After a good results update, a very solid production update and the prices they're getting are now seemingly sustainably decent to good.
I've been very patient with this - who hasn't.. it has been a 'journey' :-) - and I have pretty high hopes for this over the next 15 months.. breaking 350p would be a good start but a start only in my mind....I'm looking for 500p here in the coming 3 to 6 momths.. Here's hoping (but tricky as ever and DYOR of course)
Interesting the first reduction and threshold crossed by the world fund was on 12 June. They clearly have been trying to offload shares since then but are unwilling to sell under £2.40 and been selling in small chunks. They are only required to announce when they cross a threshold hence only 3 announcements the 9, 8 and 7% barriers crossed. I wondered why the shares have traded in this band for the last 3 months, my question has been answered! Once the exercise by world fund to reduce exposure has been completed it will be interesting to see how the share price responds.
We probably did, anytime between 29th and about 10 days ago when volumes spiked. The threshold was crossed on 29th but that does not mean they sold all the shares on that day....they could have have left themselves 10 shares above the threshold for all we know, then sold the last little bit on 29th.
I would describe results as good more than very good ... ebitda was 5 to 10m less than I was hoping for ..
the fact they have good prices already contracted for half 2 is encouraging though..
Obviously spot ilmentite price will ongoingly have a meaningful impact on s/p too..
I had previously hoped that this would test 500p in 2017.. I see little chance of that now.. and think 350-400p would be a good to very good outcome by end 2017.. and a decent outcome would be north of 300p .. and average outcome north of 275p... and poor around 250p and bad around 225p....
Scratch that, EIB have 8 million shares if website is up to date, so a way to go. Could also be Capital as they seem keen to reduce their holding back down to pre fundraising level. Either way good to reduce overhang.
I agree there is good turnaround potential with solid EBITDA numbers. I have been surprised that for the last 3 months the stock has traded within the £2.40 to £2.70 range. More stable than I can remember for years, there seems to be a floor where people are unwilling to sell below.
To me I think the refinancing has left people with more exposure than they would like and people are slowly de-risking happy to have made 5-10% in a year. Until more people buy into the recovery story I think until we are in this trading range for a while (or until those wanting to reduce their positions start to fade away). FY numbers may be the catalyst unless there is a positive or negative news story first!
....are positive too, massive turnaround potential etc. This might be a slow burn until the news gets out. Judging by this board, I think a lot of us have given up all hope and I am talking to myself. Will take a long while for momentum to build but I think still good value provided that product prices remain firm as forecasted.
My only caveat on by estimated price for ilmenite of USD175 for H2 is that KMR refer to "further price increases for contracted volumes in H2 2017, in comparison to H1 2017" but when it comes to zircon they have "successfully implemented further significant price increases for H2 2017". Not sure whether the word "significant" has any meaning, or does it imply that ilmenite has increased less dramatically than zircon. USD155 to USD175 represents a 13% increase - would that deserve to be called significant? As always, just a guessing game but KMR gives precious little else to do at times!
H1 results OK but not a "bonanza". Nonetheless, the first signs of life.
They seem to have a good handle on production volumes which really ought to be top end of guidance for FY, and therefore operating costs should be below USD130 per tonne by year end barring unexpected costs.
At least they gave us some indication re product prices received in H1 though still a complete guessing game on H2 for ilmenite and zircon, but we know both increased. I think Iluka increased zircon reference price by about 12% in July but who knows if this applies to KMR when they say increase in line with market. As ever, much now depends on achieved price for ilmenite in H2 and for now I am guessing about USD175 per tonne. Note that the USD155 for H1 was average for Q1 and Q2, and we know Q2 was higher as KMR confirmed this in their update (but by how much and was price trajectory maintained - spot prices increased significantly but was this % change captured in contract prices?).
I think we remain on track for EBITDA of USD70-80 million, profit perhaps USD30-40 million and EPS of 0.2 to 0.3 pence. This is in line and perhaps slightly higher than consensus forecast of EPS 0.22 for FY2017....optimistic possibly. FY 2018 looks more promising still, approx EPS 0.5 by my amateur calcs, but as ever with KMR but this is jam tomorrow.
Even though this is KMR, I do believe financials will be good this time.. they really should be .. it is/has been kinda set up for them.. surely this is their time to start to shine again... Please...pretty please.
