Member Info for PSB123

I hold shares in both VAST and PREM and have watched the share prices of both increase rapidly recently due to the expectation of access to significantly improved mining opportunities in Zimbabwe.

Both are heavily followed both on here and in terms of trading volume.

Having read up a lot on the situation in Zimbabwe though I'm puzzled that Tharisa (THS) has gone under the radar at the same time. It's listed in London, is already profitable from it's current operations, has broker buy recommendations, a modest PE ratio and pays a dividend.

More importantly for the purposes of this discussion Zimbabwe has the world's second largest platinum deposits and THS has exclusive access to the largest mine that dwarfs the others ($4.2bn value). This is considered one of the cornerstones of the Zimbabwe governments $12bn mining plan and yet the THS share price hasn't moved like the VAST and PREM ones have and it seems under the radar.

I'm very tempted to add to my VAST and PREM investments with THS but am I missing something?

I hold shares in both VAST and PREM and have watched the share prices of both increase rapidly recently due to the expectation of access to significantly improved mining opportunities in Zimbabwe.

Both are heavily followed both on here and in terms of trading volume.

Having read up a lot on the situation in Zimbabwe though I'm puzzled that Tharisa (THS) has gone under the radar at the same time. It's listed in London, is already profitable from it's current operations, has broker buy recommendations, a modest PE ratio and pays a dividend.

More importantly for the purposes of this discussion Zimbabwe has the world's second largest platinum deposits and THS has exclusive access to the largest mine that dwarfs the others ($4.2bn value). This is considered one of the cornerstones of the Zimbabwe governments $12bn mining plan and yet the THS share price hasn't moved like the VAST and PREM ones have and it seems under the radar.

I'm very tempted to add to my VAST and PREM investments with THS but am I missing something?

0.13 vs 0.145

MMs keen to pick up shares cheaply but won't let them go

It’s really not:

- First HAW online and in line with expectations
- Production up YoY and in line with year end outlook
- More / better hedging done when oil price spiked after Saudi incident
- Small decline in cash at bank due to capex to fund increased production (but still debt free and very high cash compared to market cap)

I know. September is the unknown but 2/3 of the quarter is known and only one week of 13 was after the first MRRL fail. Obviously we’ll have to wait to results to find out the impact but I find it hard to believe that that one week will have ruined what was clearly shaping up to be a good quarter.

From the prospectus...

Retail deposits up from £13.70bn at end of June 2019 to £14.44bn at end of August 2019
Loan to deposit ration down from 109 at end of June 2019 to 104 at end of August 2019

There may have been some withdrawals in the last few days of Q3 (very end of September) but we know for a fact deposits were up significantly in July from the MREL prospectus (and deposit to loan ratio down). I find it very hard to believe the Q3 results won’t be positive with 2/3 of it known on key metrics and looking very good

'can expect quarterly results around 24th/25th October I imagine !'

It's 23rd October. Published on Investor Relations section of the Metro website

Lots of comments of 'what if Q3 results are bad', but we've already had a sneak preview of 2/3 of the quarter (July and August) from the bond prospectus:

Retail deposits up from £13.70bn at end of June 2019 to £14.44bn at end of August 2019
Loan to deposit ration down from 109 at end of June 2019 to 104 at end of August 2019
Very strong performance in regulatory service quality comparison (1 in consumer, 2 in B2B)
Number of new stores opening or on the horizon (Sheffield, Liverpool, Manchester, others?)

Add this good news with 2/3 of the quarter gone to the initial suggestion when the pulled the first bond offer that they may issue again after Q3 results (implying to me that they thought investors would look on the offer more favourably after that) and it suggests to me we should get some very positive results. Obviously DYOR but I'd like to think we'll get a nice boost after the results are published and after that who knows?

1/2 million buy and little left on the bid side. Hope to see a quick surge at the end here

On L2 at the end most of the bid and ask prices went to ‘MO’. I’m not sure what this means, is it just a sign that it’s in auction?

Those trades are showing for me as:

04-Oct-19, 14:09:27, 186.70, 133, Buy, 185.60, 186.70, 248.31, A
04-Oct-19, 14:09:02, 186.10, 53, Buy, 185.40, 186.70, 98.63, O

ie not showing as 49 or 99 but 53 and 133

What's that all about?

It seems likely that the Q3 results later this month will be the catalyst for any major change in the share price. I'd also assume that any takeover or major transaction would be unlikely to happen until there was clarity around them.

Just reading the MREL prospectus again there are a couple of hints in there, specifically:

Retail deposits up from £13.70bn at end of June 2019 to £14.44bn at end of August 2019
Loan to deposit ration down from 109 at end of June 2019 to 104 at end of August 2019
Very strong performance in regulatory service quality comparison (1 in consumer, 2 in B2B)
Number of new stores opening or on the horizon (Sheffield, Liverpool, Manchester, others?)

Add this good news with 2/3 of the quarter gone to the initial suggestion when the pulled the first bond offer that they may issue again after Q3 results (implying to me that they thought investors would look on the offer more favourably after that) and it suggests to me we should get some very positive results. Obviously DYOR but I'd like to think we'll get a nice boost after the results are published and after that who knows?

Pretty much without exception. Should we read anything into that? Bots or stop losses triggered?

I just cannot understand the price of this share. I've been buying this for a couple of months so please bear that in mind and do your own research, however...

Petra is priced almost as if it was going to go bust but I cannot see how that can happen. I always try and play ahead in my mind to what might happen and even if the share price wasn't able to recover substantially from here (and my basic analysis puts it's value at a minimum 3-6 times current price) there is too much value in there and someone would surely acquire and have to pay a premium to today.

Using broad, round numbers the market cap is circa £60m, the net debt is circa £500m, interest on the debt is circa £50m and the free cash flow is circa £70m at current levels (with a likely recovery in diamond prices and a major turnaround project underway which would grow this).

Simplistically if I had £560m I could buy the business outright and pay off the debt, immediately wiping out the interest and have an asset delivering and immediate £120m return (£70m FCF plus the extra £50m no longer paying the debt) for an immediate 21% return for decades to come. Factor in some not unreasonable assumptions about diamond pricing (given supply is likely to crunch from next year) and operational improvements and it's not difficult to imagine that return being more like 35-40%.

More likely I would pay off half the debt and restructure the rest at a lower interest rate given the reduced risk profile. I'd then be looking at something like £300m for a £100m annual return (still paying £20m a year interest), potentially rising to as much as a 40-50% annual return with assumptions around prices and efficiency.

You can attach your own valuations to a business delivering those kind of returns but on any basis you'd have to say it would be a large multiple of today's valuation.

The value of the asset is so much greater than today's share price implies and I can't see how it could go bust because there would always be a way to realise that underlying value even if sold off at a huge discount to true value it would still be miles higher than today.

And I see that as a reasonable worst case scenario, more likely Petra are able to realise that value themsevles over the next few years and then you could be talking about truly huge multiples of today's price.

Am I missing something? I gnuinely can't believe how oversold this is.

I'm struggling to understand why there isn't more interest in this. The way I see it there are three strong growth drivers - new store openings (2 a month forecast - roughly 20% a year growth), growing like for like sales and growing online sales (both up last year). Last years profit grew despite being held down artificially by the one off listing costs so given this dropping out of this year's results and the three drivers above I'd expect some significant growth this year. The franchise model means very low funding costs (franchisees are paying for the store openings not the company) and they are paying a dividend.

Despite all this the share price is pretty static and there's next to no discussion on this board or ADVFN. Just wondered why we don't have more people paying attention.