Can then the smarter people here model:
I have a plot of land. Got planning permission. ! can build the industrial park and got tenants signed up already.
Rental / year will give me as EBITDA $1mil, rent fixed first 5 years of then $2m / year for at least another 25 years (ignore other annual inflation).
Cost to build the part $3mil, will take 3 years to build. Borrowing the $3m be repaid over say 5 years once we start receiving income, interest 7%.
Q1: What is the today's value of the project? Then in 3 years when completed and generating cash.
Q2: I am looking for a Market Listing, say 1 mil shares. what is the cost / share and Price / share, now, and in future?
Can you simply value this, should not be hard for 'experts'.
Lastly Q3 - how much would the bank lend against this business plan?
Thank you lots, simple answers will be appreciated.
M
Hi Andy, clearly his 3 years comment is uneducated (I guess was 'conceptual'). that will be 2022. We start production 2023. earliest Divis may come is 2024 when we wrap up (assuming no construction delays / disasters).
without trying to be 'correcting' every word in every post ... in 5 years we may be seeing div....
Once we are cash generative, CF will re-finance as much as he can of the debt, as our credit improves, and also change restrictions to enable Div payments. (from what he said before, but, this is 'intention' not 'guaranteed').
M
Andy,
Let me guess: you sold all your SXX and gone away last year.
Now you are back .... and looking at the selective comments .... do you have a short position and panic that it is not dropping to your target?
M
Hi Speedy, yes - many posters here are not invested, but are SXX specialists ...
I am so, so, so looking fwd to ST2 to be agreed and announced, as this will move up the share price (and wipe up the shorters ... anyone here would like to put the hands up to being a shorter? ...)
Then we can discuss factual construction updates, make My our best friend, Divi forecasts and ... stop bickering.
I hope...
M
Andy,
I think (but, I stand to be corrected here) that he did bring York Potash to SM in return for this number of shares...
One way or another, he did not 'issue' the shares to himself.
Big difference.
It is like a Property Dev company - I have the land, join the Company, and give the land plots to the company to develop in return for shares in the company ....
M
SXX4me,
Did Cole had GBP 25 MILLIONS of his family money invested there? ... I don't think so.
Did he build the company from scratch? I don't think so...
M
PAA
Exactly - some posters are driven here to push the SP down to get themselves a bargain.
Users of this board should do their own research and not act on what someone (including me) say on a message board.
What is the definition of the stock market? ... the wealth transfer mechanism from the impatient to the patient (is this a JPM statement? I can't recall...).
IMO
M
HI John, strong words, but in my opinion unlikely.
Looking at the timelines etc, it seems that in Q2 they started having discussions about wider tunnel (hence the comments of 'on time' but left the 'on budget' out), but not decided what / how much etc.
Q3 the decision to wider the tunnel was made, accelerated by potential 'leaks', and he said for this 4-600m that all options are on the table. Never was said it will be raised after the $3b is raised and spent... we made this 'rosy' assumption.
Q4-Q1 now, the lender discussions accelerated, IPA looks to be saying: you could and should raise debt via High Yield, we will only plug the GAP once milestones are done (i.e. if you SXX make a mess out of the construction, you pay, not the taxpayer, which is fair point). Overall, no change in strategy (just tactical execution of the financing).
With this in mind, it make sense to raise the 4-600 now as it will not carry interest and we have to do it anyway. Then we raise and spend the High Yield bond, then Commercial branch, then IPA.
It make sense - just because it is not what we would like to hear does not mean lies, fraud etc.
It is a speculative share ... for a reason.
Current Discount to Market Cap is about 80%... for a reason.... Once CF finalises the ST2, Market Cap will increase to reflect only construction risk.
This is a $30Billion +++ company.... and yes, it will have more that 4.5 b shares in issue! Like it, or not. I count 7-8 b (my guess, it is only speculation anyway).
And yes, CF shares in SXX are his family investments .... and this is not small change...
The most encouraging part is: there is finance plan, broadly agreed with lenders etc! This is HUGE! SP after this will jump.
So, waiting for the MM to trigger a blip to 15p, wipe out stop loss holders, I top up, then see you in 2023!
Ah ... forgot to add: In Stage 1, if I am not mistaken, the Total $ needed was suddenly estimated down by $400m, correct? I can't see anyone moaning at that time for the reduction in total project cost ... now it is being reversed, for a different reason, so... about where we started.
IMO
M
Kite,
I learned (the hard way) not to discount this type of comment when made with so much unknown around us...
If it does, I may change my strategy and top up.
M
Info From Morningstar.
