The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
You're a manipulating dumbass. Volatility benefits PLUS, and their office is miles and miles from Gaza, but you don't care do you, because you have an agenda of stock price manipulation via share chats, which is the dumbest thing I've heard all year, this ain't a penny stock you absolute imbecile. Take your worthless chat elsewhere.
I would like to have clarity on where THS stands on the PGM cost curve, including chrome contribution at different chrome price levels. Also Karo, as a standalone operation. I would like to see a chart of where the big mines stand on the cost curve, vs THS at various chrome price levels, and Karo, to offer a visual representation of who will shut production first if PGM prices continue to fall from here. This is important to understand and I can't find such information.
Interesting view that Karo would be loss making at current PGM basket price level. Can anyone verify this please?
I would suggest raising the dividend, even a little, to show confidence in the outcome - don't buy back stock and further kill liquidity.
Https://newtelegraphng.com/fg-resolving-exxonmobil-eni-issues-minister/
"Lokpobiri said, “These things are taken on a case-by-case basis; Shell will come, Chevron will come – as they come, we are dealing with them, and we are not going to waste time in dealing with them – they will resolve it, all those problems,” he said."
Https://www-thetimes-com-ng.cdn.ampproject.org/v/s/www.thetimes.com.ng/2023/09/nnpcl-gas-petroleum-ministers-assure-of-ob3-gas-pipeline-completion/amp/?amp_gsa=1&_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_tf=From%20%251%24s&aoh=16960897225032&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fwww.thetimes.com.ng%2F2023%2F09%2Fnnpcl-gas-petroleum-ministers-assure-of-ob3-gas-pipeline-completion%2F
https://www.majorwavesenergyreport.com/ob3-gas-pipeline-project-ekpo-tasks-contractors-on-december-deadline/
They're still talking about completion by end of 2023. I suppose Q1 is more likely, and ANOH commissioning will take a further 2-3 months I guess. In any case, SEPL will provide an update at Q3 results. We've already waited several years for this, what's another couple of months.
Weak response Barcap. You should substantiate your negative view. You become background noise if you can't back up strong headline statements with some analysis.
I think where I've lost confidence is with the worsening financial position and surprise that they have been capitalising significant cost which if had been expensed would have resulted in much lower EBITDA margin. A lot has to be taken on faith here, underpinned perhaps by the rapid growth of the end uses cases. But I don't see why they are so clearly in trouble, as you suggest.
Barcap, I would be interested in being spoon fed your detailed viewpoint on why this is a short, also it should also assist in market discovery of the right share price for this company (which will be in your interest if you are correct)
I would look at it from the other direction perhaps: what evidence is there to suggest the MPNU deal won't go through?
Yes Trek you're right that the special is not guaranteed, although neither is the base, however above $70 noises suggest the special can be expected. Roger has said that they initiated the special in order to raise the payout whilst providing the board flexibility if oil prices fall or there is another need for the cash, but that the intension is to be predictable and consistent as possible. I doubt the quantum of the special will decline in 2024 if POO remains >$70. That's how I get to 17c.
The fundamental driver of rising dividend here is not only strong OCF and expansion of OCF next year with ANOH, but also the fact that there are limited investment opportunities. Oil/gas projects but even renewables projects take years given how hard it is to get anything done in Nigeria, which depress realistic IRRs and frankly discourage big expansion projects. SEPL's board want a proper valuation from the market and understand that achieving this requires distributing more of the cash generated to shareholders. That is why the special can be expected at these oil prices, and ANOH's additional cash generation must also find its way to shareholders.
The risk to this is that they come across a large scale organic or inorganic opportunity, or the POO collapses.
All the broker reactions are broadly positive, noting these issues relate to their transition to being an ASIC provider.
JPM: Outlook & Guidance. The company has reiterated FY23 revenue guidance of $340-360m of revenue or $350m at the mid-point. EBITDA guidance for FY23 is $87m (c25% EBITDA margin). With 1H margins at 17%, the implied 2H margin for the company to meet full-year guidance is 33.5%. We believe that the revenue mix in 2H will shift from lower-margin silicon business (acquired from OpenFive) to more License & NRE revenues, which would catalyze sequential margin improvement.
With no changes to company guidance, we do not expect changes to FY23 consensus.
Https://www-oedigital-com.cdn.ampproject.org/v/s/www.oedigital.com/amp/news/508169-exxon-pledges-more-nigerian-oil-output-presidential-spokesperson?amp_gsa=1&_js_v=a9&usqp=mq331AQIUAKwASCAAgM%3D#amp_ct=1695576158260&_tf=From%20%251%24s&aoh=16955761333371&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fwww.oedigital.com%2Fnews%2F508169-exxon-pledges-more-nigerian-oil-output-presidential-spokesperson
According to the statement, Tinubu pledged to solve outstanding issues and "crush" all bottlenecks slowing the flow of new and large-scale capital into Nigeria's energy industry.
"The knotty issues require direct supervision on my part. Despite many contending obligations, I will sit down and oversee the process of removing these encumbrances," Tinubu was quoted as saying.
