Member Info for LLucan

Nothing in the budget on FOBT. It would seem a delay till the summer. I think it will be hard for the chancellor to give up the tax income.

There is far too much talk of jam tomorrow in the report. The projections for 2017 look stretched. I will give him one more year but if not a substantial improvement in revenue and profit that will be it.

Which ever way you look at it from contracting income to a pretty meager profit, the results are not that good.

Good point! My guess is that the government will make a decision on FOBT's at the March 2017 Budget. To be enacted April 2018. Obviously the share will react north or south depending on what is stated.

This is very interesting: https://iea.org.uk/wp-content/uploads/2016/09/FOBT-Briefing-PDF.pdf

I think you are right. There has been some massive corporate purchases recently Nearly 25% of the stock is held by 3 organisations. The government gets 25% tax from the FOBT machines. I am not convinced they will give this up. So I do not think the government will do anything at all. Leave as is. Too many betting shops would shut down if they reduced FOBT machines.

I think Barclays may be talking the share down so they can buy more. I have a lot of confidence in the management and direcetion St Chart is going in. I suspect when Bill Winters took over there was a bit of "Kitchen sinking". I would think they will make 1.5 billion pretax this year. Enough to pay a small divi, may be 10p. 3.2 billion shares in issue so it would cost them circa 320 million. If BW is projecting 8% return that would be 2.6 billion profit. If I was going to invest for the medium term it would be in a far east company which effectively is what ST chart is. I do not expect a sudden surge in profits but I would be staggered if BW does not go for steady planned increase. The bank is undoubtedly under better management than Sands (who was way out of his depth) and is is a much stronger position even now. By 2020 if the bank is making close to 3 billion pretax the share price should be double what it is now. My point is that I have every confidence in BW to pull this off. He has got a quality opportunity in the best region, at the moment, in the world.

They are hoping the price will fall so they can pick up the shares cheaply for themselves. I ignore what brokers suggest.

The Pension deficit is over £200 million. A third of the value of the company! This would put anybody off buying the company. The company is not moving into any new markets and the ones that it is in are contracting. I do not think it is in a lot of danger of going bust but the company share price is not going to fly either. Until the pension deficit comes down I doubt we will ever get back to £3 a share!

Yes: The B shares are the ones to buy if you are UK based. RDSB.

The dividend has not been reduced or cut since 1935! I am doubtful that it will be cut this time around. It is going to be a very big black mark against a CEO's name if the dividend is cut. The company has still got good cash flow and it is shelving projects. The divi takes about £2.7 billion per year to pay.

Royalty related income of £1.9m in Q3 2015 (Q3 2014: £0.5m) despite headwinds in the price of commodities Royalty related income of £5.7m for the nine months ended September 30, 2015 (nine months ended September 30, 2014: £3.0m; and FY2014: £3.5m) Successful completion of longwall changeouts at both Kestrel and Narrabri in the period, leaving full year production targets unchanged Positive developments for the Group’s Narrabri and Salamanca royalties Cash and cash equivalents of £3.6m as at September 30, 2015 (June 30, 2015: £4.0m) Total quoted equity interests valued at £7.4m as at September 30, 2015 (June 30, 2015: £6.5m) Borrowings of £8.6m as at September 30, 2015 (June 30, 2015: £2.6m) Net assets of £161.4m at September 30, 2015 (June 30, 2015: £171.0m) The thing is it is going to take £6.8 million to pay a 4p interim dividend. Borrowing is already £4 mill, more than last year. I have grave reservations about them being able to make £14 million pounds a year cash just to pay an 8p divi each year. That is without any re investment in mines. Sooner or later without more investment royalties will come to an end.

http://www.mining.com/rio-tinto-to-close-queensland-coal-mine-if-extension-gets-rejected/ Mining giant Rio Tinto (ASX:RIO) will have to close its Kestrel coal mine in Queensland, Australia, unless the government approves a long-sought extension request. The operation, Rio's only underground coal mine, was granted an expansion permit in 2013, which was supposed to add 20 years to the mine’s life. However, it seems that the company can only achieve that if Australia lets Rio extend it onto a lease that is not yet approved for mining. In its submission, Rio Tinto said it has no alternatives.

Someone just sold 2.6 million shares. This is most unusual.Todays volume is now 20 times a normal days volume!

I will play bad cop.: 75% of the companies income is coal related. Most of that current income is due to come from Kestrel. The output for Kestrel and the block of land they mine is is not in APF's control. We do know that the sales price of coal continues to fall fell (7% last month) thermal coal now $58 a ton, coking coal about $68 a ton. The same price as 10 years ago. So I cannot see income being more than about 10 million for the year. Not enough to cover the dividend. 2) There is not much money in the kitty to do deals. I think they had 30 million available in OD facilities. If this was invested with an immediate return of 9% which would be good, that will only give £2.7 million. So I just do not see APF having the ,money to do any large deals. 3)Ideally they need to hold back some of the royalty income to invest in more deals but under the current policy they are paying out more in dividends than total income. 4) As for net asset value it is not cash flow.

I think it is more likely to be a cut than a scrip issue. A scrip issue makes the problem of covering a dividend worse the following year. Looking at the mines that pay a royalty currently I cannot see how the current dividend and future investments can be supported. Having said tha6 a 5p divi on a 70p share price is still good if it can be supported. A 5p divi would only require 9 mill of income.

I am thinking aloud now: Most of the income of APF comes from Kestrel in Australia coal.; The directors keep promising an uptick in income but to date no joy. Given there has been a flurry of director purchases I suspect this second half is much better. My estimate is that the income this year in total will be about 10 million. Not enough to cover the divi. The divi is unlikely to be stopped completely but it could well be cut. Personally I think most of the bad news is already priced in so I would not be surprised to see a bounce of todays low.

It seems to me that the company will; struggle to pay a dividend at all soon. 170 million shares in issue. 8p a share dividend has been promised. So it needs at least 14 million pound income a year just to pay the dividend. China is cutting back on coal for steel and energy in a big way. APF is very reliant on coal. Looking at the cash flow and sources of income the company is unlikely to be able to generate sufficient income to pay a dividend and make investments for the future.