Goldplat CEO Werner Klingenberg discusses dividend policy, share buybacks and the Kilimenpesa sale. Watch the full video here.
Good post army. Not posting much now as feels it has all been said while we wait.
I do feel that the single biggest piece of info missing is any clue as to what valuation the non binding offers and/or proposals not being pursued actually put on us. Quite how the BoD managed to close the FSP, state that we had offers that are not being pursued yet not give even a sniff of ball park MCAP amazes me even now looking back. Unfortunately with them not taking up the offer at shareholder q&a, it seems that ship has sailed and they wont be addressing it now.
I agree that the current SP vs sale price is largely irrelevant, but now we are out of bidding war territory, it does have a psychological impact. No seller goes into a potential purchase thinking "I've got a shot at the record for paying the biggest premium to prevailing share price EVER!" And if I were a shareholder in the purchaser it would take one hell of a lot of sugar coating for me to accept paying a company with MCAP of c.500m, multiple billions for a part of what they own.
Best way to alleviate this is for EUA to go on the offensive PR wise, and be a bit less subtle about the sort of values being discussed. This hasn't happened even for retrospective events like the now closed and finished FSP which is where all the fun and games were meant to be happening. Still time though, and hope they start soon, god knows we could do with a boost.
Pothouse I think we all know any dividend is contingent on the sale going through, and enough has been made of the old legal disclaimer that until it completes there is no guarantee it will happen. The two interesting things about this though are:
> the standard disclaimer wording disappeared from the more recent update / status RNSs
> given any dividend can only be paid out of sale proceeds, that the BoD used the phrase "significant dividend" in RNSs, means they must be confident that the sale will give them enough surplus cash sloshing around to justify not only a dividend but a "significant" one.
As that phrase was signed off by the NOMAD, it cannot be a case of them using word COULD but knowing it means, "...if the offer was multiplied by a factor of 20 (say)" similar to your lottery example, which is dependent on a whole host of things you don't control coming in. It must be at the very minimum a plausible outcome.
Whilst it would be wonderful to get the next news shortly, we are actually in open sea now. Lots going on, so potentially a news rich period, but no actual timeframes to hang your hat on.
It could be days before news, but could equally be weeks. We have nothing to point to that can tell us which. But let’s just hope the sp trend is now upwards whilst we wait. That would make a nice change!
...and since you've questioned my motives twice now in as many days, let me be clear. I care that the sale goes through, I don't care how much the dividend ends up being.
Using RedPanda's figures from last night, which was sale that sent the share price to £1.10 (so £3bn sale of what goes, plus a bit for residual interests). Suggested dividend was £1, so SP would go to 10p ex div.
Now, do I care whether it is £1 & 10p ex div, 90/20, 80/30? No, not especially. Divis are more a nice bit of PR in my books, useful but only if the company can comfortably afford it.
What matters to me is that the SP is re-rated to £1.10, underpinned by a tangible valuation, and all the naysayers who have spent literally years spouting that this isn't worth tuppence f***ing ha'penny can go p!ss right off.
Sure you would agree with me.
GFD it took all of two minutes to come up with feasible text that addresses the rule and doesn't specify exactly to the fraction of a penny how much the dividend will be.
You've obviously done some digging, so you will know AIM Rule 15 allows companies to remain as "Cash Shells" for a time pending a future acquisition or investment, either of which are viable "use of proceeds." Now as I'm not expecting all of EUA's assets to be sold, they should at the very least retain some for future investment. Exactly how much is up to the BoD, but I don't want them to promise a dividend of x that then leaves them short of cash and need to place shares shortly afterwards - that's just pointless.
Look I don't expect the timeframe to be long, perhaps a month, allowing 2 weeks for a GM to vote on the sale, legals to be signed, sealed and ownership transferred, receipt of money to occur and all the divi details firmed up and announced. As I have said before it will be how much the sale is for (at the start of the "month") that drives the re-rating of the share price, not as has been stated so many times on this board the "dividend RNS".
If they do issue a sale circular with a specific dividend amount and record date, even before the votes have been counted, then great stuff. It's not the order in which I expect things to happen.
Would I vote for it, if the BoD recommended it then yes, why the hell wouldn't I, or indeed any shareholder?
"(h) in the case of a disposal, the application of the sale proceeds;"
OK - "the sale proceeds resulting from the transaction will be used to a) pay associated fees and relevant taxes in the applicable tax jurisdiction; b) a portion will be retained to fund future company activities and c) the residual amount will be distributed to shareholders as a special dividend, details of which will follow in due course."
There you go - met without mentioning the dividend figure - I'm not saying they can't state an amount, but I'm not expecting them to give a definite figure for a dividend at the same time as the sales circular, before we have even voted in whether to accept the deal. Anyone who says they definitely will include the dividend amount is providing inaccurate information.
It will be the details in a) to e) that set a definitive value for the company's assets, and which the share price will reflect. Not the dividend amount.
