Member Info for londoner7

25% capacity. Cinemax said they would be profitable at these levels, But the expectation is 50% by the time the blockbusters open.

Cineplex is currently priced at $16, well below the $33 offer so the market doesn't expect the deal to go through at that price. We'll know more at the end of June.

I don't know what news you are looking at but States allowing cinemas to open doesn't mean cinemas will open.

Last week Cinemark outlined their opening phases:
June 19 - 5x theatres opened to trial measures
June 26 - one third of theatres open
July 3 - two thirds of theatres open
July 17 - all theatres open.

States and counties differ in their permissions. In Texas they have a capacity limit of 25%. Cinemark expect permissions across the board to move to a 50% capacity limit across all US territories. Ahead of the Telnet film opening July 17 - the first blockbuster. I believe there is a Russel Crowe movie opening July 10th.

Cineworld hasn't outlined the detail of their opening plans but I'd expect it to be similar to Cinemark's in the US.

Cineworld has said that they expect cinemas to open across all of their territories in July.

France are throwing money at Airbus. Talk of a scrappage scheme / cash for clunkers!

Trade in your Antonov AN2 (an old jump ship of mine) for a shiny new A320.

Don’t waste a crisis!

In this context I mean, that an investor should use market volatility to improve their portfolio. As I write I realise this can have several definitions. I’ll refer to two:
1) Your position today in £££ value is better than if you had done nothing.
2) Your portfolio has a better balance with dead wood removed and good growth opportunities added.

Both are important to me, but at this point only the first can be measured. Today the second is subjective but can be measured later. Therefore, I’ll focus here on the first.

Why?
I consider myself a serious and successful investor. I’ve been investing in individual stocks for decades and expect to continue for several more decades. I like to assess my abilities with a view to improving my investment decisions, but to do that effectively I need good records and analytical tools. One part of that process is to assess my decisions in extreme periods of volatility because I’ve found that the decisions I make in those periods have the greatest impact over the longer term.

However, if the measurement is only made at the end of the ‘crisis’, lessons learnt can only be used in the next crisis, which may be 10 years away. Measuring at this stage in the current crisis gives me an opportunity to review my decisions while the current opportunity persists.

How?
Very simple. I took the 1st March 2020 as my reference point (choose your own), loaded my portfolio for that date and today’s into a spreadsheet, then made adjustments to the 1st March position to reflect current prices, cash movements (in or out), and dividends paid. Check you get your additions and subtraction right and get the two big final numbers the correct side of the subtraction. In the final sum I saw mine as negative, before realising I’d made a mistake – phew!

Conclusion?
To be clear, I’m not saying my portfolio is ahead of the 1st March position – it isn't – only that I’m in a better position than if I’d sat on my hands.

The biggest surprise for me was how small my overall adjustments were. Although, I’d totally closed some positions, opened others, and adjusted the stake level in most, it appears there were many more trades performed in my head than actually enacted. So, not wanting to waste a crisis I’m doubling down on those decisions that have worked.

As a rule I don’t comment on my trades or holdings so in the same vein I don’t propose this as a competition. Just an exercise that might be of interest.

The Times reports that the remaining $115m is contingent on oil prices returning above $55 a barrel. Yesterday's RNS doesn't mention $55.

Does anyone know the detail of this contingency?

Is it as black and as say, oil being above or below $55 on a certain date (30th Sept 2020?), or is it phased in some way? I'd assume the fact that The Times refers to $55 suggests the detail is in the public domain.

January2,
We’re all good socialists up here and follow the rules. We know that pictures of a crowded Portobella Beach, or George Square, is English propaganda aimed at stirring discontent with our leader’s demands. She deflected yesterday’s Yorker from Rolls Royce (700 Scottish redundancies) with a straight bat. Yes, we will no longer build jet engines, but our great manufacturing facilities have risen to the task of combating coronavirus with the production of mask and gowns, and, take this, they are being exported to England. Elon Musk, watch and learn!

