Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Re: @Emerald51 ...Is there any value at all in the actual BRAND...
There's no sufficient assets to cover other liabilities, there are creditors other than current shareholders, e.g. employees, suppliers, lenders, taxation, etc.
Any value CINE still has - belongs to them (brands, goodwill, equipment, cash balances, debitors/invoices to receive payments on, etc.) and not to shareholders,
as described in multiple RNS's - there's no whatsoever excess left belonging to existing shareholders/equity owners, not a chance.
It's "going to the moon" story being sold to naive and inexperienced. same old same old..
Sp history:
Aug-2017: 700p+
Aug-2018: 300p+
Aug-2019: 240p+
Aug-2020: 60p+
Aug-2021: 60p+
Aug-2022: 20p+
Feb-2023: 5p+
Apr-2023: 1p+
today: 0.3p+
Aug-2023: null/wipeout
It might help NIM but it also helps delinquencies and defaults because suddenly monthly payments are becoming unbearable especially considering recessionary environment and consequently lower income if not unemployment (as well as higher slice of income allocated to necessities because of inflation).
It's obvious that sp is sometimes diving well below your range' lower bound of 25p (by at least 20%) over last year, therefore these boundaries are rather wishful thinking (and it might get worse after release of next results).
Given their financials over last couple of years and base interest rate (consequently required return) where's this attractive level sitting at? 30p? 20p?
And then just peacefully wait until (a) maturity of gov debt then receive money (t-3 days) and on (b) day of maturity of bur issue ISIN: XS1391063424 transfer these money to close principal/face value..
Perhaps I understand this redemption in a wrong way but this "Notice of Early Redemption of Bonds due 2024" has strange conditions:
....being the higher of (i) 100 per cent. of the principal amount of the Bonds and (ii) the principal amount of the Bonds multiplied by the price, as reported to the Issuer and the Trustee by the Financial Adviser, at which the Gross Redemption Yield on the Bonds on the Make-Whole Reference Date (being 7 July 2023) is equal to the Gross Redemption Yield (determined by reference to the middle market price) at 11.00 a.m. (London time) on the Make-Whole Reference Date of the Reference Bond (the 2.75 per cent. Treasury Stock due 2024), plus 1.00 per cent., all as determined by the Financial Adviser....
To me it seems that clause (i) prevails, therefore it's economically irrational redemption since instead of paying money now you can just put these money into relevant gov debt instruments (in appropriate currency).
Topofthecharts
debt more than tripled, interest rate increased materially,
there's equity loss of 75% since 2019.
it will take at least 2-3 years before (and if) they somehow can hit $3b net profits (+ some growth %) even theoretically
(and at least a year or two still suffering net loss, third year probably slightly above break-even).
required return these days given bank rate and risk premium is above 15% (for NPV discounting purposes).
This is not so much about shorting (although this category may benefit the situation) but simply fundamentals.
Yet for some strange reasons this is already priced today like there's 100% success rate and no risks.
@lti: ...Businesses are taxed ALREADY on profits...
Moreover in at currently inflationary environment it's nominal gain
(or income for individuals or profits for businesses) what's being taxed, not a real one,
therefore more taxes collected despite the fact what people actually getting poorer.
so gov always wins no matter how disruptive politics is.
Empirically while base interest rates are in single digit range - one percentage point increase in risk-free rate can drop cashflow (and sp) valuations by 20%-40% (obviously adjusting for slightly increased risks premiums and profit growth percentages), banking sector in these bank rate range has some advantage (via NIM) therefore drops are normally lower.
Once central bank rate gets into ..teens range - NPV base cashflow valuation drop is lower but there's worse impact on risk component of discount factor due to defaults/impairments (effect on economy) and slowdown of profit growth element.
The fact it's still not slipping below 41p is rather quite good result..
Nothing new really, all as expected, the question is why is it even currently trading, main quotes:
> Given the level of existing debt that is expected to be released under the Plan, the Proposed Restructuring does not provide for any recovery for holders of Cineworld's existing equity interests.
> Any administration order would not affect the status or rights of any of the Group's employees.
> Cineworld further confirms that the Listing and the Admission to Trading are expected to be cancelled at 8.00 a.m. on the business day following the actual appointment of administrators in respect of Cineworld Group plc.
Obviously apart of obvious bit: inventory buildup (multiples of unsold stock vs 2021 and 2022) and rapidly depleting cash position vs debt accumulation? (e.g. acid test results deterioration because of current assets vs current liabilities balance).
Could this risk factor be the sell-off trigger (page 91 of FY2022 report):
ii. Impairment of exploration and evaluation assets
Judgements made in relation to accounting policies
As disclosed in note 13, the Mokopane license held by the Group requires that mining operations commence prior to the end of January 2021.
As at 31 December 2022 no mining has taken place at the site. Based on the conditions included in the mining right, the Group has the right to apply for an extension to the requirements to commence mining activities and an application has been submitted to the Department of Mineral Resources and Energy (“DMRE”), however a response has not yet been received.
Based on the mining right conditions, including that the Minister has to give written notice regarding a potential suspension or cancellation of the mining right and that the Group has the opportunity to provide reasons to the Minister on why this should not occur and the remedies put in place, the directors are confident that the extension will be forthcoming and the license therefore remains valid. Consequently, the directors have made a judgment that no impairment of the related intangible asset with a carrying amount of US$53.47 million is required.
Re:..Anyone who listened and sold up would have saved a fortune here...
Or those who haven't bought-in like me in mid 2020 in 11-12p range, I was considering back then but some providence and couple of warning flags have pushed me towards other alternative ticker (which btw has yielded quite good return so far). Initially was painful to watch it going up to 20p but now seeing sp at these levels I'm glad that this trap was triggered without me caught inside. Not losing capital is one of a top priorities in investment checklist after all.
So RNS reminds (again) that there's no whatsoever residual value left for shareholders and for some reasons sp is still not 0.000001?