Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Given the share prics has moved substantially over the past 10 days and there has been no updatye from the company would suggest to me that it is business as usual.
Anything that the company is aware of which could materially move the share price the dirtectors legally have to report it to the market.
That includes any potential capital reorgansiation.
At this stage given nothing has been reported even though the share price has moved considerably wouydl suggest to me that it is business as usual and the company will report on the 20th Dec.
100 million shares have traded in just a few days, my guess is that the share is being played!"
Asfari with his 100 million had not sold any.
He has to be the biggest loser!
I do appreciate that cash leaves the company and shares are cancelled so on the face of it there is no gain. But if you feel the shares are under valued then the company buying shares does make sense. Fewer shares available on the market should push the price up. I do think it would be lower without the buy back. IMHO the reason the share price is depressed from where I belive it should be is beacsue of the shorts at 4.5%. They are expecting a further fall in AUM.. I think this could be another bad half but over the next year I think it will improve. Interst rates start to fall pension contributions increase with a rise in wages etc.
ABD has 1.5 bill for ii 500 mill of phoenix shares and £1 billion in cash and other assets. That is £3 billion of Assets before one even considers the Fund management of £500 billion.
I think the share has a lot of potential.
Actually they are doing the right thing buying the shares back.
It is a very cheap way of returning funds to shareholders.
In my opinion and the company's the shares are under valued substantially.
It means that more money can be paid out in the future to shareholdres.
Eventually quality will shine through and the share price will rise.
With now only 1860,000,000 shares outstanding the divi costs only £271 million a year.
ii makes 100 million, Phoenix pays a divi of £50 mill
So the comany only needs to find another £120 million on the £490 billion of AUM.
I am optimistic this share will be considerably higher in 2 to 3 years time.
Shorters are increasing because they do not believe the company has a future without a cash call on shareholders.
The Balance Sheet has about £80 million sterling of net assets at 31 december 2022.
One more year of losses and the B/S goes negative!
It is not going to be possible for a company to win and maintain million pound/ billion pound contracts with a negative balance sheet.
With a PFC market value of £300 million any cash call is unlikley to raise alot.
Where volume of shares traded for a day are low then often the ABDN share price increases dispraportionately to the market.
As I have said before I am not that concerened about this share. When the stock market improves this share will rise by a magnitude of 1.5 appox
They have been buying shares steadily over the past few months. they are now buying £150million of shares between now no and 23 December. They are no allowed to buy them all at once. It has to be over a period of time. So it is about 700,000 shares per trading day they buy back.
Without the share buybacks the price would be a lot lower.
ABDN timing on buy backs is a bit out but it does mean that the prfit the company needs to make in the future to maintain or increase the divi will be less.
They get £50 million from Phoenix in divi. £100million from profits at ii. They should be able to scrape together another £120 million from managing £500 billion pounds of assets.
I am not hugely worried about this share. I think a lot of the fall is cyclical.
The deluge of selling forcing down the share price will stop eventually. It is not all doom and gloom. The divi has been maintained so anyone with a long term holding has to factor in the 14p minimum a year they have received.
The Phonix investment is valued at 500mill the ii investment is £1.5 billion so that is £2bill in total of identifiable performing investments.
ABDN has nearly £500 billion AUM that does give them a bit of riggle room.
The adjusted net profit figure just about covered the divi for the first 6 months.
They are making progress burt it is taking a lot longer than originally anticipated.
The sector is well out of favour.
Interest rates look like they will be elevated for at least another year.
Until AUM can start to increase again I do not see this share increasing in value a great deal.
I think there is a chance the divi could be cut but I think it is low chance:
Adjusted profit (which is the main indicator S Bird looks at) covers the divi.
The number of shares in issue is falling so ABDN only have to make £270 mill to cover the yearly divi.
They have other assets and investments they could sell.
I think it will fall out of the FTSE 100 in September but when interst rates come down investors start returning to shares then ABDN will also recover.
I think at current prices it is a low risk investment with a very good chance the divi will be maintained.
Quilters a competitor of ABDN increased AUM by 2% in the same period to ver a 100 billion. Results also announced today. ABDN always blames the market sector it operates in for its failings. Others seem to mange!
It is time for the board to ditch Stephen Bird. His strategy is not working. ABDN could well be ditched from the FTSE 100 in September. Selling the Indian Investments and buying back shares does not inprove the business. It just makes the capital base smaller. The measure ABDN use of adjusted Profits per share have never covered the divi since he took over.
Something clearly is not working and I do not think it is all down to the "out of favour" sector they operate in.
https://uk.finance.yahoo.com/news/british-tech-start-success-story-142717815.html
The only option I can see is for the shareholders to sue the directors personally for not carrying out their fiduciary duties.
The payroll is running at appox £30 million a year for a company that turns over £7 million a year. I would be staggered if this company survives.
Everyone knows that AIM shares are high risk. Money was not spent by the directors to put controls in place to ensure that a fraud does not happen. Having said that a company with an audited TO of £7 million, but being valued at £900 million is crazy. I anticipate that the company will not be able to continue trading. It seems worthless to me.
If you look at the salaries of the Directors they have taken millions out of the compaany in salaries. The compnay has not been profitable for many years if ever. It survived by "talking the company up" and issueing shares and a huge premium. Live off the proceeds until the next share issue. I doubt this comany will ever relist.