Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Anyone new(ish) to investing in AIM gambles ... I wouldn't treat this as a buying opportunity yet.
Castle, as an LTH you do have a choice ... hold and take your rights in the offer as you state or sell now and buy back later at a lower price, which it almost certainly will be.
Gist suggested that the sp almost always goes down to the offer price, this isn't quite true ... it goes down to the price that the company is currently worth plus the cash that is added via the listing divided by the new enlarged share capital.
Right now we have 922m shares and after the 17th announcement the price dropped to 0.625p = MC of £5.76m
If the placing and offer is fully taken up we add 2550m+250m shares for £2.8m extra cash (less expenses my guess £0.5m)
So the new share price becomes £5.76m + £2.3m = £8m ish divided by 3722m shares ... so around 0.21p
So Castle ... you're going to be offered one new share at 0.1p for 3.7 shares you currently hold ... do the math and I think you'll be better selling now at 0.35p and buying back - but its your decision
Good Luck All and Merry Xmas - although you shouldn't treat this as advice I would suggest anybody buying now at 0.45p with this obscenely large spread is going to have lost over half their money by the time this offer has settled on 19th Jan ... and anybody who thinks the offer won't happen is delusional - this is supported by enough insiders who are getting the 2.55bn shares at 0.1p to ensure the vote
Shows the dangers of investing in small stocks and also the extent of nefarious insider deals with total disregard to the interests of long term shareholders. I too cut my losses today at 0.35p (about 85% loss) but will reconsider in a few days time whether buying back in at 0.1p is worthwhile. Are any of the insiders actually buying to see this company recover or merely to make a quick buck on today's trading. Will be interesting to see how much "skin' the directors keep / put in the game
Not so Merry Xmas All LTH
Because of the very low sp & market cap there is scope for us to make significant gains
... but so much also depends on DC's side deals buying stakes in other companies he owns like START.Art and EMPL
... hard to know if there is any value in these projects or just a mechanism to transfer money from shareholders to DC himself
Also trying to understand the revenue potential from Bricklive is tricky !
The update on 11/11 contained the following two sentences
BRICKLIVE secures £1.7m contracted revenue for 2021 with two months to go and £0.9m already contracted for 2022;
Asset Utilisation reached 53% of capacity for 2021, from a pandemic low of 35% in 2020, with over 44% capacity already booked (or contracts under negotiation) for 2022.
So if £1.7m of revenue represents 53% of capacity in 2021 and £0.9m represents 44% for 2022 then it is hard to fathom how we ever managed to make £5.45m revenue in 2019.
Since £1.7m represents 10mths revenue and we know H1 was only £622k then I'm going to guess we can make around £1m per quarter at near full capacity. We know that the Cape Town e-prix revenue won't be coming until 2023 and the other fluff could produce something or nothing at all ... so are we looking at a business with £5m revenue potential and maybe 20% net margin if run incredibly efficiently ?!? For a £5m mc company £1m profit would be a good return but this is hardly the stuff to get the sp back to pre COVID level. I've been invested for a number of years and got my average down below 6.5p by buying heavily early this year ... saw myself in profit briefly in April but like so many other stocks in my portfolio its been a long grind backward since the end of May. Think if an offer came in at around 8-10p I'd take the money and run !
I've also added back some of the gains I had top sliced ... not huge amount but worth earning a few grand even if this just moves back to 11p before Xmas. I could even see Shanta becoming a target if the price now languishes below 10p for a while.
I hope not but a larger miner or private equity group might feel a 15p offer would get taken seriously and they would be then buying at below 2021 average price
I'm hoping Titon BoD return to providing preliminary FY results in Mid Dec ... and that sp will swiftly move back above 130p
Rusty - I still stick by my view that IRC has been a millstone for POG for many years
That a sale price agreed in Summer 2020 is different from a price agreed in Dec 2021 merely says that market prices move ... I think we all know that already. IRC sp has more than doubled since 2020 but by the same token it is still much lower than in Mar 2015 when we had to accept the Bondholders terms in the RI in order to keep POG solvent. Right now POG have to either find $500m to repay the Bondholders in Nov 2022 ; or get refinancing or suffer another bondholder raping of the equity capital holders (us). The first clearly isn't going to happen ; removing $200m + of liability to IRC / K&S makes the second option much more viable which I definitely prefer to the third option ... maybe you disagree and would prefer another RI. Ironically if my memory serves the POG share price was around the 20p mark just before the RI announcement in Dec 2014 !
