Member Info for ragnarlothbrok

Hey Visitor. Seems like the author of that article has done their homework. The policy is a minimum of 15% NPAT

NPAT = $75.63m
Dividend = 4c/share * 269m shares = $10.76m

Payout = 10.76/75.63 = 14.2%

The policy was originally laid out in the Q2 investor presentation from August last year. Its not really worth squabbling over

"As we have already announced, today we have introduced a new distribution policy comprising a reset and resilient dividend and buyback commitment. Our first priority is a resilient dividend of 5.25 cents per ordinary share per quarter that we intend to remain fixed at this level. To be clear, it is not a progressive dividend. This is supplemented by a commitment to distribute at least 60% of surplus cash through share buybacks once our net debt target is achieved and subject to maintaining a strong investment grade credit rating. The remainder of any surplus cash flow will be allocated at board discretion This creates a more flexible model for shareholder returns and results in comparable distributions at around $55 per barrel while also offering increased exposure to investment in the energy transition."

This policy was then reaffirmed in the recent 1st quarter results, however with some slight wording changes

"Our first priority is the resilient dividend, intended to remain fixed at 5.25 cents per ordinary share per quarter, subject to the board’s discretion each quarter."

If 60% of surplus cash is to be spent on share buybacks now the net debt target has been reached that leaves 40% of surplus cash to be allocated at the boards discretion. This could mean a special dividend, more buybacks or paying down debt. Buybacks will depend on the share price. If it still languishing around these levels they will lean towards buybacks. Important to note that the policy is built on the base case of oil in the 50s. Oil prices continuing for any length of time at $70+ will see a special dividend AND increase buybacks.

Hi TBTT, if the fact about the dividend payout ratio being below the promised minimum 15% is true (ie 14%) then they might need to stiffen this up quite a lot for the full year. I haven't analysed the results in any detail yet, but if it is true then it seems pretty strange that they are banging on about about how exceptionally good they were yet they only pay out 14%. Last time they paid out 17.5% on what were pretty mediocre results. I guess the full year will even it out but there is a bit of symbolism in that missing 1%

Not sure if I recall potential for a special dividend mentioned in any of the presentations

https://www.miningmx.com/news/platinum/46365-tharisa-to-pay-best-ever-divided-after-pgm-basket-starring-rhodium-fires-up-interim-numbers/

7p below the placing price! Not often we get an opportunity like that.

Someone really didn't like the placing and increase in EPS??

If we assume that the trend from the first 4 months continues then we could see trading profit at £1m for the year. plc costs are £550k so perhaps 400k of operating cash flow. And that assumes no growth from that first 4 months. I think the SP will explode if the rest of the year continues like the first 4 months. There are almost no shares around and with a MCap of $7m and an amazing turnaround in trading profit over the last 2 years, i'm a little disappointed I didn't get to top up lower, but someone else got there before me

Continued progress, with a strong start to FY21 at a sales and Trading Group EBITDA level - management accounts for the first 4 months of FY21 show Trading Group EBITDA already ahead of the £261k achieved in the full 12 months of FY20

Paying a 9% post tax yield at these levels. They're likely to be one of the last ones standing if the US ever manages to phase out gas.

Not sure if anyone listened to this, but sounds like there is a pretty promising acquisition pipeline, with some large enough to meet the Oaktree minimum size. I think we could see a couple more acquisitions this year

https://www.div.energy/news-events/ir-calendarevents/detail/4476/acquisition-discussion

Looks like the link i posted below doesn't work. All the presentations are here:
https://ir.div.energy/presentations
They've been busy with the slides this month. Would recommend slide 8 of the new investor presentation posted on Monday

Ha! I knew you would TBTT. Buys those dips, thats the rule.

The valuation buffer, even if rhodium prices tank further, is convincing

Solid revenue growth, PBT ahead of expectations, improved working capital efficiency and better gross margins across all businesses. They are still yet to see the impact of the operational changes and discontinued loss making businesses from last year and they have made a couple of small acquisitions which will all further support growth and improved margins this year.

The fact that this is still well below pre pandemic prices is a huge valuation anomaly. The business has not only recovered but has improved substantially since then. EV/EBITDA is only around 5x which flows through to chunky cash flows and the dividend yield looks to be 6-7% over the next 2 years and growing.

With the rise today this has entered into my top 5 holdings and I intend to buy on any more dips. I'm a huge fan of what Sir Nigel is doing with the business

Took a few more, re ran the model.. admired the cash flow... Its a bit naughty...I know I shouldn't...but I just couldn't resist

The trading behaviour today is like someone running off shrieking into the hills... look at all those block sells flying through. Important to remember that even a rhodium price of $15000/oz gives a 2022 EV/EBITDA of less than 2!! Snaffle up those sub 140 shares while you can.

One thing that I think holds this share back is that we just don't know if we will see any of that excess cash in our pockets. Management have been talking some pretty lofty global aspirations... Greece nickel, smelter, iron ore and manganese and of course Karo. All long term investments without seeing any details around costs or returns which implies a lot of trust in management. I'm sure that many would question this strategy instead of a buyback when management acknowledge that the share price is so cheap. A dividend surprise would help assuage some of those fears and convince investors that they will be looked after in the short and long term. But I think they are convinced they should invest it all in the business

I don't have a driving license! My mum still drives me around

Ha! That's great. Every man, their horse and their taxi driver has had a go at forecasting PGM prices

However, I don't think these high prices will last for much longer. A major characteristic for minor metals such as palladium, rhodium and cobalt is that they tend to soar in price in the short time before falling back to earth just as fast. The minor metal super-cycles typically include spectacular growth over the course of one to three years, followed by a swift crash to where they started 6-12 months later.

Oops, cat stepped on the keyboard...

20% equity dilution for a 30% uplift in EBITDA means the acquisition could probably support a small increase in the dividend for next year. But the real upside is the debt capacity that has been released ($335m), meaning the next round of acquisitions will be almost fully funded by debt which will be bring some proper accretion ($100m EBITDA less interest). Sounds like there are a lot of potential assets around so wouldn't be surprised to see another sizeable acquisition this year.

Page 9 of the presentation explains it pretty well

https://d1io3yog0oux5.cloudfront.net/_6e527d684ad219565329cba4e6236f3d/dgoc/db/557/4481/pdf/DEC_Acquisition_Presentation_May_2021.pdf

20% eqdilution with an additional

Hey TT, the huge amount of stimulus and the low rate environment has lead to such low returns across the market you cant afford not to be in equities, but the inflation outlook means everyone is anxious about when the cost of debt (and maintaining levered positions) will increase to the point that it will start impacting on exposure levels.

I really like the precious metal space right now. There is a widening disconnect between metal prices and metal equities, particularly precious. Its not just Tharisa, companies like Impala, Fresnillo, HOC are currently trading at significant historic discounts when you compare their basket to their share price. Equity markets just don't seem to be believe that current spot prices are sustainable and are more cautious in committing. This is particularly evident in smaller less liquid companies like THS.

This type of anxiety creates ideal conditions for PIs to take advantage of the final stage of the bull market. I think we have 2-3 qtrs left before the actions of the Fed start to constrain the market. I'm bullish on THS as a longer term hold purely on valuation basis. Its going to take one almighty correction in commodity markets for THS not to represent good value. Its a PI dream really

And don't forget your other favorites...
MCap
JLP £450m
EUA £750m

Hey TBTT, final tick to $650... going off these prices ruthenium gross revenue contribution has increased from 1 to 2%

Selling and freight are the big unknowns, freight rates have skyrocketed and I don't know how THS would be impacted