Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
I should point out that my comments re: the boggling returns were mainly, if not entirely, aimed at the Magnificent 7; it's sometimes easy to forget that the Magnificent 7 aren't the only constituents of the S&P 500 ;-)
Tich, You state that LGEN has gone up 6x over the last 30 years whilst Zac you state that the US market has gone up 18.5x over the same comparative period. Tich/Zac, are your figures cum-dividend? If not, they should be. There is a huge disparity between the dividend yields on US shares compared to UK shares which is mainly driven by the much less favourable US tax treatment of dividends. I'd check but I haven't got access to any data going back more than 10 years.
Also, is it reasonable to compare the return on the whole US market against the return on a UK insurer? How do US insurers compare to LGEN?
Zac, I would question whether the US tech stocks are actually now producing the mind boggling returns you suggest. On first read, when you compare their FY23 results with their FY22 results many of them generated YoY net income increases of over 100% but when you compare their FY23 net income with their FY21 net income most of them have actually flat-lined (their FY22 results took big hits from large intangible asset write-downs) and their Q1 FY24 reporting season seems to have kicked off poorly thus far (increases tempered by expected falls later in the year).
A lot of the Magnificent 7 are currently trading on P/Es in excess of 25, suggesting that investors, to the extent that they've actually given it any thought at all, are currently expecting them to double their net incomes again in FY24, which appears highly improbabl). It augurs that the Magnificent 7 are all due a significant market correction. Whether that will actually happen rather depends on the wall of money that investors seem intent on throwing at them despite, rather than because of, their results. Investors seem hell bent on ignoring all the traditional valuation metrics and happy to spend significantly over the odds; in any other walk of life, they'd steer clear with a barge pole until the valuation metrics were more aligned.
I'm not suggesting that the Magnificent 7 haven't done well over the last 30 years (to the extent that they've existed that long) but their current valuations are (again) completely out of kilter with the near term reality.
An £840 difference between 300k at 2.28p and 300k at 2p. Given the relatively small volumes traded (£s) each day it's hardly life changing.
H88, I think you'll find that the TheCumbrian is referring to the price fall today (4.5p/14.63p) not the normal 2:1 dividend split between final and interim dividends.
Shatter, Ignore him. I think the dividend still remains relevant to shareholders who were holders before it went ex-dividend, at least until 23 May when the money is in the bank, for comparison purposes pre and post dividend. That said, I think it's reasonable to conclude (this time) that selling before it went ex-dividend and buying back after might have been the wisest choice (particularly if you'd managed to sell at c495p in early April and bought back at c455p on 16 April)
Just checked my dividend receipts. It was end of July and end of September in the three years prior to last year. There was a delay to the preliminary results announcemnet last year due to the additional statutory accounting and audit work related to the acquisition of Appreciate Group (the results were released at the end of July rather than the end of May), so they may well revert this year to July and September this year. We should hopefully get a post-closing trading update early next week.
They don't pay quarterly dividends per se; they split both the H1 and H2 dividend payments into two equal instalments
Historically the H1 dividend instalments have been paid in late December and early March whilst H2 dividend instalments have been paid in early/mid September and late September.
A bit quirky I know ;-)
Hope that helps.
I think taking the fees from income rather than capital although understandable would nevertheless appear to be a change of policy from prior years where they've aimed to distribute all the income they've received. Perhaps they might clarify and confirm the change of poliicy (and why).
Also, I'm not sure that I follow the "income drag" comment. I would imagine that the purchase yield is forward looking; in which event crystallising trading gains (which I'm assuming is akin to selling shares cum dividend) and posting all the gain to NAV is a bit of a "cheat" (IMO part of the gain would be attributable to the interest foregone and that element should be posted to income to "square the circle").
PIs are a fickle bunch. These results were as good as baked in following the strategy pivot. SOS may have fallen short of its revised sales and profit targets but only fairly marginally. To have set a revised sales target of £46.8m and only fallen short by £500k in the current economic environment is actually no mean feat (the small loss, as opposed to the small profit, more or less followed the sales shortfall).