"Nigeria has never been more ready for business than it is now," he said.
(and I am certain the MPNU topic came up in the conversation!)
Boring low quality contribution, take it somewhere else
It is safe to assume that above $70 oil the baseline dividend is now 15c (4x 3c + special to bring up to 15c which was paid out last year), which works out at 8.7% yield at 127p. Underscore that's very much the baseline now. In my view it will have to come in above this, not only because the special dividend post full year 2022 results was 5c, which will surely be repeated which will make 17c annualy, but also because ANOH will be generating $60-70m of cash flow to SEPL once fully operational and this can only find its way to shareholders via dividend, which amounts to at least a further 10c of dividend, i.e. 25c come 6-12 months from now. Something to look forward to!
These are large volumes for a relatively less traded share - I don't know what MMs keep on their own books but would be surprised if they do such amounts in a name such as Seplat. I'd be interested to see who has raised their positions. Lately it has been Africa funds and income funds that are close to the situation and understand the opportunity. It is good to see big volumes going through at elevated price levels, in the context of the last several years. The chart is a really good one too as Seplat has steadily achieved higher highs and higher lows for some time now - since the 2020 low basically.
Big volume going through today
Very pleased to see high volume/value traded today in Lagos: £1.9m in traded value at 190p share price equivalent. Another resounding thumbs up for the opportunity here.
Oi Oi Savaloy, the VIX has been on a downward trend since March, from a level of around 20 in the first half to a level of around 14 since June, so PLUS would be expected to see softer revenues in the second half on the basis of lower volatility, generally speaking. Apart from this, the UK mid cap market has been soft since June, and also Odey continues to reduce their holding (vs in the past they were always buyers) from 1.78m shares end June to 0.7m shares today. Combined, it is not a great surprise that the share price has been on the soft side, but this overlooks the fundamental qualities of the business and very low valuation. My belief is that as PLUS shows concrete progress in the US, where they hope to grow to $250m in revenues in 2-5 years time, investors will wake up to the consistency and diversity of the company's cash generation and gradually bid up the stock to a more appropriate valuation level. I see no cause for concern here. This level is an opportunity for further accumulation, IMO.
I beg to differ dohers. At no time over the past almost two years has the MPNU acquisition looked a more likely outcome than today. Tinubu's advisory council on the petroleum sector has explicitly advised completion of these divestment agreements. Eni's sale, without offering NNPC first right of refusal, sets a precedent that will be impossible for a court to ignore, in the likely event it even goes to court. Seplat has never had any really powerful insiders, yet is one of the largest indigenous players in oil and the largest in gas today, from nothing a little more than a decade ago. Still, the former founder Avuru seems to have the ear of the president on petroleum policy, so the company is not without lobbying muscle. I'm not naive about how Nigeria works, but the law and courts can be expected to function, eventually, if it must go to court. The rising local share price of Seplat suggests there are local investors who are also believers, so I'm not alone.
Anyway, with or without MPNU, SEPL is a big dividend payer and will enjoy a step-up in cash generation in 2024 when ANOH is operational. Catalysts are in place, time will deliver.
Https://www.thecable.ng/sources-nnpc-against-sale-of-agip-nigeria-to-oando-over-breach-of-agreement
"In a statement, the NNPC said it is not against the sale of Agip Nigeria to Oando, saying its subsidiary was only raising concerns over JOA terms.
“It has come to our notice that a letter written by NEPL to NAOC is being interpreted to suggest NNPC Ltd is opposed to the sale of Agip Nigeria to Oando. This is not true,” said Garba Deen Muhammad, chief corporate communications officer,
NNPC.
“The letter was sent by NEPL, an NNPC Ltd subsidiary. But pls note that it is not an objection to the transaction. NEPL is only drawing attention to certain important clauses in the JOA, which might have been overlooked in error. Adherence to those clauses will protect the transaction now and in the future.”"
Do I read that in principle NNPC is not against such divestments without being given first right of refusal? Interesting.
Dowgate Capital:
TPXimpact has released a Trading Update which indicates LFL revenues grew +11%
in Q1 and +26% in July and reiterated its FY guidance; the AGM is on 28th
September. The group has performed strongly this financial year, with LFL growth
of +11% in the Q1 to June, while the operating margin was in line with budget. New
business wins in Q1 exceeded £90m driven by the two major contracts with HM
Land Registry (up to £49m/4yrs) and Department for Education (up to
£27.5m/2yrs). As these contracts have come on stream LFL revenue growth has
accelerated from +5% in April/May to DCe +23% in June and 26% in July which puts
the group firmly on track to achieve its guidance for 15-20% LFL growth in FY24,
with an EBITDA margin of 5-6%. Net debt ended June at £17.9m and the group’s
new banking covenants came into effect on 1st July. We retain our Revenue and
EBITDA estimates which are set in the middle of the guidance range in both fiscal
2024 and 2025. We maintain our view that, as confidence builds in the delivery of
revenue & EBITDA and debt is paid down, very significant value will be recreated in
TPXimpact equity. We retain our Buy recommendation and target price of 90p.