Member Info for Sparks21

Trying to buy these is like trying to find weapons of mass destruction in Irak with Dick Cheney. Very tricky.

A mention in this article as a potential beneficiary of the budget.

https://www.fool.co.uk/2025/11/04/i-asked-chatgpt-what-the-uk-budget-means-for-the-ftse-100-and-it-said/

I topped up as this just looks like serious value territory to me, even despite some NAV erosion due to the potential change to CPI.

This is from chats with AI:

Grounds for Challenge?

- Judicial review is possible if:

- The change is deemed unfair, irrational, or procedurally flawed

- It breaches legitimate expectations — i.e., if generators invested based on clear, enduring RPI promises

- However, courts tend to defer to government discretion in public policy and fiscal matters, especially when consultations are held.

Precedents & Risk

- Similar RPI-to-CPI transitions have occurred in pensions, benefits, and index-linked gilts — often without compensation.

- The Office for Budget Responsibility and ONS have long flagged RPI’s flaws, and CPI is now the preferred inflation measure.

- Legal firms like Shoosmiths note that while RPI remains widely used, its methodology has been frozen since 2013, weakening its defencibility.

With an average cost of around 8m to plug a north Sea well, is this perhaps helping to hold back the share price? They must have a lot of wells to plug?

Strongest finish for well over 3 years. In December 2024 I put a one year target on these for 53p. Fingers crossed it might still be on.

Citadel have reduced their short a little. It's getting far too sweaty for Qube who have dropped their short from 1.00% to 0.15%. Will the others stick or twist?

Nice tick up today. Finishing above 45 should help cement a solid 6 weeks.

Roll on November the 6th for the Bank Rate decision. My money is on a cut given this inflation data combined with the poor labour market. GLA.

Couldn't resist topping up here today as I feel the drop is over played. These comparisons with Wilco's from some people here are a bit of a distraction I think as they are very different animals. I created a little comparison using AI of B&M now and Wilco's pre covid as follows:

Despite recent stumbles, B&M and Wilko are not comparable businesses—even when adjusting for B&M’s earnings downgrade and benchmarking Wilko pre-COVID (FY19).

- Scale & Profitability: B&M’s downgraded EBITDA still lands between £470m–£520m, dwarfing Wilko’s £34.8m pre-tax profit in FY19. B&M generates nearly 10x the operating cash Wilko did at its peak.

- Store Strategy: B&M thrives in out-of-town retail parks with low rents and high basket sizes. Wilko clung to high street locations, burdened by rising costs and declining footfall.

- Leadership & Agility: B&M has brought in Tjeerd Jegen, a seasoned turnaround CEO. Wilko remained family-led, slow to pivot, and drained by dividend payouts.

- Operational Discipline: Wilko’s FY19 recovery masked deeper issues—poor digital presence, fragile margins, and weak cost control. B&M’s recent accounting error is serious, but not systemic.

In short, Wilko’s collapse stemmed from structural weaknesses. B&M’s challenges are tactical and fixable. Unless they ignore the warning signs, they’re playing in a different league.

I topped up again today too following a little profit sale at sp of 375 last month. Shorts now approaching 10%. That is a lot of shares to be buying back when these shorts pull the trigger. Any bad news is surely fairly priced in. I'm predicting 36 to 39m pre tax profit at full year (based on the half year update) and hopefully some debt reduction too. I'm looking also at the fact that 4 directors bought stock in August, and I think 3 of them didn't own the stock before. This totalled about £185K all between a sp of 358 and 385. These shorters must be getting sweaty here. Will they want to sit through the Budget where news on the Energy Profit Levy could surface? To quote Mr Clint Eastwood, "You've got to ask yourself one question: 'Do I feel lucky?' Well, do ya, punk?".

I forgot Vietnam: The newly acquired Chim Sáo and Dua fields (53.125% stake, 25,000 barrels/day) could contribute ~£107 million post-tax, with a 35% tax rate and leaner costs than the UK. That could take post tax profit in 2030 to £627m.

News today: JPMorgan UK Small Cap Growth & Income reported a that NAV per share fell 3.6% to 362.6 pence at July 31 from 376.2p a year prior, with this decline offset by dividend payments.

Detractors over the year included subsea equipment rental company Ashtead Technology Holdings PLC, said the trust, as Ashtead Tech faced concerns around its end markets and contract delays.

I'm a long term holder here but have topped up today while we sit around a 5 year low, based on the following:

Everyone is welcome to pick holes in this! If Brent crude averages around a modest £52 per barrel in 2030, EnQuest could generate around £520 million in post-tax profit, spread across three key regions. 2030 doesn't feel very far away to me.

In the UK, with expected production of 30,000 barrels per day, EnQuest would generate strong pre-tax cash flow—but the punishing 78% tax rate would slash post-tax profit to around £84 million. That’s a stark reminder of how the Energy Profits Levy distorts returns, even when prices aren’t at windfall levels. Of course, this may change on Budget day.

Malaysia, producing 20,000 barrels a day, benefits from lean operating costs and a much friendlier 25% tax regime. It could deliver around £247 million in post-tax profit—making it the stealth cash engine of the portfolio.

Indonesia, where EnQuest is targeting 35,000 barrels a day via its 40% PSC stake, could contribute around £189 million in post-tax profit. That’s assuming moderate costs and a 30% tax rate. If the Gaea blocks deliver, this could be a game-changer.

So while the UK remains a solid base, it’s Malaysia and Indonesia that offer margin, resilience, and growth. Total post-tax profit in this scenario: ~£520 million. If oil prices rise or Veri Energy lands a major contract, the upside could be even greater.

The dividend is also approximately 5% at these levels. I'm actually excited to be buying this share today. Recent, all be it, small director buys also give me confidence.

Shorts now at over 8.5%. If these guys don't know bad news is coming then they must be getting pretty sweaty. Sweaty fingers hovering over the buy button perhaps, just waiting for someone to pull the trigger.

Looks like bargain territory to me. Topped up today. This time next year we should see a pe of 10 to 14, a big discount to NAV and a tidy dividend. The investment case looks solid imo.

BridgeofDon: Nice work. I appreciate your analysis.

Lower interest rates should help too.

Yes, debt is holding this back imo. If they can keep eating away at that debt pile and keep growing profits then this will hopefully do well over the next year or two. Nice to see us doing better than spoons for once!

I've loved owning this share as per the previous message. Bought in at 1400 in late 2020. I've pretty much sold out today and yesterday with a 253% gain. I don't pretend to be good at investing. I've lost nearly as much as I've gained but I've learned a lot over the years. The PE has gone form 9x then to 17.5x now. My real concern, however, is how long the CEO carries on. I believe he's 70 or so now. John Morgan has been more than just a CEO; he’s the cultural anchor of MGNS. His leadership style—low ego, high execution—has fostered a reputation for reliability, discipline, and long-term thinking in a notoriously boom-bust sector. I've kept a much smaller holding and will buy back on weakness if it occurs. Good luck to all the long term holders and congratulations on a rare quality buy.

I agree. One of the best shares I've owned. Just for a bit of icing on the cake: today is also ex-dividend day.