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Romaron, it feels as if the extreme volatility in the share price we have have had to cope with over the last few years is draining away. Maybe we are on a P/E of 1 for 2022. Projecting further out is quite difficult.
The share price continues to decline in the face of the decision to cut the dividend. There is nothing new that Hogan can say tomorrow to reverse that unless he decides to put his hand in his own deep pockets but knowing him he won`t do that.
By cutting the dividend at this stage the directors and their advisers have lowered the takeover price for an acquirer by over $100 million. It was essential the the management maintained the dividend at least until the higher productional levels come through. By cutting the dividend now they have reduced the market cap. by at least $100 million and consequently reduced takeover price which would be paid. Fools or knaves?
You cut the dividend if you cannot deliver on your plan. The market has taken that view and marked the shares down accordingly and they will stay down. If the company disagrees with the market it must act to correct that misinterpretation. A meaningful buy by Mr Hogan would send that message and the market would respond accordingly. I think that the market is right and has called Mr. Hogan`s correctly.
The decision of the directors to potentially cut the dividend by 45% although it has ample cash available. has unsurprisingly been very badly received by the market. It has been taken as a tangible loss of confidence by the directors in the future of the company.
Mr. Hogan must immediately make a significant purchase of share. I would suggest 500,000. His current holding of 41,000 shares is derisory.
I believe that Mr. Hogan`s remuneration is in the region of £2,500,000 per annum and he will not be paying PAYE due to the company`s residence in Jersey. He has ample resources to make that commitment and back up his words with a tangible display of confidence.
The Chairman, Mr Rutherford, should convey that message at once. Unfortunately Mr. Rutherford has had to resign as a director of Evraz. A company controlled by the disgraced oligarch Roman Abramovich. Mr. Rutherford`s judgement in ever taking that appointment calls into question whether he continue as Chairmen of this company.
The dividend cut is a major strategic mistake. If the directors are really confident in their projections saving $50m dollars a year is hardly here or there. The 10 per cent drop in the share price makes an opportunistic takeover more likely. Is that the objective?
The misconceived and deeply damaging invasion of Ukraine by Putin has not only exposed the dictator is his true colours but has transformed the long term outlook for gold. This is a turning point for cey which can lead to a fundamental reassessment of its prospects for the future. Google Pierre Lassonde for a detailed analysis of the consequences of Putin`s actions for the gold price in the short to long term.
I wonder if we are underrating this guy. Maybe this plan is keep the share price low and take the company private with the backing of a few carefully chosen private equity firms. Disappointing that private investors can no longer listen to the company`s results presentation.