Last week our construction industry was ‘opened’ allowing site preparation activities to begin in accordance with the guidance produced by our leader working hard to reopen Scotland for business. Guidance for other sectors will follow in due course. Our leader is a finite resource.

Construction site preparations will be reviewed over coming weeks by our health and safety committees – to be elected. STUC general secretary designate Roz Foyer said: “We demand and expect that, where an employer does not currently recognise a union, it is compelled to agree terms for union engagement, and for the admission to sites of union health and safety officers.”

The day will come when a brick is laid, and a shovel grounded. Patience, the homeless can wait.

You may have your open castles and dancing in the streets, but we have Rishi Sunak’s cheque book.

Long live the Union but say it quietly.

OT as it’s quiet.

Hi Pelle, we’re still pretty much in lockdown in Scotland, so while fishing was opened up last week I can’t travel more than 5 miles. I live next to a large loch but it’s fly only and I’m a coarse angler. I tried out a local canal. A passing local asked if I’d caught anything. I said, “No, I’m not even sure there are any fish in here’. He laughed and said, “I was about to say the same. I’ve lived here for 5 years and you’re the first person I’ve seen fishing.” I had to try it out. I could have unearthed a hidden gem.

Yes, I’ve been fishing, but as you know it isn’t all about catching fish. Being one with nature is a big factor. Although putting bait on my hook was the peak of optimism.

A true fishing tale. My local l loch has opened up to the fly anglers fishing from boats for trout. Normally, they fish 50-100m from shore but yesterday I saw one only 15m out casting back towards the bank I was walking. I stopped a few meters short to watch. The angler cast a fly to within 5m of where I was standing and within a second of the fly hitting the water I saw a trout take it. A minute or two later it had been landed in the boat – it looked about 2-3 lbs. A nice fish. He said it was his 15th from the same spot. I peered into the water and could see a dozen or more fish some much larger than the one he'd just landed.

Some days, screw nature. It is about catching fish!

There's some positive customer support for the suspended 737 MAX . This is an important aircraft for SNR, and may be a factor in the current SP rise. But another factor in the 737 MAX recovery struck me.

Talk for some time was on, who would get back onboard a 737MAX?

No doubt its return to service will attract some headlines, but I suspect issues around coronavirus will push those headlines and I'd guess the associated fears into the background. Production was suspended earlier this year but I recall a news item a week or two back saying it had restarted at a low level. Ramping back to full production takes some coordination but the numbers could look good a year from now.

Still awaiting clearance from the regulators.

An interesting piece on CNBC by an aerospace analyst.

We know about the pandemic's impact on the airline industry, leaving a large part of the fleet parked up in the desert. He expects the suppliers to the after market sector to feel the heat, while suppliers to the new build sector will fair better. The logic of his argument sounds reasonable.

As airlines bring aircraft back into service they will favour the newer aircraft that have lower servicing costs. Many of the older aircraft will never be brought back into service as they are replaced in the operational fleet by new aircraft. Many of the older and larger models which supported the 'hub' strategy will also be left out. Passengers prefer point to point rather than transfers, which supports demand for the new twin engine models from Boeing (737) and Airbus (A320).

The whole of the aerospace industry has taken a hit but some sectors are affected worse than others. The new build sector is expected to outperform the after market sector.

Senior supplies the new build markets. Boeing and Airbus are tough and persistent on pricing so no freebies. A tough market - Senior may never again see those 13% margins - but they are operating in the right sector. At some point the after market sector may be more favoured but probably not for several years.

Jega, there's nothing wrong with placing an order out of hours but always set a limit price. Otherwise you could be exposed to a wide spread on opening. If you place an open buy you get the open price. There will be limit sell orders out there and if its an illiquid stock you could get wacked. If fact its so dangerous I'm surprised an account would allow it. I don't know, not something I look at.

