Member Info for Peterson

Rugs. I take your point. And I hope you're right. Let's put it this way. If I knew there was a potential exit at 1p or more in the next 24 months then I would happily bung in a bit more. I still think the fact that they having waited so long and with the benefit of insider info so many of the Directors are willing to exit at 0.5p doesn't send the best signal. Where they live doesn't really have anything to do with it in my view. But yes, Youval is still there. And to his credit Aristide is buying more. Still not a good look in my book. I suppose all we can do is wait and see

Well, after the mild optimism of yesterday's news the usual DKL kick in the teeth. The Directors have dumped half of their own stakes by way of a sale to Aristide at 0.5p. Ask yourselves why would they do this if value creating M&A and / or a sale at 1p+ was just around the corner. In my mind for the Board to essentially panic en masse without giving the same option to public shareholders is absolutely disgraceful. Have they not a shred of honour or fiduciary responsibility? And the ridiculous spin about aligning Aristide's incentives. Well, he can just buy shares in the open market if he wants a bigger stake. No reason to tap the Directors. And I'm not even mentioning the usual dilutive fees for shares bonus. For better or worse at least it feels like the curtain call on this very sorry saga of value destruction cannot be far away. Will it be a wider offer at 0.5p (one can dream at this point) or dilution into oblivion I will leave you to judge

As an aside from today's shenanigans, and assuming they survive the next 12 months, they desperately need to do a share consolidation as a next step. 1.2bn shares and a sub 1p SP is ludicrous for a micro cap and smacks of complete farce. A '1 new share for 100' old shares swap would help the optics i.e. 60p vs. 0.6p. Just add some dignity / seriousness to the proceedings, and make the company look a little bit less like the archetypal penny stock joke from out of the 'Wolf of Wall Street'

Agreed HarChris. The only other upside I can take away is that Insiders did at least (at last!) put some meaningful incremental money to work. No one does that when it's the end. On the downside the scale of the dilution has obviously massively capped upside for us poor 'outsiders'. By my crude math if I take the current Enterprise Value of c. £30m, of which the bulk is debt even post raise, and assume that this raise gives them the bridge to start paying that down. And assume that all the debt does eventually get paid down. Assuming no change in rating and you are looking at 2.5p. That's taking the new NOSH and an EV of £30m. Assume some re-rating as debt gets paid down and risk falls, cashews matures, etc, and you can potentially envisage... 5p?? And that's if all the stars align: weather, local politics (this is Africa). And any capex / new projects limits debt paydown. As has been said downthread the risk must be that Insiders take this private if any of the above actually comes closer to reality, snatching even that 2.5p from those who are prepared to wait another 10 years - as HarChris says it's 2027 before they can even start to pay down debt. All in all a very sorry saga and has certainly put me off for live in investing in small caps / and certainly EM / commodity small caps. Personally I'm not selling at these levels. I have written it mentally down to zero and any upside from that is a bonus, even if that is a 1p cheeky bid in 6 months time - to better align incentives and opportunity for all stakeholders lol

Ha. I was wondering exactly the same thing. Perhaps it is because they announced their results after hours on Friday instead of the more usual 7am, and there is a rule that shareholders must have sufficient time to digest before trading recommences. Hence the decision to lift the suspension today instead of yesterday. Either way it is all theoretical now. Nice to see the shares marginally up this morning

Perhaps a knock on from WPP’s (poorly received) results and their message that marketing budgets remain very tight. All that said the general small / mid cap market is just so weak right now. Feels like there are no marginal buyers out there. So many stocks trading at silly valuations

The crazy thing is that MPE is trading at a premium to NAV and AEP is trading at a huge discount. Hence the former clearly shows the value opportunity here. If only AEP followed the equivalent shareholder friendly policies: share buybacks, a commitment to a rising dividend, above all a special dividend to share out some of the massive excess cash pile, the re-rating potential would be huge. This should be trading at least a few hundred pence more. I keep hoping that one day the penny will drop for the owners about what needs to be done here