Lossie with that level of annoyance and a sizeable holding already, I'm surprised you added and didn't just let your core holding run.
Anyway, we are all working on the not-unreasonable assumption that the proposal in writing we have received and are pursuing would have been submitted following DD on the part of the buyer. Would be a bit weird if it was submitted without any at all.
It's also not the BoD's job to comment on the level of DD any specific interested party may have done prior to submitting their proposal.
Sharegar agreed the last RNS definitely had a feeling of confidence that the sale will complete.
GFD I never said we would have to vote on a divi amount, no company does that as it's an internal management matter. The only vote we will have is whether to accept the sale offer. I'm correcting misinformation that people who want the SP out of this manipulated range have to wait for the "dividend rns" or that the next rns in this sequence will be dividend amount. It wont be - the proposed sale and circular is next (hopefully) and that will rerate the SP as it is a quantifiable cash figure, same as in any company takeover the SP rerates on bid announcement, not when it completes.
Dont take my word for it, look at Braveheart and the sale of RMS late last year and the order of their announcements. It took a few weeks from proposed sale to dividend, and that is normal.
RedPanda I think you've worked it out, but if you instruct them to reinvest, your share dealing broker will still receive the cash (£1 in your example), but immediately use it purchase more shares at the ex div price (so at 10p). Your account will then show your shareholding has increased rather than cash.
GLA let's see if the market reflects this at all.
Seems like it got hijacked a bit!
Confused? Most opinions I've read tonight (and since a possible divi was announced) seem to think nothing will happen until a dividend amount is announced. It literally CANNOT happen like that.
The sale has to be coted through, therefore at least 2 weeks before the cote we will be told what the sale amount on offer is. At that point, given BoD support so it will likely pass, the SP will rerate because it will basically be cash in the bank (asset).
At this stage I would not expect any definite dividend amount to be given. Because dividends can only be paid once the cash has actually been received, so after the vote and once legal are signed sealed and money transferred.
Even then I would expect the BoD to work out how much of the proceeds it is safe to pay out, after fees, taxes and keeping some in the bank for future use. So it could be 3 or 4 weeks after the sale announcement before a dividend is put forward.
Norm, the SP will continue to bob around at whatever the sale price is (when converted to an amount per share). Two dates are then of interest: record date, when at close of play whoever owns shares is entitled to the dividend for each share owned. And the ex-dividend date, usually 7am the following business day, when the SP will go down by the divi amount and your total dividend gets paid into your shareholding account (within a few days).
So a rerate of the share price is on the cards but it wont be triggered by a dividend RNS, it will be the sale announcement. That's the point I'm making.
I'd like to think everyone putting "dividend" in their posts as the next rns actually means "sale" but increasingly I'm not so sure...
Posted this a while back. People looking for SP enhancing news need look no further than the sale announcement RNS:
Any "special dividend" will be paid right at the very end of the entire sales process. After this the company focuses on what licenses assets and plans they have going forward.
Where does the dividend come from? Cash reserves.
How does it get into cash reserves? Following a sale
How do we get to a sale? The company announces what is being sold and for how much. If it's large enough we shareholders have to vote on it. If approved the bod go through legal necessities and sign.
So what comes first that would affect the share price? PROPOSED SALE ANNOUNCEMENT.
The SP will rerate when the company announce a sale that they themselves back. This will be for the full value of the sale proceeds, so if £2bn, SP goes to 70p area. 5bn? 160p etc.
It will bob around at that level until deal is signed, cash received, and dividend calculated (I'd say 50-60% of sale proceeds will end up as a divi, rest paying fees, taxes and retained for future use).
Once divi is paid out, the SP will reduce by the divi amount in the ex dividend date.
Wording leans far more towards BoD wanting to get the sale over the line (aligned with shareholders).
Confirmation this proposal would trigger AIM Rule 15 so if agreed will require a vote.
Confirmation that the sale is in the ball park that results in a dividend payment if agreed/ approved by shareholders.
Not a small beer venture.
Re Divi - first things first if/as/when sales talk gets to a finalised level, we will have to vote for it. Announcement, price, circular, EGM 2 weeks later.
That's something to look forward to!
Once passed then it's dividend talk...
A bit more clarity - proposal DOES invoke Rule 15 (sure it only previoulsy said "one of the options" out of several referenced would). And sale would result in a dividend so must be in a reasonably large ball park to justify taking money out of the bank to pay it.
Good post Ian_
Penultimate paragraph needs a little bit of tweaking
"When the Sale Price is announced it will underpin the MCap to at least that amount, and then those who don't want to receive a dividend can sell the shares carrying the dividend before the record date cut-off.
Seem a very fair way of doing things to my way of thinking?"
Very fair and agreed. GLA despite the crap SP
Last night you said "Russian companies have a habit of selling out cheap...."
I assume you have plenty of recent examples you can share, as well as why youbwere believe they were sold "cheaply"? Be grateful if you could oblige. Cheers!