Does anybody think any bondholders will take up the tender offer ?
... get paid 3.5% upfront to forego 8.125% interest in 1yr time
As an Arden shareholder, I considered taking my profits when the Ince takeover was announced and accepting that I wouldn't see the further gains I had anticipated back in Sept. But the fiasco with the Ince suspension prevented that and today I have re-assessed the potential within the Ince group. Accepting that the Senior Partner Adrian Biles must be a bit of a buffoon for getting his firm suspended for not understanding terms of Nomad for AIM listing - my research suggests that Ince is undervalued by reasonable profession services standards. The group has 350(ish) fee earner to 350 other support staff which is an excellent ratio ... and I feel has potential to grow total revenue to somewhere between £130-200m over the next few years organically. I also feel that a market cap of 0.75-1x revenue is appropriate for such a firm ... so think that my new Ince shares could easily revert towards the £1 level
I have a sneaking suspicion that a degree of 'kitchen sinking' is going to be put through the interim accounts on 8th Dec and maybe a bundle of share options be granted to partners based off a very low sp (maybe as low as 38p !) ... but then I think 2022 performance will greatly improve
A very inactive bb - this one !
I considered taking my profits when the Ince takeover was announced and accepting that I wouldn't see the further gains I had anticipated back in Sept. But the fiasco with the Ince suspension prevented that and today I have re-assessed the potential within the Ince group. Accepting that the Senior Partner Adrian Biles must be a bit of a buffoon for getting his firm suspended for not understanding terms of Nomad for AIM listing - my research suggests that Ince is undervalued by reasonable profession services standards. The group has 350(ish) fee earner to 350 other support staff which is an excellent ratio ... and I feel has potential to grow total revenue to somewhere between £130-200m over the next few years organically. I also feel that a market cap of 0.75-1x revenue is appropriate for such a firm ... so think that my new Ince shares could easily revert towards the £1 level
Considering possibly investing here for the first time
Notice that we are at about the same price now as it was when the stock consolidation and issuance took place back in 2017
However are there any Long Term Investors who could tell me a little more about the Block Listing issuances
... it seems to me that every 3-6mths another 6m shares are added to the share capital
... who gets these shares and is this dilution something that will go on indefinitely ?
Best I can establish the share capital was around 120m shares straight after the 2017 consolidation ; increased to around 150m with the further issuance in 2018 @ 10p and has since drifted to current level with these block listings.
Hard to evaluate if this is a good buying opportunity if the capital is being diluted 10% per annum ?
Any useful insights would be much appreciated
NicName - I think you're being unduly harsh. I think the management here are highly competent and navigating difficult times very successfully. I also think the sp movement is more to do with momentum and speculative trading than underlying performance. I first bought in early 2018 when I thought this stock was undervalued at 160p ! Watched it rise and fall before returning to that level in Feb 2020 before Covid decimated the retail market. Thankfully I kept the faith and doubled down at prices below 60p and as low as 38p so that my average is now 66p.
I don't think when profits are in the £5-15m range on Sales around £100-180m anybody would be comfortable predicting long into the future
-how well their strategy of moving to online sales would work or
-how many Mum's & Dad's would return to stores to buy their kids new school shoes or
-how lease renegotiations might lower or raise property rentals or
-how to guess at a sensible provision for pension deficit and staff wages in inflationary times
I see a company starting to return to the conditions I first saw in 2018
When results came out two weeks ago I wrote "could easily see 180m revenue and 9m profit as a sustainable long term baseline, growing with inflation and providing a 10p annual dividend" ... I suspect the BoD were of the same mindset, but didn't want to speculate about that until they were more certain that it was going to happen
I would think this has to reflect badly on Ince image - how can a 'professional services' company not look bad when they are trying to be an all embracing adviser to medium sized corporates and yet don't seem to understand the AIM listing rules sufficently that they cause their own shares to be suspended
Interesting to read the posts on this BB after the acquisition announcement
I'm an Arden shareholder and I see things differently to most of you - in my opinion INCE has got the better of this deal
If you folks look at the Arden interims you will see that we made 0.9m net profit on 5m sales ... so FY '21 is likely to show £10m revenue and £2m profit giving you a company with a p/e of 5 ... you've got a bargain.