M
As of 30 seconds ago, the listed number of shares owned by CF are123,747,368 and the value as of 30 secs ago, is GBP 25,739,453.
M
High John,
Yes, I am getting to roughly the same, using what I think are prudent assumptions.
As directional numbers, I see us getting to my/your estimate.
....Just not by tomorrow, and we will get volatility along the way.
Even at 10b shares we are OK... we just need ST2 completed to enable build funding, then construction executed without disasters.
Hence I keep my shareholding position, and come 2023, or 2028, I will decide what I want at that point.
GLA.
M
Now we will see if the Great financier CF can justify his reputation and show his experience .... knowing that both his and mine / our cash are invested here.
we will soon find out... saying this, we all expected dilution in some for coming.
M
...That long? How many 'tomorrows' are in a day? I guess we will see in the next hour or so ... lol.
Verde, you 'extra' comment in unwarranted.
Directionally, a tracker in current market, is expected to deliver more in 5 years than the SXX potential SP increase?
Is this what you are saying?
If so, why you are invested here and not in trackers / whatever else you want? ... tell us, so we all move away from 'lies' and get wiser...
Cherokee,
Yes, this is my thinking line too.
You have the option to invest in SXX, or a tracker.
FTSE 100 3% div / year, will give you what, say 20% in 5 years.
for SXX to just MATCH this, the SP from the current SP, is what, 25 pence? This is 2023/2024 when we will be selling Poly 4 (assuming no construction issues ... hence there is still risk... and so still a speculative share with risks attached!). So fluctuations are to be expected.
If we think the SP, after a massive dilution as I used in my scenario below, is 30p ... great. If there is also the possibility for this to be x multiple of it, even better!
IMO, no advise to invest here to anyone. DYOR.
M
Hi John, would be great if you can then share yours (two pairs of eyes see better than one...).
One thought that I have at the back of my mind:
with GBP500m, someone can effectively have 33% of the company... on the cheap... opening up the door for more action later. A ADM/Gina/BHP a possibility, but also the likes of Nutrien - if anything, as the largest SOP producer, if they control / acquire Poly 4, they then can differentiate their offering in the future as the only Poly4 blend supplier globally. And as they already have distribution channels, once current ToP are done, they can dominate the SOP market with a differentiated product that no other SOP producer can provide... If I was in Nutrien, I would not dismiss this avenue...
IMO.
Will be interesting how things play out over the coming month ...
M
Duracell, this is my understanding too.
Well, it will give us some more 'excitement' for the next couple of months .... before we find something else to debate once ST2 is done.
M
If I take a step back, IMO, and trying to stay factual instead of subjective or 'feel' driven, we see (directional):
* Current Market cap $1.2b, about 80% discount to when we start production.
* Once Stage 2 is done, discount for construction risk around 40%. Say 50% to allow calculation rounding.
* Therefore we should expect a Market Cap in the region of $3 - 4b.
Now, let's look at number of shares:
* With CB, Gina etc = say 6b as of now. The Question is how many shares we need to issue to fund this contingency.
- $600m = GBP500m ish. CF stated that whomever comes on board, needs to add more than just cash. So we may see an ADM, or again gina, for some more royalties for half, and equity the rest? As we don't know, this is speculation, let's assume worst case: all shares in partnership ADM/GINA/BHP etc, say 3 Bil shares.
- we now will have 9 b shares incl CB etc.
2023, assuming no construction headaches = Market cap ... $8b?, or more?
- as CF stated, in 2023 when we START generating sales / cash, we want to re-finance (cash generative business, lower credit risk, better % interest etc), plus allows for dividend payment if cash surplus.
2024/2025: $1b EBITDA... Assume Net 0.7. PE x 15, Market Cap $10b?
2028, expansion to 20m tonnes, EBITDA 2-3 bil, Net say 1.5b. Market Cap? should be around $22b. This is still 50% of what the Project CF NPV is at that time of $45b...
Shares 9 bil
SP should be around $2-2.50. Say GBP 1.50 at least.
Therefore looking at the path, on lower case, we can still go from $25cents now to $2.00 dollars. (leaving the super optimistic views out here).
Is this still attractive? But, consider that there are still risks involved along the way.
If yes, consider investing, if no, stop moaning and good bye.
IMO, DYOR. No recommendation or advise given here....
M
Hi Fred, yes, Panic is the source of wealth transfer.
If people here did not expect any volatility in short / med term, they will get disappointed. Dilution was discussed here to death. Now that is getting closer (either royalty, shares etc), we panic. Really? ...
Some would buy / sweep cheap shares, as others run ... in 5-10 years, whom was right? (I stay out of 1-2years debate).
M