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"1.5%?!! you call that nice?"
Have a look at the annual dividend flows. This is one payment , last year they made 5. This is the 4th so far this year and I would expect at least 1 more relating to the 22-23 FY.
Last year's total divi was £2.35, this payment takes this year to £2.95 with *finger in the air* maybe another £0.50 to come. That puts the divi in the region of 3-4% on current sp - not spectacular, but growing y-o-y, and if you bought in at the lows earlier this year you are more in the region of 5-6%.
It's the uncrossing trade
Ahhh yes, fantasy formulae are always interesting (I worked somewhere where the Bill of Materials for a drawstring bag had 1.6 miles of string in it because everyone ignored the units of measurement we bought the components in). :)
"Am I missing something?"
Briefly, yes, the 3? return is an annual figure, not on an in and out basis.
RNS 12th Sept 2022:
"The total expected average annual fees to be invoiced by the Company's fully owned subsidiaries, as detailed above, over the duration of this specific transaction, equates to approximately 3% of the gross value of the inventory to be monetised by the StockCo. "
Annual fees being the key phrase. I'm pretty sure that there are other places that SYME have used a 2-3% annual fee for amounts under management.
"If SYME gets the 50 million from V Chain, how much is this worth in revenue for them?"
based on 3% upper range, about $1.5m a year. Plus if it all worked, the potential for the fabled snowball effect and massively increased exposure.
END=RNS - autocorrect!
"It does read that Vechain have pledged a commitment of $50m "
I don't see how, without torturing the English language you can read that. IF it had read "reflecting the commitment budgeted by VeChain FULL STOP" then I would read VeChain as finding $50m. But this would represent $41.5m of new funding. It would not be buried halfway down an END as an adjunct to other announcements, it would be front and centre. As it is, with a very badly placed Oxford comma, SYME is putting a $50m portfolio together of which $8.5m is funded and they are looking to the VeChain ecosystem and other cryptos for the remainder. If they achieve it, it will be a great achievement for them, but I cannot see how you think that RBS is announcing they have a $50m portfolio of clients and $50m of funding to satisfy it.
Gosh that's misleadingly edited to make it read as a single piece of writing!
I can't read it as saying that the full $50M is available and ready to go, because of the word "and" between the "commitment budgeted by VeChain" and "the opportunity to raise additional capital ..." which to me reads that both are covered by the $50M. not that the additional capital would be additional to the $50M. Plus if VECHain had upped their commitment to $50M I am sure SYME would be shouting very loudly about it (and should do).
But, I have been wrong before and will be again ;)
"But funder gaining confidence and adding upto £50m is bullish imo"
This has not happened and is not in the RNS. What the RNS says is:
"reflecting the commitment budgeted by VeChain (i.e the initial $10M less the $1.5M used = $8.5M)and, the opportunity to raise additional capital from the VeChain community and other crypto/ digital assets investors" - the bit in brackets added by me.
"Next phase has increased from 8.5m to 50m - further commitments from Vechain"
Just to be clear, the RNS does not say that VeChain have commited further funds. SYME are compiling a list of customers with $50M funding requirement, they have $8.5M of this available from VeChain still undeployed. That leaves $41.5M to find.
That $41.5M is hoped to come from:
" the opportunity to raise additional capital from the VeChain community and other crypto/ digital assets investors"
plus
"SYME has also approached the market-leading Centrifuge[3] and MakerDAO[4] communities to explore potential funding of IM transactions through the Centrifuge protocol and to access liquidity through DeFi"
Nothing concrete.
Just for a sense check, from the last 6-month interims, the cash burn was £2.1M or £350k a month. Annualised, that is £4.2M a year. IF the $50m is raised and deployed, and IF it is at 3% margin for SYME (the upper end of their expectations), that would raise $1.5M annually which is roughly £1.25M or 3 1/2 months' cash burn.
In April/ May, SYME's cash burn will increase by about £15k per month as they start having to make capital repayments on top of the c.£4k a month interest - neither of these would be in the 2022 interim #'s.
SYME has had $8.5M available for a few months that it has not deployed in IM. Is this a lack of customers or is the process just too slow right now? Based on the first IM I would be surprised if anything was deployed before March/ April if they are now waiting until it gets to $50M of funds. This all feels very slow and risks them running out of cash, especially if the bank loan is ring-fenced for technology spending and can't be used for the day-to-day. At 30 June, SYME had £900k in cash - I haven; worked through the net effect of the Open Offer, Venus shares and warrant cash versus the Mercator repayment to see how much net cash was added to SYME's balance sheet, but I think it would be a worthwhile exercise.
"It surely can't be long now before the much-anticipated 4 x 2p dividend level is reached, maybe next f.y.?"
I think we'll get the 1.5p final this FY (in about August '23) - average NAV/ share over Q1-3 is £1.0897 so only needs Q4 to be about £1.01 to keep the average over £1.07. to hit the £1.14 NAV needed for 2p would take a Q4 NAV of £1.291. 2p by August 24 feels do-able with a good tail wind though.
I think my opinion is in my holdings since 2016.
My failing was that when I topped up in September, I set a stop loss once I was in profit and ended up selling out the top up for marginal gains which would have been much more significant had I held.
Monkeydluffy : Prove me wrong.
GAW Board: Hold my Beer
:)
Per the latest TR1 I can see for M&G (25/11/22), they have no shares out on loan.
BlackRock (TR1 dated 8/12 was cancelled 9/12 and reverted to the 11/10/22 TR1 - confused yet?) have 9.91% of the company held and 1.99% lent out, totalling 11.9%. The cancelled TR1 increased the leant out shares to 2.86% and the total holding to 12.05% .
Thanks - per page 19, 5.5 pence dividend and the 7.5% is total return, so NAV/ revaluations, reduced borrowing etc. makes up the difference.
"at least a 4.5p dividend paid aiming for 7p per year."
Can I check this #? I am pretty sure the target was 5.5p per year rather than 7p. With all the bad news doing the rounds I'd rather not have missing divi targets added to the mix :)
"SYME provide the cash"
Technically SYME provide cash from investors. They aren't providing it from company funds (at this point). They are more like a broker for pawn brokers.
The bit I am really interested in exploring (aside from whether this would count as an IFRS15 true sale which I am sceptical about) is the value of the funding. I suspect/ believe/ anticipate that any sale from client to SYME (again technically a stock holding company owned/ operated by SYME) will be at a loss. So the client moves from having a debt on the balance sheet by traditional funding routes to having a loss on the P&L by the SYME route. I wouldn;t see this as an attractive trade, but I am intrigued enough to follow things and find out more.
TBH if SYME does spend most of it on the technology development, a 5 year payback doesn't seem unreasonable - when I asset finance plant loans, they are usually over 4 years, so if you look at it through the asset development lens, 5 years isn't unreasonable.
"Be under no illusion as to the significance of syme moving away from CLNs to a traditional form of borrowing at an interest rate of 3.2% - no further dilution , no waiting for BPM to off load shares :)"
1 - where are you getting 3.2% - it is 2.75% above EURIBOR, and EURIBOR is currently 2.693% (https://www.euribor-rates.eu/en/current-euribor-rates/) so I make it 5.443%. Note this is still infinitely preferable to another CLN for holders as long as the company can make the interest and capital payments as they fall.
2 - I note that you now accept that Venus are offloading shares by implication of the second part of that quote.
For clarity, I do think this is a positive step by the company, and it takes out 3 months of cash burn, assuming that last year's figures included investment in the platform that this loan will cover.