Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
While this morning's meeting was particularly short on enthusiasm, I came away reasonably positive. I felt that during the formal part, all of the board were strictly keeping to a set line - and it showed. However, the board and some of the execs were very open and more than happy to discuss the company over coffee afterwards. Total of 10 shareholders, 5 BOM, 2 execs and 5 advisors attended – which is probably a reflection of the sense of disappointment and lack of enthusiasm among shareholders.
When Tom Mackay started taking he referred to the 11 years since the Farm Out was agreed with ARA, and did thing that at least he knows how the shareholders feel ! (although he did correct himself)
I felt that for once the board were honest and pragmatic, with a couple of takeaways for me:
1. Tom Mackay was particularly approachable and didn't pull his punches. Without being overtly critical, his discussion of previous management was less than ecstatic and felt that their ability to deliver on commitments and particularly the management of expectations was poor.
2. The outstanding debt of $7.6 million ($3.0m net) is far from settled and under the current legislation and resort to litigation must be done locally – ie not London, Court of Arbitration etc
3. While remediation of KN is planned – clear that without a settlement of the above debt Aminex will not undertake this – such remedial works will take c.4-6 months was my understanding
4. Unlike in previous AGM’s there was a huge reluctance to make specific commitments on dates or portray an upbeat sense of (unrealistic) positivity - while many people want to hear exciting positive comments, I feel more comfortable with a management team that are realistic, pragmatic and understand what they need to do
5. The long-stop of 31 July, is more of a guideline and is not a hard date – it is dependant on TPDC/Govt so don’t see this is a major achievable milestone – IT’S NOT. ARA/ Ola Fjeld made the point that if licences/permissions not in place, no reason not to extend the date
6. The role of ARA/Eclipse is critical to the company’s future – as the E&P junior sector is currently on life support, ARA is very much our life support – the board (John Bell / Tom Mackay) were particularly deferential to the ARA representatives.
7. The aim of reducing costs is very real – a very interesting point was that in 2017 AEX carried out an executive salary benchmarking which recommended major salary increases – however due to the changes in our company our peer group / market cap etc is materially different and we are substantially out of alignment with reality…..reducing salaries is far more challenging that increasing them and will require additional options to compensate – that’s you and me in other words !
Sorry for meandering all over the place, but these were my initial thoughts – I’m happier to see realism in charge rather than unadulterated and unfulfilled optimism – I believe in
With only 7 people here and less than 10 minutes to the start.....not expecting a long drawn out meeting.
DAVY Stockbrokers: It has been a busy year for Amryt, with substantial progression reported across its three pillars of growth: its commercial asset, Lojuxta; its epidermolysis bullosa (EB) pipeline; and new in-licence opportunities. The extension of Lojuxta’s IP ascribes further value to the product – we now think the value of Lojuxta alone could equate to c.21p. Factoring in Amryt’s lead development asset, AP101, this provides significant upside optionality and informs our 42p price target. The next major milestone expected is AP101’s Phase III trial data for EB, due in Q4 this year
Solid company, strong set of results and seem to be the flavour of the month at the moment. Have met management team and seem very focused on what they want to achieve. Do not appear to be investing in early stage companies so some risk mitigation here. Bought in about 15 months ago in the placement at �3.24, so not unhappy at progress to date. All updates and RNS seem to confirm that they are doing what they said they would do. The general environment and investor appetite seems to underpin this for the foreseeable future
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