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Quite a bit of that cash is regulatory capital, but you are broadly correct that this is a very cash generative business hence all the buy backs and dividends yet cash still keeps piling up.

This volatility is great for PLUS

Nigeria needs to accept that fuel prices fluctuate; is it such a hard lesson to learn? The beneficiaries of subsidised fuel are black market traders who suck up all the supply and export it.

You have a world of pleasure awaiting you next week in which case

The trading update is going to be a good one, so in my view it is likely to break £20 by this time next week

Brokers have been talking about business in UAE being really strong with high net worth traders

16 April

Should be good update with Vix rising, UAE CFD business roaring, and growth of US operation

I meant to say "insufficient traded liquidity"

Anyway, with the MPNU deal, ANOH, and the resultant the scaling up of the business in US$ revenue and profit terms, we hope more institutionals to be drawn to the stock which will support re-rating and improved liquidity and a virtuous circle in that regard.

I'm repeating myself but the fact the local line of Seplat is at >40% premium to SEPL (see here: https://afx.kwayisi.org/ngx/seplat.html) is so very telling. Presumably the locals see a valid reason for valuing Seplat at circa 210p/share. As I also mentioned before, exchange controls are no longer a factor in this discrepancy since the central bank of Nigeria cleared the FX backlog and basically released the currency to market forces. So this discrepancy is purely a market inefficiency, in my view. The challenge for SEPL has always been sufficient traded liquidity to draw in Institutional investors. But right now, that is a market mispricing opportunity for small investors.

The final and special dividends for 2023 have an Ex-date of 25 April, USD0.06 in total, or 4.3p in the pocket (net of withholding tax). Then we have the Q1 dividend with Ex-date of around 23 May, minimum USD0.03 or 2.25p in the pocket.

This is 6.45p of dividends (net) to shareholders within the coming 7 weeks - a 4.4% yield, just for sitting on the stock while we await the commercial launch of ANOH and formal sign-off of the MPNU acquisition.

Pretty sweet!

Https://techeconomy.ng/recovery-of-naira-linked-to-7bn-fx-backlog-clearance-bdcs-react/

In case you missed it, the CBN has cleared the forex backlog (first time in around ten years), which has resulted in the Naira appreciating the last two weeks. The Naira has appreciated more than 20%.

The local Naira share is still trading at NGN3370, which is a GBP equivalent of 210p.

That is a 44% PREMIUM to the London share.

Their accounts show customer margin/deposits of their CFD businesses in Europe and elsewhere, which is on-balance sheet. They are the counter party to the customer's positions, I believe. I don't know how the Cunningham futures business works but presume that customer positions are held in custody accounts along with customer deposits and are not on-balance sheet. The revolution PLUS brings to this market is the real time data and trading interface, as well as ability to tighten spreads for the customer and margin offsets if the customer has multiple positions in opposite directions, as they are a full clearing member of the exchange.

It is of course much lower margin business, so the customer deposit size in the US as per the spreadsheet generates around ~10% of the revenue the retail CFD business does.

I think I might be halfway to understanding how the US business works, frankly, but I am quite sure the data from CFTC is legitimate and telling.

Good spot ggplyr

Segregation of Customer Funds: https://www.cftc.gov/IndustryOversight/Intermediaries/FCMs/fcmsegregationfunds.html#:~:text=Segregated%20accounts%20must%20be%20titled,the%20event%20of%20FCM%20insolvency.

As I understand it, assets/margin on futures instruments are not on PLUS500's balance sheet, so do not appear in their accounts

Where do you go to find data on App downloads?

If you want to track PLUS's activity in the US futures market through Cunningham Commodities, this is the way to do it:

https://www.cftc.gov/MarketReports/financialfcmdata/index.htm

As I understand it, "Customers' Assets in Seg" = margin or capital held on behalf of clients, which is a precondition to trading activity.

The growth in assets is lumpy. Cunningham's customer assets grew 23% in July last year and almost 40% in the second half, but only 5% in Q4.

For the full year, Dec 2022 to Dec 2023, customer assets grew 75%.

The lumpiness doesn't matter in my view, as long as the trajectory is positive and upwards.

Cunningham are a tiny player, with around 0.13% market share of customer assets.