SOS's revised strategy is beginning to pay dividends (the profit before tax in H2 FY24 more or less matched the profit before tax in FY23. Overheads have risen but that was to be expected given SOS's new overseas activities in Australia and Canada from mid-Q3 FY24 onwards (which should now help bolster prospective H1 FY25 sales) and the push into bricks and mortar (costs are being incurred despite no stores having yet been opened). The delay in opening new stores (I think that at least one store was expected in Q4 FY24) might be disappointing but is in keeping with the management's cautious approach (they've proven themselves capable of being reactive to evolving events and I trust them to only move forward when they think the time is right and/or have the cojones to cut their losses if needs must).
They missed their revised sales target by c£500k which, with a c60% gross margin, would potentially have generated an additional profit of c£200k. A miss maybe, but not a disaster.
Overall, not too bad when you consider the current economic backdrop and how their peers are currently performing.
Looking forward, following the strategy "pivot" in mid-Q2 FY24, I'd currently expect SOS to breakeven in H1 FY25 based on H1 FY24 LfL sales and H2 FY25 gross margins and operating expenses. However, SOS is currently targeting a 17% increase in overall FY25 sales (c£54.6m) and, allowing for an increased weighting to H2, then a (say) 10% increase in H1 sales would be the current expectation which should then deliver an H1 FY25 profit of c£1.3m. Whether SOS thinks it can stay on target to deliver a 17% increase in sales in FY25 in the current economic environment remains to be seen.
I think we have to accept that it's currently a very challenging retail environment and if in H1 FY25 SOS can deliver both an increase in sales and profits in excess of (say) £500k then I think that would be a positive outturn. SOS made a handbrake turn in mid-Q2 FY24 and it was always going to take at least 12 months to wash through (including being able to pare back the additional marketing overheads that would have taken on in expectation of a renewed and enlarged marketing drive) and if SOS had continued with it's previous strategy of chasing sales at the expense of gross margins, it's probable that its FY24 loss would have been significantly higher IMHO; when people are tightening their belts it becomes unrealitic to expect an additional (say) 10%+ increase in sales just to offset not only the gross margin that you are foresaking but the increased marketing and other overheads.
Is it any wonder that the UK market is so undervalued when brokers can't even be bothered to value Uk companies relative to their overseas-listed counterparts? Jefferied have just cut their target to 810p this morning but there is absolutely no way in the world that Jefferies, or any other broker for that matter, would ever accept a low-ball offer of 810p for SAFE. They are completely adrift and totally incapable of determining the value of anything. UK brokers might as well shut up shop now!
Well I know that the "high enders" still exist in my neck of the woods and I certainly dont't live in "... an area with higher than average property values and with affluent residents ...", quite the reverse.
That takes the total dividend for the year ended 31 March 2024 (FY24) to 9.96p (FY23: 9.46p). Can only assume/hope that they're keeping some FY24 income in reserve so that they can increase the dividend payout again in FY25. I don't see any likelihood of them increasing the minimum quarterly dividend payout above 2p at this juncture.
Any thoughts Momk?
3.96p! That's quite a bit less than I'd been expecting. Given that the puchase yield has been consistently above 11% for the last 12 months and their previously stated intention to distribute all income received (meeting expenses out of capital), I was expecting at least 5p minimum.
I'd beg to differ. I know of several niche, local retailers in my area alone who cater to the higher end of the market (and if they exist in my area of the world I assure you that they will definitely exist in yours too). They are there if you just care to bother to go to look (but it does mean that you'll have to get up from your computer and go out into the real world).
LOK this morning announced a recommended cash offer of c£378m (£11.10p per share) from Shurgard who are apparently the largest self-storage operator in Europe. Based on LOK's latest available accounts to 31 July 2023, that represents c1.64x of LOK's net assets or c1.53x of LOK's adjusted net assets.
Applying the same net asset multiples to SAFE's net assets as at 31 October 2023 (c1.93bn), you'd get a current market value of between c£2.95bn and c£3.1bn or between c£13.50 and c£14 per share!
Interestingly LOK is currently trading above Shurgard's offer price which seems to suggest that the market thinks that its offer is a bit low (although how the market suddenly arrives at that conclusion when it was only valuing LOK at c£8.70 at the beginning of the week, before the rumours seem to have started to circulate, is somewhat amusing) and that a competing offer might yet emerge.
