Member Info for Straycat

At the recent Capital Events Day both JF and SZ looked pretty relaxed for two senior executives effectively relaunching their corporate business dividend model on an unsuspecting Institutional/Analyst audience.

They will have already known about the upcoming VCP news announced yesterday and its potential impact on their personal wealth....that would have been quite soothing and restorative for the poor souls.

Also I reckon they will have had advanced warning of the questions that would be posed. Quite standard, nobody wants to field unscripted questions at such an event if they can avoid it.

And no one asked about the VCP at all!!

So I return to the question re the real VCP motive if not to enrich the two of them, and if so, why?

surrey,

Couldn't agree with you more about realising the true value in the share price...of course it's not helped by the current Barc Duo activity.

But sooner or later they will have satiated their client(s) requirements.

On the matter of the now defunct VCP, you've got to ask yourself what was its real purpose?
It certainly wasn't;

'reward(ing) the outputs of the successful implementation of the Company's strategy through Total Shareholder
Return.'
as stated in the original document.

It's already overrun the $20m cap which was meant to be in place as a backstop for the whole 5 year implementation period!.

Mikey,

We don't know how big their order book for GKP is, nor who they're buying on behalf of (though we might guess), but have you got a view on:
a) How many they might have squeezed out in the last month?;
b) How normal this level of MM buying intensity is in your experience?

Nearly Newbie to TLW.

I bought into this stock in Feb 2018 @ a weighted av. £1.86. At that time the chat was all about the debt reduction need down from $3.4bn and all talk of dividend was rubbished.
The future was bright, and the broker forecasts reflected that.
I sold in May 2018 @ £2.62 by chance...I needed money for GKP and I'd ran out of available funds...

Fast forward and now it's hedging its output @$56 a barrel for the next two years and selling the rest spot, which looks smart to me. Apart fro a first quarter glich volumes are on the up, there's a renewed urgency to explore, and the divi has appeared!

I note that the sp now closely tracks the oil price and Dabbler1 has explained why (thanks Dabbler), but I'm looking to get back in.

Is there anything unusual that I'm missing?

Bravedog,

Based the available analysis, we can agree that the minimum hurdle market cap is set @ the revised $350m year 0 target rate.

And we've been discussing the ramifications of the VCP for some time, trying to evaluate its potential impact on GKP performance.

I just find it 'a bridge too far' to move from there to the conclusion that, as a consequence, there must be a seismic announcement ( or series of announcements) tomorrow for the VCP to have any material meaning to the management.

Isn't it more likely that they fail and the VCP rollover applies?

Incidentally, on this occasion I would happily be proved wrong!!

Your market cap @ $538.2m - $98.6m = $439.6m is identical to the Year 3 minimum market hurdle cap @ 8% compound using the revised $350m year 0 start point.

$440m/229.4m shares = $1.92.

This minimum hurdle market capitalization was higher than

'the highest market capitalization at any previous date when nil cost options were banked.'
as quoted in that note on P10 of the VCP.

If my interpretation is correct...
.

Bravedog,

What is your interpretation of the note to the illustration on P10 of the VCP:

' * The actual market capitalization is the higher of 8% p.a. compounded from the starting market of US$300m (minimum hurdle market cap above) and the highest market capitalization at any previous date when nil cost options were banked'.

Bravedog,

On my reading of the VCP the Remuneration Committee are under no obligation to treat the participants pari passu when awarding Performance Pot Options. Hence the awards aimed at JF and SZ exclusively.
Similarly, they are under no duty to explain their award allocation of Nil Cost Option shares. As long as they have been earned and are in the Performance Pot, the Committee can allocate them as they wish, up to the prescribed limits (JF @ 35%, SZ @ 25% and 20% the rest).
The allocation of those Options in 2016 and 2018 are not necessarily related to any VCP participant formula, but are a demonstration of the latitude that the Committee have under the VCP, in this case, to 'reward' JF and SZ first.
The other participants will get theirs later.

Bravedog,

Yes, I've looked at the Option grants too and I've seen your workings. As for them being wrong, the VCP is so constructed as to be capable of various interpretations.

Certainly I am unaware of any formal VCP revisions so as to incorporate that changed base market cap.

