George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
It would be very informative to know what the real issue price of shares in circulation was. They started with 300m in 2013 but nearly all the shares in issue are ones released on sub ipos ( probably in the range of 110 to 130) and accretive to the nav. So far from being just shy of issuance they must have actually fallen some 20% or so not allowing for dividends. If there was a way of ascertai ing an average issue price it would be another useful tool in determining value now.
Put my money where my mouth is and went for for a first tranche of 10k at 98.14 just now. Pound cost averaging in with the volatility. Btw, having studied the results I can see the fixed price element of energy is somewhat over 50% in the near term.
All the brokers are at hold or buy. But the Market ( at a 23% nav discount) has other thoughts. My concerns are the for the energy being sold on the open Market and not fixed . About 50%, I think? Nevertheless I'm looking to buy, and surely both interest rates are topped and energy prices closing in on a bottom. You'd think further nav downgrades were limited.
Results seems fairly transparent, 7p down on nav 7p paid out and hence a clear accounting balance of zero profit and no off balance sheet jiggery pokery( it's something like a p/e of 500 which makes sense)Disappointing that there was no surplus dividend cover ladt year. Haven't got any of these just down, but any opinions on whether we are at the bottom on nav downward adjustments, which could again give a shocking price to earnings ratio and is there likely to be better cover on dividends in 24.
I doubt anybody would a subscibe to a sub ipo at 20p, having to wait weeks before the shares become tradeable when you can get them at 20p and trade instantly.
Very surprised this has gone this low, no skin in the game; but heck if they can't liquidate a 75p nav for 20p ( however distressed the sakes are) then something is horribly wrong with UK accounting.
This really has become a fallen star, just wondering if anyone would proffer an opinion on why? I haven't followed it lately, but I presume the low p/e was due to lower capital values? Maybe, geographical diversity also doesn't help income, I note Greencoat hasn't had similar problems, wholly based in the UK. And maybe solar doesn't get the fizz for your bucks had they just stuck to wind. I really don't know.
Whether or not the Bond covenants have been breached at close you could only get 87p for RGL 4.5% 2024 maturing in August at 102.25 with coupon. Simple maths..that's a 17.5% risk reward in just 6 months or 38% annualised.
Now either that is the Mother of all Market mispricings or there is something cataclysmically wrong with RGL. And what price for rolling over that debt
40% annualised return I should have said. Just unbelievable risk premium bring demanded on RGL debt.
You'd think they could liquidate this one and at least have 20p a share left over. However, first call on assets would be bondholders and even there RGL 4.5% is trading at a 15p discount to the pound with only 6 months to run...that's a return of nearly 40% if the bonds get ŕedeemed at a pound in August ( I think it is). To price debt at that level means the Market ( it might be wrong) considers RGL a complete basket case.
I'm in agreement with you, I'm trying to think why the Market sees it differently. I suppose a third reason is trend, and a downward trend is hard to get out of . My opinion is that the fall to 60p is baffling.
Agree with previous posts, it's about sustainability of the Dividend and then comparing a possible reduced dividend to cash rates that look likely to be elevated north of 5% for years not months. Clearly our own MPC haven't got the balls to tackle inflation, and that will likely lead to sticky inflation persisting longer along with higher rates. The Market are right to have lost faith in the MPC's ability to control inflation, they have made simply dreadful decisions over the last few years, Cath Mann excepted.
As most of the capital here was raised from sub ipos as high as 130p..it's getting to the stage that if you had invested pro rata from the initial offering and subsequent sub ipos you would be looking at a woeful return including dividends. Indeed if you had missed the initial share price surge and then continued to invest in the sub ipos you are almost certainly looking at a loss atvthsws distressed levels.
The problem here is that better quality assets also attract big discounts. 60% maybe overdone but why risk it. GCP Infr ( middling quality)...40% discount...TRIG ( premium quality) 20% discount. Or heck you can just bang it in NS and I at 6.2%.
Hugh Pill's comment last week that he intended to stick at 5.25% did wonders for adjusting rate expectations and indeed GCP stock price.
Reality maybe dawning again. CPI should come in at a woeful 7.0% this month, UP. We are still behind the curve and trailing the FED ( 5.5%) that have inflation under control. Anybody would think it was the other way around and is was this side of the Pond we had inflation under control. Meanwhile we cowtow to the commentators that beg for cuts, Liam Halligan in particular, like the MPC are imbeciles for considering rate rises. No consideration for the fact inflation has been four times over target for two whole years and that you we need five years of deflation to get back to target. Of course the 2% target is meaningless now. Over the eighteen year cycle, inflation has averaged 2.8%. The Chumps on the Committee have missed target by 40% and nobody believes in the target anymore.
Amazed the drop has continued down to 68p.I'm afraid the Doves have caused this negative sentiment on Bond proxies. Instead of a short sharp shock the Bank have messed about with quarter point rate rises..Dinghra and Tenreyro tried to stick at 3%, which now seems laughable in the face of record service and wage inflation . Meanwhile debtors are moaning about negative real rates and the Establishment make all the wrong noises which the Market perceive have an inflationary bias, not even close to a 2% target. Sorry but if you are behind the curve the pain will last longer, only Cath Mann on the MPC appears to realise this.
It's been riding at a 4% yield discount to the maximum available one year fixed bond on the open market, where you can currently get 6%. So hitting a 10% yield was to be expected.
The inflation outlook is frankly beyond awful, record wage inflation this century, record service sector inflation and a core rate mired at 6.9%. The BOE have basically completely lost control, they will have to keep raising to probably a 6% base, and no relief in sight until 2026. Meanwhile the Market is mindful that journos are putting pressure on the Bank to pause rises . But all this quarter point slowly approach does is mean rates will have to stay higher for longer (years). Debtors need a 6% immediate base rate rise, because restaurants are rammed, you can't get a trader for love nor money. There is simply a chronic labour shortage and billions sloshing around in unearned Covid printing. 90 % of consumers are still loaded.
Shocking wage (record raises)and inflation data.( record service sector inflation, unchanged core), plus the spectre of a Labour Government in 2024 killing the price now, sub 2017 ( Covid crash aside). And heck you may well be able to get 6.5% risk free on a bond soon. Boe will have to keep raising, forget the hype on yesterday's CPI drop, the figures were beyond dreadful. I guess BBC journos with their big mortgages were clutchimgvst straws touting 6.8 as a success. Look at Core and Wage inflation.
Absolutely agree 4% + over SONIA looks harsh
SONIA currently 4.4% / GCP 8.8%......meanwhile the 7.2% wage rise for the year was another real shocker. Base rates are 4.5% are lagging horrendously to get ahead of the curve. The fact that Bailey is showing no remorse or apoligy for his imbecilic comments that the post Covid inflation was transitory shows how little accountable the MPC have for their massive errors and loose Monetary policy back in 2021.
My comment that this had tracked the base rates 4% over Sonia was based on approx. 9% over 4.5% currently. Were Sonia to go to 5.5% as predicted then this would need a 10% yield which means a price of 70p.