This suggests to me that Cunningham alone could become a revenue and profit driver for PLUS. The US contributed 5-10% of revenues last year, of which most was Cunningham. If their technology is so very revolutionary, which they claim it is, PLUS will grow this business by multiples.

The share buyback last week signalling board confidence in the business. Closure of their European Hospitality Real Estate Fund is around the corner and should provide further momentum.

My basic DCF shows a fair value of around 215p, using conservative assumptions, and exclude any value from MPNU.

The inputs are:

Cost of equity of 14%

FCF after dividends paid and interest costs of US$80m in 2024

Dividend paid post withholding tax of US$80m in 2024

Terminal value is derived from FCF after dividend and interest costs of US$130m in 2025, discounted by 10% for withholding tax, + PV value of dividends post withholding tax

Growth rate of dividends and FCF of 2%

Basically the present value of the current dividend stream is near the same value of the PV of FCF. You could say that by discounting the FCF by withholding tax, I have assumed that this FCF is passed to shareholders.

I would argue that the already high, consistent and progressive dividend should be a catalyst for the share trading closer to fair value, essentially because there is a line of sight to it. In my view the share price is realistically going to edge up towards 200p.

MPNU will create additional value beyond this. We don't know what that will be yet - we need the deal to be signed off and Prospectus issued, but we know almost for certain it is happening. That's additional upside.

I'm not taking an profit until we are close to 200p, but only then because I will need to manage my overall size because I still see value at 200p.

The investment climate in O&G in Nigeria is only improving and has years to run. In stark contrast to North Sea oil. I've said it before, the political, tax, and ESG risks to North Sea oil are significant; Nigeria is LOWER RISK in these areas. As a local champion, SEPL has a long term growth opportunity. From a reserve perspective, SEPL's portfolio is low in complexity, low in operational risk, high in lifetime/years. With MPNU, the big opportunity will be export of gas. This long misunderstood stock is at last communicating its growth vision, and investors are waking up to the myriad of drivers.

I did find yesterday's move quite odd, as the news was very esoteric and almost all of us have no information on what these executive policy orders will mean and timeframe, but am pleased that someone does have a strong view and thought it worthy enough news to buy the stock hard.

There were a couple of posts about dissaray in the downstream oil and gas marketing sector in Nigeria. I want to clarify that this does not impact upstream players, such as Seplat, at all. The issues concern traders of gasoline, LPG, diesel, fuel oil, etc in the domestic market. It is a highly leveraged and shady sector, often trading on the fringes of legality with dealings in the black market, border trade, etc. You don't need to worry about this, has nothing to do with Seplat.

I would like to have received a 5 cent special like last year, not 3 cent, because the cash generation can support it.

So instead, I hope the BOD consider raising the quarterly dividend when it is declared at the end of April.

In any case, this is a good baseline dividend, and the quarterly payments are great. We are just 2 months away from another dividend declaration.

FY 2023 results are a clear beat, with EBITDA margin yet to recover

Key points:

▪ PPHE Hotel Group presented another solid set of results, with total revenues up by c. 25.6% YOY to GBP435.5m (FY 2022:

GBP330.1m) and well above 2019 pre-pandemic revenues of GBP357.7m. Revenues came in c. 1% ahead of KECH and consensus

expectations.

▪ As already reported, the increase in revenues was mainly driven by PPHE’s increase in occupancy to 72.4% (FY 2022: 60%), but

this is still below the pre-pandemic level of 80.6%, while ARR was up c. 4.0% YOY to GBP166.8 (FY 2022: GBP160.4), well above

the 2019 level of GBP128.5. RevPAR also increased by 22.5% YOY to GBP159.6 (FY 2022: GBP130.3) and is 19.4% above the 2019

level of GBP133.7.

▪ EBITDA margin improved by c. 2.3pps but remains c. 3.5pps below the 34.4% level achieved in FY 2019.

▪ EPRA NTA per share increased by 6.7% YOY to GBP26.02 (FY 2022: GBP25.2), demonstrating once again PPHE’s quality portfolio.

▪ Dividend per share proposed of 20p, which brings the total dividend for the year up to 36.0p.

▪ A clear beat to KECH and consensus estimates, which should result in a positive share price reaction. In addition, the company

sees an EBITDA margin improvement within a still positive outlook for FY 2024E.