Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Just to give some of you more recent arrivals a summary of how I see this one. Skil floated this on AIM IMO to build Indian infrastructure with western money, and they were very well supported at flotation with what I believe was the largest fundraise on AIM in 2010. Some see this as eventually being a bit like JLIF - John Laing Infrastructure - which takes projects off the parent group. The parent of Skil Ports is the Skil Group. The boss is sometimes described as India's Richard Branson, perhaps a little better at forward thinking ideas than maximizing profit, but he's an established figure in Indian business. They hit an unexpected two year delay trying to get the project off the ground and navigate Indian bureaucracy - which has played a part in the long downward drift in share price - but they have managed to get this thing going at last, whereas others trying to get a port built didn't even get to this stage. They have appointed ITD Cementation to carry out the work, who have a long history and wide experience in this area. The Skil parent group - and members of the current management - have already built and sold a earlier port - Pipavav - to Maersk: http://www.apmterminals.com/asia/pipavav/ Pipavav Defence, in which the Skil boss remains involved, builds warships for the Indian Navy: http://www.afternoondc.in/business-investment/future-bright-for-pipavav-defence-and-offshore/article_99973 IMV the current price decline is all about emerging market weakness, and funds being forced to sell out of positions. The PR here is undoubtedly rubbish - as the port won't open for another couple of years there is perhaps little point in going around shouting about it right now - but they need to stop investors getting nervous by communicating better, giving a firm expected end date for the port build etc - this one requires patience, but ports tend to make great investments in the long term.
Now yielding 8.3% by my calcs
There was a sell rec on CAML in the Investors Chronicle last week. Thinly traded stock so it was enough to knock it down. IC said they were fully valued so it was effectively a rec to take profits. I disagree strongly with that as they are clearly moving ahead with getting 100% of Kounrad sorted and then expanding. Edison have a 305p price target on them should they expand to 20000k per year - think they will go for an expanded plant and 15000k a year myself so looking for 250p, at which point the larger question becomes, how will they spend all the money they are generating?
The 5 year gap between listing and opening the port is driving this down to silly levels. Once the newsflow starts up it should be generally positive, as they update us on rate of completion. Every week that goes by is roughly another 1% of the port completed. Should be 5-10% done already.
The reason this is doing so well is simply that they have a great project, a 25 year cash cow. Most other AIM miners are slogging along with scummy projects just trying to keep alive. I believe this is step 1 of 3 towards completing the Kounrad transaction to the point where they would go ahead with a second plant or plant expansion. From listening to a previous interview, I *think* I am correct in saying that we now get 100% of attributable copper rather than the prior 60% - need to go back and check on that one!
Kounrad is a fantastic money spinner for a company of this size. I think this could turn into a very successful long term hold over the years, and climb into the mid tier bracket. Future success depends on how the management use the cash pile for their first investment outside of Kounrad - 2 or 3 years away, probably.
Not happy with these results. They are making virtually no money. Compare statements to the final results. What happened to the cash balances between 20th June and 30th of June? If you bear in mind they raised a chunk of money earlier in the year, they are effectively making 50k a month. Very poor. They need that Rosbunker deal. 31 Dec 2012: £1.1m Group cash in bank at 20 June 2013 is £2.4m Group cash in bank at 30 June 2013: £1.4m Current cash in bank: £2.4m
Well let's hope one of us is right and they haven't simply lost their copy of Sage accounting software :-)
I continue to think the most likely explanation is that they want the latest cash balance available to prove how the business has turned around. Maybe even the money earned this week will be material. Controlling the timing of a deal is virtually impossible for large companies, never mind small. I am surprised that they have been reasonably specific about Rosbunker. It suggests to me they have a potential deal and timetable to that deal which will stretch into next year. I am in another share which is expecting a similar transformative deal in Q1 2014, and they have spelt out every step in that deal in a powerpoint presentation. Would be useful if PAN could do something similar if it firms up, but maybe they have to keep it under wraps until the very end...
The cash position was a lot better than I expected. They are outperforming the majority of AIM shares by sitting on a cash pile and raking off the interest - there's a lesson there somewhere!
Agree, I think they are holding off so they can give us the very latest cash position, like they did in the last set of results. A share of mine reported today and gave the cash in the bank figure as of close of business yesterday.
Bought in here recently but there are always negative sides to a share. The potential worries are: - there is often some kind of "exceptional" in the results which lowers the profit. So we might be on a headline PE of 3/4 but after exceptionals we might be more like 7/8 so the undervaluation is maybe not quite so acute. - the company wants to expand. It is unlikely to do that from cash resources, so they might issue debt or print shares (but if the acquisition is good enough it's a net positive) - then there is random stuff, which happens to every company. Smaller companies are more vulnerable, one bad event can have a big effect. This share already had that with Rosbunker of course. But therein lies the opportunity. The price and mindset of some holders reflects the past, hopefully the future will be sunnier. I think this is a 40-50 million market cap company and should rerate, so long as it enjoys average luck!
Once built the port will last for 55 years - many soft patches and better patches over that timeframe. If India grows at 4% a year in that period, the economy will expand by 300%... great news if you run a port.
Good point but the market may decide to view it as a case of different exceptionals every year reducing the profit to a level of peanuts. Last time round they took a heavy hit from bad debts. At some point the exceptionals have to stop and a clean year of profit must show up - then it may well rerate. It would help if the interims made bolshie comments about future profitability. I can certainly see a case for profits nudging maybe 7-8 million on a clean year, giving this a PE of <3... with the hope of a cash dollop from Rosbunker. You would expect a company treading water to get maybe a PE of 8 or 9. What price for a company slowly moving forwards but with unpredictable one-off costs? Hard to say but a good deal more than 20 million IMO. Here's hoping...
I think you might be waiting a little while longer for the market to appreciate these. It really needs Rosbunker resolution. If you look at the finals, they give a good idea as to what the interims are going to say from the line: Group cash in bank at 20 June 2013 is £2.4m (at 31 December 2012: £1.1m) Bear in mind they raised >800k in March so for Jan-Jun 2013 they added about 500k to company funds. That is pretty meagre, but better than going negative. Hopefully they can stop issuing shares to shore up the balance sheet as the business transformation underway finally kicks in with better profitability going forwards. A 12-18 month hold for all this to become apparent, I would say.
Hi Pan, Mine was the buy at 20.25 so I can't take credit for the 50k. I had some money available today and it was a choice between this, Asian Citrus and Ashmore Global. This one won due to simple undervaluation and a chance of a rerating over the next 18 months. I think it's a 40-50 million cap masquerading as a 20 million cap and the gap will close once the Rosbunker situation is sorted, which management seem to be indicating is a high probability event. I also have a bias towards shares in the marine sector. They tend to be quite profitable, so long as you stay away from companies that own actual ships...
... is how long I've been watching this share, wondering if it would ever be worth a purchase. Today was the day. Positive momentum from the core business and the chance of a nice resolution to Rosbunker. Odds are finally favourable.
Yes but it's more likely to happen than the previous one, which was very generous to CAML. The other party has played a clever game here - let CAML take all the financial and technical risk of building and operating the plant, then get a bigger slice of the pie once it has been proved up. CAML a victim of their success in many ways. Hopefully the deal will go through by Q1 2014, after which the company can execute its expansion plans.
People have been building ports for at least 5000 years http://en.wikipedia.org/wiki/Byblos_Port Somehow I think they will manage