Long time since you posted, and I can quite understand why. Paint drying and long term hold spring to mind.
I would be interested in your thoughts currently on Marstons, which I held some time ago, and turned a worthwhile profit.Simply my thinking is that they may be worth another look, in the hope that the dividend is maintained ?
I hope you are well and the cellar is well stocked ?
and the steer on pricing is good - although not excellent given current ilmenite spot weakness, which may or may not be temporary - too, so I remain bullish here
I'd be very surprised if the revenue update in approx. 6 weeks time is not a good one and share price accretive ( that said I expect/hope for some decent share price upticking between now and then in anticipation and the more of that the less on any actual good news.. etc.)
I was going to put a strong buy here but Kenmare is a tricky share not least because the management team have left room for - good - reputation building
The Capital Group Companies, Inc.
City and country of registered office (if applicable):
Los Angeles, California 90071 U.S.A.
4. Full name of shareholder(s) (if different from 3.)v:
See Box 10
5. Date on which the threshold was crossed or reachedvi:
08 June 2017
6. Date on which issuer notified:
09 June 2017
7. Threshold(s) that is/are crossed or reached: Below 9% - Aggregate of voting rights from shares
8. Total positions of person(s) subject to the notification obligation:
% of voting rights attached to shares (total of 9.A)
% of voting rights through financial instruments
(total of 9.B.1 + 9.B.2)
Total of both in % (9.A + 9.B)
Total number of voting rights of issuervii
Resulting situation on the date on which threshold was crossed or reached
Position of previous notification (if applicable)
Off course big questions as to what time frame is needed for construction and from where it will source ilmenite &/or rutile. If using imported raw matierals, transport cost could be quite high, while a 400 million yuan fixed asset cost might be an underestime. GLA
If profits are going to exceed guidance then Kenmare would be obliged to tell the market this at some point ahead of August financials update? ( With the continued uptrend in Ilmenite price and with strong volumes of product shipped this should be the case, even if they're not selling lots into the spot market because of commitments to/relationships with existing 1 year plus contract customers they may not be, they will still be achieving very good prices.. i.e. better than they likely expected ?
I finally went back over the entire 2016 annual report (OK I will probably need to repeat a few more times to be sure that I missed nothing). On page 106(of the PDF) the EIB is listed with 7,839,031 shares (7.2% of capital) as of March 28, 2017. That is identical with their RNS of last July, except that then they disclosed a holding of 7.15% (rounding). Conclusion, they still represent a substantion overhang and equally large contribution to the free float. However, they presumably feel that the real sp value is higher! GLA
I e-mailed KMR IR suggesting that now the material deleveraging, etc, is out of the way and prices are heading up a bit, that it would be appropriate to include net cash/debt in Moma quarterly updates, together with estimated US$ revenue figures. Answer form them: "very few companies do that, not meaningful, commercially sensitive, bla, bla!"
We will see what we will see in August. Meanwhile, no company is going to install the equipment needed to get into production in less than 2 years, normally longer, so reap and bank hay while the sun shines. GLA
Major shareholders update will be interesting but the one we're all waiting for is the revenue update.
As ever they are a lot quicker to give production updates than they are revenue. Has anybody got any ideas/guesstimates on when we'll get a revenue update?
(Last year is not a good comparison as the drawn out execution of capital restructure meant they - thankfully - sat on revenue updates for a long time)
I currently see this as a compelling opportunity at these s/p levels and am tempted to top up. But I have a significant - for me - holding here already and, towards balance, I'm trying to think of scenario(s) that would have negative outcome(s). T
The main scenario I currently think of is meaningful new supply coming into the market in shortish order and that not just stopping further price appreciation but causing some declines in the not too distant future:
From their last update the following concerned me a little :
''Ilmenite prices have increased strongly in the past 12 months and are expected to incentivise the restart of some supply to meet additional demand, which may lead to a moderation of future price increases as the market reaches greater equilibrium.''
As KMR management have always been pints - of Guinness- half full - and more again - merchants I wonder if they are being too positive in these comments.. And the longer they wait to share revenue good news the shorter the window before more supply comes back on and Ilmenite price reacts negatively accordingly?
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