Stockpig. I think you're right. I'm sure a mix of higher inventory, capex and a larger cash buffer is contributing. I wonder if they are also becoming a little bit more 'corporate'. Outside of a few FTSE 100 giants most companies pay two dividends. There is a small but tangible admin cost to effecting dividend payments via a company's custodian. Hence a marginal preference for fewer payments. I can't help but notice that in the 2021 and 2022 calendar years there were 5 payments. In 2023 that fell to 4. And so far this year we have had 3. I may be wrong but I suspect the days of more frequent, smaller payments are in the past. And not just because the company has grown. Bar one outlier last September all recent payments have been 100p or more. I suspect this will be the trend going forward. They could probably give us 50p today. And, say, another 50p in December. Easier for everyone to do a single bigger payment. Just a theory

Ha. True. Just a shame no dividend announced in parallel. If you look back the last few years there has always been a dividend announced with the September trading update. To be fair it’s so GAW. Just when you think a pattern is emerging they upend expectations. I’m sure we will get at least one more dividend before the end of the year. My bet October for payment in late November

Absolutely all fair. And yet what is the catalyst to get us from where we are to the theoretical value? We have a 51% anchor shareholder that seems absolutely in no hurry to do anything. For whatever reason (local taxes?) they are not even keen to extract surplus capital from the business. No wonder the share price continues to drift down. We are back to a share price that was on the ticker in 2010. Like you I am hopeful that in the Mid-term there will be a closure of the huge gape between the theoretical value and the SP. But based on the management's behaviour we could be waiting a very, very long time. In a market focused on quarter to quarter progress that's a huge ask. And with only a (miserly) annual dividend payout in the interim that's just not an attractive picture for most investors. Hence the huge value delta between MPE and AEP

What do you mean? Indonesia is not Nigeria. There is an active conversion of local currency to dollar. No blocks from their central bank as far as I am aware. Rival MP Evans clearly has no issue in this regard. They could do a huge special dividend tomorrow to make for a more efficient balance sheet. They choose not to

So. Interims announced. And the operational result was really not too bad. But all in all very, very frustrating. And here I'm of course thinking of the dividends / share buybacks. Or rather their absence. I naively thought that the Board was at last 'getting it' i.e. there was a desire to emulate the success of MP Evans by enacting shareholder friendly policies. Hence the progressive dividend policy, the share buyback programme, etc. I mean as at Friday's close they are sitting on an effective 40% discount to book. When you add in ST and LT investment to cash they have over $175m of liquidity. And the response to this is to cancel the interim dividend which was costing them roughly $5-6m i.e. peanuts. And remember that's having already bought in nearly all the minority stakes. There is prudence, there is keeping some powder dry for bolt land / corporate acquisitions. But $175m in a company with a market cap of not even £250m. That's absurd. To me that's a clear signal to the market and minorities that we don't care about what you think, we don't care about the discount. We see the success of MP Evans of what can and should be done. But again we don't care. I really don't know what to think. Is this softening up long suffering minorities to take the company private on the cheap i.e. here is 850p. Yes, a discount to book but at least you get some premium. If that's not the case then it seems a deliberate own goal. Or perhaps MP Evans should take them out on the cheap the other way. Just seems utterly absurd to me. Would love to know what the Board and anchor shareholder are thinking. Anyone else have any ideas?

After his herculean Director buying efforts Michael Lindsell has finally crossed the 5% ownership threshold. If only more Directors were so assiduous in eating their own cooking. Jokes aside its nice to see a tangible expression of faith not just in the Trust but in Lindsell Train Limited. I haven't run the maths but his buying at the LTI level will obviously go some way to counter his voluntary dilution at the LT ltd level - as more of the business is transferred to the next generation. LTI itself is obviously participating in this transfer. Still, given his direct sizeable remaining participation at the LT ltd level he obviously doesn't really need to top up at the LTI level. I take the fact that he chooses to actively re-invest at the LTI level not just as a signal of it being the 'right thing to do' from a PR perspective, but more importantly that he sees the significant value in the hard discount on offer, as well as the even greater discount when you factor in the (temporarily) depressed values of not just LT Ltd but also the likes of Diageo. Michael, I salute you. If only I had the financial fire power to follow in your footsteps I would be right behind you