I often use limit orders but only when the market is open and valid for the day. It's a good discipline. I've heard people on these sites posting their buy in price (as if anyone cares) without actually placing the order, then bottle it when the price is crossed, only to cry when it runs from them (again as if anyone cares). Whether you're a trader or longer term holder you should understand what represents a suitable price based on your assessment of the stock. If you cant make that assessment you shouldn't get involved.

Hi Pelle, I just don't see how any realistic estimate of CapEx to end of April can be made. But your number sounds reasonable.

I guess it comes down to how you wish to monitor progress.

I've chosen to judge my investment on the $25 guidance versus Brent oil, passing on the more detailed spreadsheets I maintained last year, though I still keep a careful track of the production numbers. The fuller exercise wasn't wasted because I learnt a lot about ENQ financials. I do similar spreadsheets for many of my investments but each has it's own characteristics. That said, I've learnt not to put too much weight into my investment time in any investment. No comment on ENQ here but time invested shouldn't bind you to an investment.

I hope that ENQ continues to offer FCF point guidance . Much as we might think we understand a business we can still miss stuff.

Incidentally, at the interims ENQ will have a view as to whether they are running ahead or behind that guidance, much like the production numbers, I suspect they will maintain the numbers on the basis that if they are behind they would not want to disappoint only to perhaps recover the situation later, and visa versa.

Hi Pelle, thanks for expanding.

On this point, "To make new debt reduction from 1364 mill , oil needs be above 33+3 PIK." I don't think you can make that assumption., because you don't know what proportion of CapEx had been made at that date. That's why I've worked from the simple $25 guidance after April. I don't know the level of CapEx still due but ENQ does.

In the second point, "In the first post you made it sound like if oil at 40 in June, FCF will be 25 mill in June." In essence that is the point I'm making. If oil stays at $25 over the rest of the year (Apr - ) then FCF = 0 (ignoring PIK). I was taking as an example, one month at $40 adds c$25m to the FCF=0 position.

Using your approach, if things so as guided, you should have a c$30m pleasant surprise on the outcome. But in practice I expect that to be hard to verify with other noisy factors. Q3 is essentially the maintenance period, with production higher Q4 (approx. +10%). It will help if the oil price aligns with production, i.e. at its highest levels through Q4.

I hope investors caught the call. If you didn't a replay will be available later.

Operationally, the read across from Cinemark to Cineworld's US market is very strong - timing, capacity, pricing, etc.

They covered every point and question I had in mind and a lot more. Impressive, and leaves me encouraged about cinema's position July onwards.

I don't know if Cineworld will present something similar. No opportunities in the calendar in the coming weeks, but I'll settle for what I heard today as a template for what I expect Cineworld to do, both in the US and in other markets including the UK.

Interesting that states and counties have set specific capacity limits, e.g. Texas currently 25% but expected to be 50% by 17th July coinciding with Telnet's expected open. States vary but all expected to be around 50% mid July assuming no change in the current pace of re-openings generally.

Hi Pelle, I'm not clear how we differ and I'd like to understand. To recap, this is my understanding of what ENQ has guided. Pls point out any area than concerns you.

ENQ guided a FCF position based on $33 average over the full year 2020 taking account of hedging in Q1 and subject to achieving plans, I guess around reductions in OpEx and CapEx. Based on the mid-point of the 57K-63K boepd production guidance. This assumes PIK on bonds during 2020, which reduces interest charge in 2020 (c$68m) but adds that charge to bonds due in 2022/23. (This last point was confirmed to me by IR). At 60K production this PIK equates to $3 bbl. Also, I believe ENQ would take account of anticipated Kraken premium in estimating the FCF point. I would so I'd expect ENQ to do the same.

At the end of April ENQ modified the FCF guidance to $25 over the remainder of the year. Hence my calculation - if oil averages $40 for one month then that adds c$25m to the FCF =0 position.

We have not been given any CapEx spent to date number so I'm wary of say, extrapolating from the cash position end April.

What do you consider misleading?

Investors here may be interested in the Cinemark Q1 conference call starting in five minutes (13:30).

