Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Liro, I think you missed something - but it’s not straightforward.
4D will issue 19,783,827 new ordinary to underwrite the ADS at a ratio of 8 ordinary shares to 1 ADS. So that implies there will be about 2.47m ADS.
LOAC has 2.63m share in issue. So in the new entity each shareholder will get 2.47/2.63 new ADS for each existing LOAC share they hold = 0.94 (so effectively 0.94 ADS is equivalent 7.52 ordinary shares)
Current LOAC price = $10.93 / Fx rate = 1.316 = £8.31.
Now as above an existing LOAC share is only worth 0.94 new ADS and as such (multiply by 8) only worth 7.52 ordinary shares.
£8.31 / 7.52 = £1.105 (and voila, the closing price on this site)
To lose only 197m euro in the last six months is pretty exceptional. I’m not invested and have no spare cash otherwise I’d seriously consider getting in here.
It’s interesting that 90% of trades are automated. So basically, one algorithm competing against another algorithm to see which succeeds. It’s genuinely interesting but clearly not aligned to company fundamentals just chart and market direction. Rns will impact far more.
Given I’m expecting revenue about $402m, operating profit $75m and profit before tax about $65m to be announced in a month I’m really surprised this hasn’t recovered a bit more so far. Especially as 2021 & 22 are looking even better (currently). MC is £207m.
Over the week they are up about 10% no?
Rob, you can forget the 110p. It was just a figure to highlight the value given to the merger to 4d shareholders relative to the price today. The key is how much of the combined equity 4d shares have (86.9%) vs LOAC (13.1%). Given the expectation of a merger their price on Nasdaq now will keep in line with our price prior (accounting for the fx rate, and that we reflect 86.9% of merged equity and they reflect 13.1%).
Post merger active trading in the US will impact the uk price as well as the other way around. But at all points, before and after the merger, our prices correlate and have nothing to do with the 110p you seen quoted today; the market price will just reflect what is our perceived value going forward. So it can go can down but personally believe it’ll go up a lot.
Trendz, I take back something I commented to you yesterday. Just listened to the vox interview and DP stated they would be talking about the results for the x518 mono therapy trial - so not just an overview of the results. So I’d expected an rns before that talk (talk is scheduled between 9th and 14th Nov I think).
By the way, there’s no reason the 110p figure has to remain the ballpark sp until the deal is done.
It is the ratio of shares that is fixed (7.5315 4D shares equivalent in ADSs for each LOAC share); the 110p figure priced into the agreement is only indicative.
So the price in London can go up on news and then the price on NASDAQ will move up based on LSE price * 7.5315 * FX RATE.
The 110p figure is no longer relevant. My view anyhow.
Trendz, whilst I share your optimism for the stock there’s no evidence really for any of your timeline expectations. 14th nov is just a forum and whilst there may be new information there is no guarantee - could well just be reiterating what we know for medical industry. No way is Blautix p3 starting this year - at most we’ll get the full ‘sliced and diced’ results for phase 2. CEO has repeatedly downplayed results for COVID this year due to competing for patients with the recovery trials so more likely to be q1.
What you say could happen; but total speculation as there is no supporting evidence.
Futures prices for jan, Feb, mar are about 20% higher than spot prices.
I guess this is why they’re trying to minimise the financing required now - going forward with possibly only 80% of notes (the rest in cash now if refinancing not taken up). I expect the interest rate is high to compensate for the likely drop in the market price after issue.
But there is a cool logic to this strategy. There is no financing for business growth at the moment (this refinancing probably won’t even get them back to pre COVID levels). I’m thinking a year from now when markets are calmer and IPF is perceived as a more stable company (moody’s etc) then there will be additional financing for growth at far better rates.
Hadn’t noticed till you mentioned it. Is certainly is not typical. The 2.4m buys over 4 trades yesterday and the 4.9m sells today over 2 trades definitely stand out. Given the pricing they appear to be correctly categorised but / sell.
The rns is good news. If they’re successful on the refinancing without having to set a high coupon then the five year stable financing should boost the share significantly. Roll on 5th November (which I think is when everything is done and dusted from what I could tell).
Good trajectory in rns. Cash balances $1.5m higher than July but still $4.5m lower than same time last year. Production volumes rising which should be very beneficial when market recovers for gas (which it will).
Well, if no one is really buying or selling the price won’t move. This is fairly illiquid. Likely we’ll find a much sharper move when results announced at end of November especially given this will be giving a dividend and positive outlook.
Chrome: the avg price for year to sep 2019 was 162/t and to sep 2020 was 140/t. To sep 2019 produce 1.29mt (higher this year). So this year we’d have a revenue hit of -22 x 1.29m = $-28.30m revenue than last year for the first 1.29mt. But this year we produced a bit more and we still make a profit at 140/t so net profit impact is slightly less than say $-28m (ignoring costs of production)
Pgm: the avg price for year to sep 2019 was $1081/oz and to sep 2020 $1704/oz. To sep 2019 produced 139.7koz (higher this year). So this year we have a revenue hit of +623 x 139.7koz = +$87m revenue compared with last year for the first 139.7oz. But this year we produced a bit more so let’s say profit impact of $+90m.
Costs: Costs are mostly in south African rand whereas revenue and profit reporting is based on dollars. The average fx rate dropped from about 14.4 to 16.4 reducing costs in dollar terms by about 13%. This will also have improved the bottom line and absorbed some or all of increased localised costs.
So we should be targeting at least $60m increase in headline profits over last year. Haven’t tracked how much increased investment may reduce this. And next year ,if expected mid estimate production increases materialise and the avg price carries over then revenue up another $52m on what is a profitable business (even chrome).
It’s looking promising.