Question is whether I accept my profits (which are far less than they would have been if we had remained independent) or do I hope that this will revive a mediocre Accounting outfit that was already reeling pre covid. I need to research why your sp halved in Dec '19 ... but if for the moment I assume you can get back to generating a 5% net profit then the combined entity looks like (100m + 10m =) 110m Revenue & (5m + 2m = ) 7m profit with 86mm shares in issue. Put it on a p/e of 8-10 and maybe the Ince sp can get back towards 75p. Somebody below commented revenue is vanity ; profit is sanity - I agree !
I need to determine if I think Ince can generate profits or whether it just pays its partners and to hell with the shareholders
SirGB - that's the way I read the RNS as well "They will retain ~30% in a project valued in at $40m and will receive $1.5m cash"
So long as the IPO is a success - this sp has to double !
Back in April I suggested this was a bit of a gambler's stock and I rated the probability of several scenarios to give a fair value of 0.09 x 0p + 0.25 x 150p + 0.33 x £3 + 0.33 x £5 = 275p. These past few quarters have been consistent and quiet which suits me find. Our 2021 revenue will probably be around $48m from 28k oz production so I think the chances of us going bust have almost disappeared and chances of growth towards that 100k oz production aspiration which they had a few years ago is becoming more likely but still distant. So my revised fair value is now 0.33 x 150p + 0.33 x £2.50 + 0.33 x £4.50 = 283p ... not much different, but I feel much more confident that we will get our re-rating to atleast £2.50 even if gold sticks around $1750 and the company just announces 8k oz production in Q4 .... I'm staying overweight !
I took a punt on BCN in Feb and sold half my holding at just shy of the offer price in the open market a couple of weeks ago
I'm now deciding whether to hold or take my profits.
My understanding is the carrot is a 35k tonnes per annum mine in Mexico running by 2023. Lithium ore prices sky rocketed in 2017/18 on the Tesla hype but have come back down to earth as production has increased. So if we see prices stabilise back around $6000 p.tonne then we get a $200m revenue business ; maybe 30% net margins so $60m profit ; p/e of 10 and the company is worth double what it is currently ... but Ganfeng have to invest significantly to accomplish that. I don't see them making a much higher offer ... think if I can sell for 75-80p over the next few months I'll definitely bank my profits ? Thoughts ?
It was another gloriously awful quarterly update ... but the fact remains that even as a 100k oz miner with appalling AISC this company should still have a market cap above £100m and that is with no new projects. In the 5yrs I've owned this stock I've seen the price rise to 40p twice and (regrettably) not sold a penny because I always thought it undervalued. I'm more wary now because of the rubbish spouted by DB but I can't help but feel the underlying value is compelling. Guess I'll be holding for another year or two !
First bought in here last December below 80p and thought it was ludicrously undervalued - so when the sp rose to 150p in the Summer I thought we were starting to see fair value. Couldn't understand the fall back to 100p, but have learnt to not expect markets to behave rationally. The thing about this RNS is that the BoD are essentially telling the market that FY revenue is going to be around 675mm ... so FY Net Profit really should be above 90m placing us on a p/e of 4 even after this 30% rise in price. Add in 85mm cash and it's no wonder that Peel Hunt have a target of 250p ... but this has all been known about for the past year and yet we haven't seen a sustained re-rating. I can't explain that but am happy to have kept the faith and stayed overweight. Would like to see 150p+ when the results get published !
As well as digital sales it's worth noting that since FY Rev is 120m and H1 was only 40m then H2 Rev of 80m puts us back on track to match 2019 revenue next year and this wasn't even with fully unrestricted trading during H2 only during Q4. I'd love to see the full quarterly breakdown. Could easily see 180m revenue and 9m profit as a sustainable long term baseline, growing with inflation and providing a 10p annual dividend
Popes - you're quite correct about the need to take profits when you can and to double down if you have the conviction.
I bought my first 5000 shares here in 2017 for £18000 ... my next 5000 for £1220 and in between times I've managed to sell the odd 1000 for as much as £2800. My notes to myself on this particular stock have been unchanged for about 4yrs "Basket Case but hype might send it up to 200p+ again - start top slicing" ... I'd suggest others consider the same ! GLA