TFIF tends to declare its dividends either mid-afternoon or after markets close, so there may be annoucement later this afternoon. Watch this space.
Relative to the price of tiles in speciality, high end, tile stores they are cheap. It's all relative.
You really do need to expand your narrow mindedness. When I said "pile 'em high, sell them cheap" you clearly didn't follow my drift. "Pile 'em high" = large volumes plus supplier volume discounts. "Sell 'em cheap" = relative to up-market, local, niche, low volume retailers.
Unlike you (obviously) a lot people are quite finicky about the tiles they buy. It's often a large outlay, so they like to touch them, feel them, compare patterns, matxh them with other fittings, compare them in different light etc. etc. That's hard to do online. This is exactly the same problem Amazon encountered and why they were forced to open bricks and mortar shops in the US after they'd driven all of the natural bricks and mortar competition to the wall. We all have different views on online vs bricks and mortar but one shouldn't just simply ignore the actions of one of the largest online retailers on the planet and simply persevere with the unproven view that bricks and mortar are dead. Don't be so naive.
Alfista, As I said in a previous post, TPT regularly reviews its store network and closes/downsizes where appropriate.
Have you also considered whether TPT's offering is something that might actually appeal in an area with "with higher than average property values and with affluent residents". TPT has always tended to offer a standardised line of products across all of its stores (it doesn't tend to change its product offering to meet specific local market demand) which means it has to carry fewer product lines and can maximise both volumes and supplier volume-based discounts.
I wouldn't be at all surpised to find more local, niche, up-market tile retailers trading in more affluent areas rather than "pile 'em high, sell them cheap retailers" if you follow my drift. I'm not disparaging TPT's products but its sales model has always been based on selling high volume, low/average value tiles rather than low volume, high value tiles.
I suggest that you have a wander around said Midlands town and tell me if I'm wrong.
Alfista, What do you want? If you want to sell tiles then you are going to incur cost of sales and, the more tiles you sell, the higher your cost of sales will be (you can't sell and incur zero costs)! TPT may have the highest cost of sales (£s) but it also has the highest sales (£s) and gross margin (%), so go figure!
Rent, rates, heat and light are not just the blight of bricks and mortar retailers (online retailers do incur some of these costs too, either directly or indirectly) and you don't just throw out the baby with the bathwater (sell your stores) because there's been a general economic downturn. TPT's current trading issues aren't simply down to increased online competition; all tile retailers are suffering. Badly run businesses, like Tile Giant, will always go to the wall eventually, regardless of whether or not they are trading through bricks and mortar or online. I wouldn't be at all surprised to see both online and bricks and mortar retailers going to the wall in the coming year but TPT is one of the strongest tile retailers in the market and there's no current reason to think that it will be amongst those failing businesses.
As Amazon has clearly proven, online cannot prosper without bricks and mortar (Amazon drove bricks and mortar retailers to the wall in the US but then had to open its own bricks and mortar outlets because customers still wanted to touch, view and compare before they bought big ticket items) Some bricks and mortar retailers will flounder but some will survive and I expect TPT not only to survive but prosper (I wouldn't be too surprised to see TPT expanding its own, existing online retail offering through ProTiler is due course).
Dessertstar, When was the last time TPT made £40m+ profits? Not in the last 15+ years! In part it's poor profits performance since 2008 is due to the c£100m debt it took on to purchase its own shares in c2006; that additional financing cost weighed down the profits performance for over a decade (which explained the poor share performance and the collapse in the share price) but that debt has now been repaid. Margins are lower than they have been historically due to the impact of Covid and input price inflation (these factors have affected all tile retailers not just TPT) but TPT is now in the process of rebuilding its margins, as outlined in its FY23 results and the recent H1 trading update. Whether gross margins can be increased back to 60%+ remains to be seen. There's no doubt that increased online competition will continue to apply pressure to TPT's gross margins (there's only so far that volume discounts from suppliers can take you) and I think that mid to high 50s, rather than low 50s, is a more realistic expectation. Online competitors will want to take market share from TPT but they won't want to drive it out of business because they are able to piggy back their own sales off its bricks and mortar outlets (think Amazon).