But if the $350m base has not been implemented then why refer to it changing in the first place?
Maybe they just thought better of it after discussions with 'interested parties'?

Hi Cockeye,

Glutton for punishment aren't you? Me too.

The short answer is that, barring tempest and/or Armageddon, the Board and the other 'key drivers' ' Nil-Cost Options are safe, imo.

This is because the base market capitalisation figure used was too low, and the consequent annual minimum hurdle market capitalisations,set at 8% compound growth, were equally unambitious.

So, the original base figure used was $300m, and the original compound growth assumed was 10% for minimum hurdle purposes. This base figure was then lifted to $350m, and the compound growth target was reduced to 8% after discussions with 'interested parties'. I wonder who they were!?!

The effect of the above would have been to set the minimum hurdle market cap AT END YEAR 5 @ $514m (i.e.$350m * 5 years compound growth @ 8%). I have seen no revised VCP confirming this, but it follows from the announcement to increase the base market cap to $350m.

To put this in context, today's market cap @ £2.55 is c.a. $760m.

So while the Board aren't in control of current DMM activity, they'll be pretty relaxed that a short way into year three of the five year VCP they're already way ahead of the game even at these sp managed levels.

Truth is, the VCP was developed by Corporate lawyers to secure the long term services/loyalty of the Board. As such, it is a highly structured and deliberately opaque document enabling maximum flexibility in its interpretation by the Remuneration Committee imo.

And it would be a surprise to me if JF and SZ were not influential figures on that Committee.

As I've said before, I really want to be a VCP participant.

My VPL plays havoc with my self confidence. The full length mirror is a definite no no!

It's my own fault what with a massive lard arse and a penchant for budgey knickers.

Anyway, back to the gym....

Also GKP has attracted Blackrock into its fold with a 5% investment, not a prospect open to RPT because of its shareholding structure.

But acquisition specialists must have us on their radar....no debt, large cash pile ready to go, and as 2018 results will show, massive uplift in sales, profits and net assets.

A real success story.

And no declared plan for growth.

Nobody here has given any meaning to his actions.

What's on his mind?

Whatever he was thinking when he bought in August 2018 it was still bugging him in February this year.

And it can't be that he was in it for trading purposes alone... he had ample opportunity to cash in before end Dec.

Anyway, given the share price collapse, that wouldn't explain him going back for more in Feb.

Or has he just called the upswing wrong...twice? Hmm...

So what's he got on his mind?

If he were positioning for a bid it would have to be agreed to have any chance of success. So he would have had to have scoped the land before Aug last year and decided that it was on.

Which would mean, by default, that Vadim Novinskiy would have been fully aware of his intentions.

Is that at all likely?

Or, like I say, maybe he just ballsed it all up....twice.

Not aware of any Oligarch Billionaire idiots though.

The basic truth is that this is a strong business with first class fundamentals and a burgeoning cash pile that must get invested sooner or later.

I'll keep buying.

The new dividend policy was engineered specifically to entice new institutional investors imo.

A little early, but maybe it's gaining traction?

I'm baffled by the current sp and the apparent market inertia following an excellent Q1 performance.

It doesn't concern me though because of the rock solid fundamentals.

But like you Krok, it does make me wonder about alternative outcomes.

Hi Cockeye,

The LTIP announcement, both in its nature and timing, had nothing to do with the decision not to conduct a buy back scheme.

Listening to Sami at the CME, the decision to entice new long term investors via the new aggressive dividend programme overwhelmed any reasoned arguments about buy back. Though he did leave the door open to review.

Pity...they could and should have done both. They were not necessarily mutually exclusive events.

A missed opportunity.

The LTIP award amounted to some 1.2m shares vesting in three years with a strike price @ £2.54. Any buy back would have made no difference to those award values.

Watch out Stroan, the Krok's about!

Second half 2018 cash generated = $13.3 m.
First Quarter 2019 cash generated $ 9.2m!

All good.

We are not worthy.....

Back on planet earth, got a view of 31/3/2019 upcoming cash balances?

Nickel,

You clearly haven't read Krok's post assertions as to his trading foresight and uncanny ability to predict forward share price movements.
If only I had his uncanny instincts I too would own nearly 400k RPT shares like him, ready to sell @55p!

The man's a genius!

Did you read that I've asked him to mentor me!!!!