Sounds like no one did make the AGM. Or if they did they’re not sharing on here any more. Guess we will have to wait for the end of September interims for a proper update. Here is hoping there will be some (good) cash news by then…

I have no connection to him but do like his investment blog. He has done a nice deep dive analysis on LTI. Nothing in there that would surprise those of us who are already long. But always nice to have ones rationale reconfirmed. And also good to see someone helping to get the word out about this unique and overlooked trust

https://maynardpaton.com/

Anyone attending tomorrow to grill the board?

Simon1367. I hear you. And I don't disagree that the recent share price performance has been miserable. My argument is simply that this has been an unprecedented period: Covid, Lock-down, Revenge spending, Ukraine, Higher rates, consumer belt tightening, etc, etc, which means that its simply too weird to extrapolate from or make a definitive judgement about. The point is that Diageo (or at least its brands) have survived other such periods e.g. 70s stagflation, oil shock, etc. That is their attraction. And ditto for Unilever. Companies go through rough patches. Sometimes for a few years. Everyone is wise now what a great investment Amazon and Apple have been. Well for quite a few years it was touch and go. Diageo will obviously never be the latter. But on the flip side in a period of unprecedented turbulence it is still able to generate sufficient positive cash flow to pay a reasonable dividend, service its debts, not cheap out on marketing or capex. And thats because it does have some world class brands which provide a sufficient economic moat. For me the short term share price is a random walk. The market can be totally irrational. I feel I have a small piece of the business. And that is still intact. Time will tell it can recover past glories but somehow I think there is a good chance it will. There is no chance subject to a total global depression or WW3 that this falls to £20. It is already bouncing back intraday as the market realised it over reacted. The FTSE is not exactly over flowing with quality businesses. I think this is a once in a lifetime entry point...

Then with respect you have not the first idea of why people invest in equities. The point is to buy into a business that over the long term can protect your funds from the ravages of inflation and grow the value of the original investment plus future dividends in 'real' terms. A post office account does not do any of that. The current yield is not the way to measure the attractiveness or not of a business. Berkshire Hathaway pays no dividend at all. Is it a bad business? Sounds like you should be going nowhere near equities. If you are focused on a ST yield perhaps bonds or a savings account are the right place for you. Just know that with current inflation the real value of your savings will be eroded in relatively short order. I will take a holding in Diageo (especially at these levels) over a Post Office account any day

It's explained in the results. As a larger company they have decided to run a larger cash buffer, £80m instead of £50m, in line with the new 3 monthly cash cost of running GAW. That cash build is obviously a one off exercise, and once done they can go back to paying larger dividends. Arguably they are being much too cautious. I mean they have no debt so could presumably just arrange a revolving facility to tap in emergencies. But they are very prudent in their approach and IMHO that's part of their appeal. Btw if you take the current shares outstanding of 33m and the delta between £80m and £50m that's just under 100p per share. So very crudely without the cash build they could probably have paid 175p instead of 100p today. As has been said down thread I would imagine an element of catch up as the year goes on. The important news is that the business is thriving. I still believe that the current SP, implying a forward P/E of c. 20x for 2025 and an Operating Free Cash Flow yield of 7% is an absolute steal for this business. Any buyer (and not saying there is one or will be - hope not) would surely have to pay £150 a share to even approach intrinsic value. A very happy holder here. For me the ultimate embodiment of a 'coffee can' share

Agree with the points below on the CEO, etc. All that said this is still the world's pre-eminent spirits portfolio coupled with Guinness, which is crushing it. Even with the ST headwinds company is still meaningfully cash flow positive, dividend paying, etc. Hard to conclude anything but the market being ultra short termist as per usual. The fact that there is no tech / AI 'flavour of the moment' angle obviously not helping things either. I just wonder whether it is getting to a level where Buffet will pounce. He has the firepower to buy for cash. For a LT investor like him this is a once in a lifetime opportunity