Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
It's not all the investor's/market's fault:
Saying the government have not helped with their huge windfall tax [with no end or price support] is an understatement.
Huge reduction in proposed projects around the UK in the backyard of PFC and WG.
I don't think he was saying they 'pulled a blinder', I think he was just saying they have breached the contract in epic style without inference to the winner.
Earlier on he does say he is not trying to determine the winner but reading the text shows it would be odd if Burford lost.
At the end of November I drew a head and shoulders retracement that had a target of 791p.
Perhaps I should have sold some LOL
It's hard to say how low this will go, I still believe it will be a good returns generator over the next 5 years. I might add some in a few days.
This is part of the great investment case for BP. At 2.68 EV/CFFO it doesn't take very long to for the cash to build up enough to force a re-rate.
The share buybacks are still the best use of profits, the ROCE is very high, it helps price discovery and running rate of 10% of shares bought back per year is significant.
Only problem is investors still need to be patient (but the longer the undervaluation, the higher the eventual spring will be).
Burford are canny players with a long term term investment view so I expect them to be sitting pretty whilst negotiations carry on.
The delay could well because they are playing hardball and won't agree to a low deal. In the mean time they are clocking up extra profits on the clock (which are of material value against their profits).
Considering the flood of contracts coming down the line, a sensible company wouldn't desperately bid on the first few which might be unprofitable but be patient.
The industry has shrunk over the last 7 years so there will be a lack of capacity going forwards leading to much higher margins.
Unfortunately, investors are impatient so the share price falls (I am not immune myself).
The quicker it gets to 200p the better, I have too many now after topping up this morning!
I am not sure what you were expecting but they are not far off what I expected.
Net debt is down but not as much as everyone will like
Importantly there are no changes to the year projected figures.
Profit reported for the 6 months
Turnover drop is larger than I would like.
But the company has managed to get its new systems installed and the turnaround plan implemented within the expected timeframe, at least now they can see what is happening in their company.
There should be a recovery to 400 on these results IMO.
It would be nice to get over £5
The next qtr results should be very good, look at the refiner margin 19 - 43 ($/bbl)!
https://www.bp.com/en/global/corporate/investors/analyst-information/trading-conditions-update.html
I too thought £4 was solid
Buybacks at these prices are a bargain so I want as many as possible
I don't want them to sell the Rosneft stake (as long as trading with Russia is restorable some time this year)
The more dominant they become in renewables -> Hydrogen the better
Everyone in the industry is hesitant to invest due to the political messaging, large capital costs and the time involved to obtain a positive return. The politicians have been very anti O&G for a number of years and in conjunction with the environmental movement have turned sentiment against fossil fuels by selling an impossible renewable solution to the public.
Because of the above there is no confidence that the rug won't be pulled in the future by extra taxes, legislation or lack of lending available (banks don't want to lend and investors such as pension funds are 'ESG only') .
The above is starting to result in a lack of capacity both upstream and mid-stream and this will continue. At some point the potential profits of a project will be so high they will overcome the hesitancy but this bar is very high and we are only at the beginning of the energy squeeze. Energy is going to be in short short supply for a couple of decades until technology and nuclear catch up and when the renewable infrastructure is already built (implementing renewables takes a lot of energy).
In a year's time everyone might be so desperate to solve the energy crisis that huge sums will be chucked at PFC, I believe this is what PFC are waiting for, pass on the early unprofitable contracts/bidding so they have spare capacity for when the contracts are very juicy.
I don't think BP have any use for PFC, AFAIK they always did their own engineering work. (unless they make a U-turn, expand O&G and they need to replace all the people they laid off).
Looks like it
https://www.thisismoney.co.uk/money/markets/article-7770187/BPs-incoming-boss-cashed-7-8million-BP-shares-just-months-confirmed.html
I also believe the buybacks are a great deal with this depressed share price, it will super-charge the share price increases later on this decade. Every share they buy is at a 30%+ discount.
I also wondered about your cash pile question, if they want to keep R6bn in reserve then it doesn't make much sense working on the December figure if the current cash pile is R3bn higher.
Bearing in mind governments seem to want to confiscate fossil fuel profits, I would like as much distributed as possible.
It's a shame that EU have targeted oil processing in Russia with sanctions, I assume whilst these last PFC will not be able to start any projects there as per the previous MoU
My current belief is that Ukraine will surrender in the next 48 hours. Putin will not be in a position to discuss anything until his Ukraine plans are over (and hopefully they stop there). Western media seem to be trying to get as much attention and clicks as possible by discussing whatever crazy ideas they can (not sure anyone listens to them day to day any more).