The Q&A might be interesting.

https://ir.cinemark.com/news-events/ir-calendar/detail/7375/first-quarter-2020-earnings-conference-call

Hi Pelle, I agree with your post. Have I said something different?

Just to clarify my c$25m per month current number (can't be taken to the bank but I think serves as a rough guide)

$(40-25)x 60K x 30 = $27m

I assume you mean yesterday's RNS.

Key points on the facility (if used).

First, all businesses that wish to draw from the CCFF for a term extending beyond 19 May 2021 will be expected to provide a letter addressed to HM Treasury that commits to showing restraint on the payment of dividends and other capital distributions and on senior pay during the period in which their commercial paper is outstanding. These commitments are intended to create incentives for, and promote the ability of, businesses to repay their borrowings from the CCFF where they mature after the Facility is expected to close.

Second, businesses that have drawn under the CCFF are now able to repay their drawings early if they choose to do so. This gives businesses greater flexibility to exit the Facility in an orderly way where they are able to access alternative sources of funding, for example in capital markets.

In addition, following detailed consideration, HM Treasury and the Bank have decided to publish the names of businesses that have drawings under the CCFF, as well as the amounts borrowed. This change will make the scheme more transparent and enable participating businesses to demonstrate their access to the Scheme. These details will be published by the Bank every Thursday, beginning on 4 June at 15:00hrs (GMT).

HMH,

Yes, CP do still have 7.5% in Clair (as of Dec 2019) in spite of selling a significant chunk to BP. The gross pricing I posted suggests a value on that 7.5% holding (Dec 2018) at c$800m. Will that become available? Who knows. This trading of assets reminds me of the trading of cards in a game of monopoly - swap you Old Kent Road and Coventry Street for Mayfair - always worth testing the market.

FCF breakeven is currently $25 so at current oil pricing ENQ could be adding c$25m per month. Before L3 pulls me up I assume this is after payments to the OZ loan ringfenced on 15% Kraken and BP's profit share on Magnus. But those in themselves are bringing down gross debt and contingencies. Looking good.

Cash, positive cash flows and now limited CapEx - long may $40+ oil last.

But on the 'cash and available facilities' number, remember this includes credit facilities c$70m, and (as of Dec 2019) $74m of ringfenced cash. I don't know what the last element is now (interims will provide the next update) but I'd guess current available cash is c$150m ($144m Dec 2019).

$65m of the term credit is due April 2021, with the balance due in the autumn.

AB and JS are focused on paying down that debt. If a Regent Street comes up at Vine Street pricing AB may be tempted - he has show he can work out a deal in tough times. But Oct 2021 looms, and I still expect news on this matter in 2020.

I know I'm repeating myself, but I'm looking towards those licence awards due anytime. ENQ will have made their applications with specific objectives in mind. I'm keen to hear the outline bit I's expect those announcements to be a 2021 or later event.

* back to SVT. Sapperno1 comments sounds positive - a maintenance or possible expansion of the usable tank capacity. BP expansion of their 4 dedicated tank holding, or perhaps ENQ want their own tanks. I note ENQ account for c75% of the supply from the Ninian pipeline, with CNR making up most, if not all, of the balance. With the demise of Heather I don't think ENQ has any interest in the Brent pipe feed in. Okay those CNR assets are more Euston Street than Park Lane, but we know that's where AB like to play. I knew there was a story here ;-)

Thanks Sapperno1, I think we can weave a good story around that information.

But beware Therapist's comments, "If you happen to find". Any hint of an odour of Johnson's baby-oil, run, save yourself.

Tank #9 if memory serves!

Sapperno1, thanks for your input. A question or two.

If I have my numbers right, with 4 tanks dedicated to Clair. I'd guess that another 4 storage tanks would cover non Clair needs, which leaves 8 spare tanks.

Do you think all 16 tanks are generally in service with, say one coming out periodically for repair/maintenance, but perhaps three on this occasion?

Do you think that the 3 tanks you're working are tanks which had been off line and are now being brought back into service?

Cheers.