offset a bit if they have to issue some replacement debt - which they seem not to do, but even if so that would be at a much lower interest rate).

Yes, I rather thought the same. Either Meditech or Vincel.

I’d agree with that Muchaboutmoney. However, a 2p final dividend would only cost £1.4bn - so a bit more scope for distribution. Perhaps a 1p special?

On a go forward basis (and absent an economic downturn) I expect Lloyds to generate over £5bn excess capital per year. With interest rate rises quite possibly closer to £6bn. Roughly I would think this gets used - dividends: 3p a year (c£2.1bn), buybacks (£1.5bn), pension fund (£1.2bn), IT (£0.5bn).

The pension fund amount is because there is a new deal with the Trustees that if there are distributions to shareholders, up to a max of £1.2bn per year goes to the pension funds to close the deficit. I expect the max. I expect about £1bn to go to IT as Lloyds revamps it’s core systems. There is a £0.5m offset on this due to the annual amortisation charge. Both these pension and IT funding amounts should disappear by mid 2024, opening up scope for future shareholder distributions.

At this stage and with a new CEO I would expect the accumulated capital surplus due to halted dividends to remain largely intact.

Thanks for that Highveld. Rather depressing as, as with dogstar, I was hoping the new President would not go forward with these measures. Looking at Petra’s RNS they are being forced to give the Govt 16% equity but, as mines eventually run out and close with no residual value, I think the key measure is they have to share the economic benefits of their mine 55 to 45 in favour of the Govt. That is not quite as bad as it sounds because the economic benefits of the Govt include taxes, levies, royalties etc.

So in Shanta’s case it pays at least 30% corporate tax (more like 35% effective), 6% royalties, 1% payment levy and 10% employer national insurance (assume that is in there as well - maybe not). Last year it paid $26m in these charges. So a similar deal might not be that disadvantageous.

Within the deal Petra is getting its unrefunded VAT back. I have never been optimistic about Shanta’s past VAT (the Q3 presentation showed $17m was pre 2018) and in the Q3 webinar Eric came clean that of course it is nothing to do with finishing the VAT audit but because the Govt has screwed all the gold mining companies (and I guess others) for years and cannot afford the cumulative repayment. So I think the only way Shanta gets it’s past VAT back is a similar Mining Act deal.

It is rather dispiriting how African governments so regularly shoot themselves in the foot. If that VAT had been refunded on time Shanta could have repaid its debt earlier, not been forced into the heavily loss making hedge which lost so much revenue and so would have had the internal funds to have built Singida by now. Earlier employment for the locals and earlier tax revenues for the Govt.

Interesting Barclays disclosure where they say that they see loan loss provisions in coming quarters being less than the historical run rate. Unusual for a bank to say that.