focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Wow indeed!
The RNS says sales orders rather than sold & delivered - so at some point it would be good to understand how much product has been delivered and invoiced - BUT - even then... Smalley I'm afraid you are going to have to work a lot harder to persuade anyone that sales orders in 3 months almost equal to the entire preceding 12 months isn't positive - Lol!! I look forward to your efforts #goforitsmalley
Yeah, you are in good company Mr P, I bought in a bit earlier and averaged around 12p but there have been some dark days! Slightly kicking myself, like you, that I didn't have the courage to add when it was languishing but in reality the picture looked pretty bleak and it took guts to not completely bail and keep your holding.
Another nice little rise today and glad to hear your 3 years worth of patience is starting to pay off - ATB
My thoughts are that the Q1 update will be excellent and the SP response thoroughly underwhelming! Full year financials at this time next year will be the point where the value should be unmistakable.
BMcM has spoken often about returning benefits to shareholders and I wouldn't be surprised if after the 2022 year, (particularly if its very good) a small maiden dividend was paid, it would reward patient LTHs and signal intentions to the market.
Hey, was invested here and sold at a small loss and looks like the price has dropped further. I'm looking at the fundamentals again it looks like there is huge value here again. Any reason in particular why the SP is so low at the moment given the positive recent financials? The additional production site began to feel a little like 'Jam tomorrow'... how close are they? Any thoughts on where a fair share price would be?
Thanks all,
Crikey - using this calculator and some pretty modest assumptions I come out with £1.15 per share within the next 2 years based purely on KPFertil...! Thanks Chique, the calculator might be slightly light on the cost/overhead side based on the last financials and with a step change to higher production levels but still I'd be happy with half that gain. My strategy continues to be hold, add if possible and sit tight.
name_mike it is frustrating, careless reporting. I think they try and hype up BMcM a little, he clearly isn't given to hyperbole - "Looks like we are on track for a solid year" / "We're having some discussions with some of the majors" / "We're proud of getting status as a fertiliser and time will tell what impact that has". Again, I quite like that this is under-played... the stock isn't hype and hope, its steady, solid, unsexy, imminent profitability.
I get the feeling like the SP will properly take off when the first financials showing a huge profit margin get published. It seems to me there is huge latent value not priced in, but, DYOR.
Hey Breaktwister,
In short the only supply issue for HMI is their physical capacity to meet demand this year by the looks of it.
The product is mined and processed on site, its a weathered lava rock that is simply crushed into a powder, stored in a large building and loaded into trucks to be delivered locally to meet the huge demand in the same region for fertiliser. At the moment the size of the building will need to be extended so they can process and store more.
The sanctions/war issues will ultimately hugely reduce imported fertiliser supply to Brazil, so eventually this will just make HMIs locally produced product more in demand and put an upward pressure on price.
You've turned up at a very good moment!
100% agree, plenty of value to go here, the news today suggests we are on target for 200kt - we would expect this year to throw off circa £4-5m in profit on that basis. with a P/E of 20 that would give us a 40-50p share price and a market cap over £50m that starts to attract some of the green investment fund money.
Not to mention that 200kt clearly isn't the demand ceiling, fertiliser prices are soaring and future projects to add into the mix...
Starting to get very interesting here!
Hey CaneToad,
That's right (depending on when in 2018 you are referring to)- the last placing was 11th June 2018 - £9.7m - Brian McMaster invested £770k of his own cash at this stage as well. From the placing the SP rallied a little before falling flat for a couple of years - looks like things are waking up again after HMI had an encouraging year for sales in 2021.
So, just want to test some logic here - please point out any flaws or over-optimistic assumptions
- in Q1 HMI want to exceed 15.5kt of sales (9kt last year plus this years forecast increase). In terms of buying seasons etc. this would point to us being on track for 150kt for the year in total.
- At 150kt of sales in 2022 my very cautious estimate from the accounts suggests £2m+ profit after overheads etc. etc.
- At a P/E of 20 the market cap for HMI would be £40m+ (20p+ a share) - this would assume no future growth/expansion opportunity
- At 300kt in a couple of years with some price increase/economies of scale and modest overhead increase I come up with £8m+ a year in profit
- At a P/E of 20 market cap would then be £160m+ (80p+ a share)
I think monthly sales performance will be on its way in due course as profits get firmly established and I agree it may well have a positive impact on SP. Its important to remember HMI, as it stands, is a very small business and any monthly commitment to report has to be followed through on and takes resource and time away from growing the business. As a LT holder I'm happy for quarterly updates at the moment - it also keeps this share a little under the radar as well for those who want to get in or top up.
Yes, really happy to see this today - this seems like a delayed response to some of the good news in the last couple of months. I suspect the Q1 sales results might spark another similar surge in April. We are still quite a way down on the value of a completely de-risked proposition like this. I'm nearly back to breakeven on this now...
TBH I'm not thinking about limestone until we start to get production/sales going.
Its interesting, I started investing in 2018 and we were forecasting KPFertil sales in 2019 similar to the levels achieved this year. The major reason was a couple of large corporate customer orders (including the infamous agreccerado). Its taken another 2 years to actually get there... I wonder if the big clients may come off eventually as the product gains traction. Back then the share price was 14p ish rising to over 20p in the following months. With a very sound argument that it was undervalued at that level. There was a placing that probably diluted to the effect of 30% or so, but even on that basis, provided the quarterly sales figures match or exceed the forecast expectations and possibly throw in a major KPFertil corporate order on top of that (like a Veloso type order?!) and we are looking very good. I've had to wait a long time on this and I'm still invested at a loss but glad that I havent panicked or had to sell.
https://www.youtube.com/watch?v=yKEGzAYxbW8
I think I remember hearing in the investor presentation above it was 2m AUD (might be wrong). Cash is relatively low but I'm not unduly concerned about this given Harvest are in profit now, growing pretty rapidly and the buying season seems to have been brought forward.