focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
There is zero chance of a takeover - CEO owns 51% of the company.
So the new liberum note makes great reading especially the bit about "if we assume £32m of FY 23 net cash and add £50m for the collateral unwind, and deduct a £20m buffer, we expect that c. £60m of cash is to be utilised or distributed, depending on the Group’s capital allocation policy. We speculate that a £20m special could be paid."
That's a £1.15 special dividend if it happens ....
Yes that's what I took away and Liberums broker note states specifically that £40m is expected in H1.
We have seen the share get traded regularly over a £2-£4 range over the last 12 months. It is no surprise as if you are not invested for the long term and just looking for say a £1-£2 profit per share then YU delivers regularly. We are seeing low volumes the last 2 days and with a fairly illiquid share it doesn't take much selling to bring the price down. Either in the run up to a TU the price increase on expectation (as it did in Jan 23) the traders then sell and buy back at the lower price ready to do it again when new investors come in on the TU. This time round it was traded in the run up to the TU, price came down (traders buy back in) and when the TU comes out new investors arrive, price goes up and traders sell out and make their money which in turn brings the price back down. Its what markets do until there is a serious updated with new information which attracts a larger number / new category of investors. I had hoped that the TU for 2023 would have been good enough to attract significant new investors but it doesn't look like yet. So as a long term investor in a quality share I hold and wait. The next news is likely to be the FY23 results in mid march so we may go up and down until then, who knows. The one thing I am confident of (IMHO) is that when the right announcement comes out then this will go up very quickly to a new base level, what is is anyone's guess but at that point I don't want to have traded any of my holding, which is why I am happy to sit and watch.
Nice summary of the last few years and will help exposure.
Yep the 17p figure from Liberum is FY dividend, so my take is that's the lest they expect... but who knows.
The only reason for a special dividend is to allow for distribution of spare cash whilst sticking to a "progressive dividend" policy to increase YoY. Allows extra wiggle room.
ROC - your probably closer to the correct figure about £29m, was lazy and based it on the FY TO - my bad.
Pretty much the same thoughts on the free cash pile - PR mentioned he wanted to hold back £20m as a reserve in the video call last October so that would be the minimum they want as a buffer but that still leaves a truck load of cash and will be really interesting to see. As I said I would be disappointed if the final 2023 divi is not 20-30 p given the cash and then agree probably that H1 24 is the time for a more substantial distribution in line with Gervais Williams expectations.
Liberum note is through research tree only as far as I am aware - and yes its £8/ month but you can sign up for a free trial for 7 days and have the subscription for just 1 month at a time if you want. I prefer to read the articles myself rather rely on 3rd party info and the £8/month is a drop in the ocean in terms of investment costs really. Its just frustrating that the house broker takes that approach.
The Liberum note is well worth the read, it's a shame it's behind there paywall.
I have always wondered how much more/if any info the brokers have, but they were pretty spot on with the Jan update after the year end TU.
The one thing I am hoping for is an larger dividend than the 17p suggested in the note. With a "large tranche" of the £49.8m held as collateral due back in H1 they gave a lot of spare cash to deal with. I would be happy with a 20-30p FY23 and then a special dividend in mid year pre H1 to distribute some more of the cash.
A 20p dividend would only be circa £3.4m and they are estimated to have made £1.6m in interest alone last year.
As with all of us none of us know exactly what will be done, circa £35m will be needed for the ROC payment but that still leaves a sizeable £40m+ chunk of cash.....
TO £ 668m
GP £101m
Bad debt 3.2%
Opex £35m
😜
Revenue £454m
GP £81.8m
Bad debt 3.2% (down from 3.5%) but note maybe lower as cash collection is 98%
Operating Expenses £26.2m
Liberums (their broker) Target price is 1676p which I think is on the low side but we have never got to it yet..
They also expect that £40m of the cash held on collateral to unwind in H1.
Very nice TU, above market expectations and the new Liberum update is out as well with some other specific numbers in their forecast.
Target SP - 1676p ( a bit low in my opinion but they calculate it using a DCF using cautious assumptions and a WACC of 10%)
FD EPS - 172
Estimated dividend - 17.2p FY
Meters - 53k
T/O - £454m
PBT - £41m (£1.6m in interest)
Still reading but pretty much in line with my expectations and well above the previous market expectations.
Very similar to my hoped for top end numbers. I am optimistic for a special dividend unless they make a very clear statement as to what they plan to do with the cash pile.
I would certainly buy in at £5 as YU would be trading on about a PE of 1 🤣🤣🤣
Indeed, it's funny when people turn up and post crazy comments like that.
An interesting post, but with contracted 2024 revenue forecasted (by Liberum) to be in excess of £500m (I am expecting closer to £575 but have to wait for this week's TU) not sure how your valuation stacks up, but I guess everyone has their own opinion.
Thanks SNN for sharing, may explain some of the buying interest last week. Will be interesting to see if it brings in more buying next week and as we know with such a small free float doesn't take much for his article to be self fulfilling.
@craig, having taken a quick look, there are only 177 reviews - by year end YU will have 60k meters.
Assuming google reviews are mainly sole traders / small companies - accounts for 0.003%. As wee have bad debt of 2% I would expect a fair few more upset non paying people.
Trustpilot where reviews are directed and verified is a better source of information in my opinion.
HNY everyone and here's looking forward to a cracker.
@Gacky - I would be really interested in why you think the company might do a share buy back as the shares are pretty illiquid at present. Apart from that everything else makes sense to me.
Tend to agree with you (again) SNN, if we haven't heard anything by Dec 7th then it will be January. As I said last month, we have an exciting few weeks left to year end. My current thoughts are TO in the region of 450m with £34.5m EBITDA but would be really happy to see it higher.