Share Name Share Symbol Market Type Share ISIN Share Description
Anglo-eastern Plantations Plc LSE:AEP London Ordinary Share GB0000365774 ORD 25P
  Price Change % Change Share Price Shares Traded Last Trade
  -6.00 -0.74% 800.00 26,027 16:35:20
Bid Price Offer Price High Price Low Price Open Price
802.00 810.00 816.00 800.00 804.00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Food Producers 320.50 101.37 127.50 5.7 316
Last Trade Time Trade Type Trade Size Trade Price Currency
17:37:23 O 937 805.981 GBX

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Date Time Title Posts
21/6/202216:15Anglo Eastern Plantations--oil my palms?1,768
12/6/200216:39Anglo Eastern Looks Dire18
11/4/200216:02Anglo Eastern Plantations Not so Dire17

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Anglo-eastern Plantations Daily Update: Anglo-eastern Plantations Plc is listed in the Food Producers sector of the London Stock Exchange with ticker AEP. The last closing price for Anglo-eastern Plantations was 806p.
Anglo-eastern Plantations Plc has a 4 week average price of 786p and a 12 week average price of 760p.
The 1 year high share price is 930p while the 1 year low share price is currently 560p.
There are currently 39,490,272 shares in issue and the average daily traded volume is 39,516 shares. The market capitalisation of Anglo-eastern Plantations Plc is £315,922,176.
stemis: Current market cap = $414m. Cash at 31 March was $253m. By end June sb at least $280m. Even assuming only 85% belongs to AEP shareholders, that's $238m, so an EV of $176m. In 1st half of 2021 AEP made earnings of $38m for it's shareholders (= $ 76m annualised). Cash free P/E of 2.3 at worst...
tigerbythetail: I still make AEP an out and out misprice - even factoring in every negative I can think of (derisory dividend, Indonesia unpredictability, 10%-15% local partners in subsidiaries, etc.) $252m in cash in the group (and no debts) against a mcap of $420m (850p share price)! $34m in cash added in the last quarter! I do wish the company would pay a proper dividend and spend some money on proper corporate communication and PR. IMO, the share price would double if they did.
skanjete2: There could also be another, I admit, speculative reason for the low dividend. If they want to pay a dividend to common shareholders, they have to upstream the money from the Indonesian operating subsidiaries. So, about 15% also has to be paid out to minority shareholders. Now, recently, Indonesian law was adapted so that foreign companies can now own 100% of an Indonesian CPO plantation. Formerly, that wasn't possible (hence the minority shareholders). This allowed f.e. that Sipef, a Belgian plantation company, recently bought out the minority shareholders of Agro Muko. Maybe AEP is aiming to do the same with his minority shareholdings. To motivate the minorities to sell, they could consciously minimise the dividend. In that way, the only way for minorities to have a return on their investment, is to sell to the majority shareholder, AEP. For AEP, this would be a great investment.
myopia: Regarding the dividend, for me at any rate, it doesn't really matter if they pay out some of the cash or not. As long as the amount of cash they state they've got is actually there, and the share price keeps on rising to reflect this, if I want to take a 'yield' from the stock then I will just cash in some of the shares. It makes no difference to me as a small shareholder whether it's a capital gain or a divi payment.
stemis: Broadly. The percentage will differ depending on changing profits/net assets of the relevant subsidiaries. I used 85% when calculating how much of the cash and EBITDA 'belongs' to AEP shareholders. [Edit] I think that might understate how much cash belong to AEP shareholders because some of it will be in the holding company (which is 100% ours). If you look in the cashflow statement, there was a $381k payment of dividends to non controlling interests. That's minority interests share of dividends being paid up to AEP from subsidiaries. If that's ~15% of the total then the amount AEP received was ~£2,159k. AEP only paid out $395k to AEP shareholders and I doubt the cost of running the was $1,764k (and presumably there's also management charges levied by AEP otherwise they'd be trapping losses in the holding company) so I'm guessing there is cash building up in the holding company. Shame companies don't seem to publish holding company balance sheets like they used to do...
stemis: It hasn't decreased the real value of the net assets (which are what they are regardless of presentation), only the accounting treatment. I suspect NAV isn't a major driver of value here however. Like other stocks benefitting from high commodity prices (e.g. SLP, SQZ etc.) I believe the share price is actually driven by sentiment wrt the continuation of these prices. Just based on H2 alone, AEP is currently valued at about 1.8 x ebitda. Even allowing for the changes in CPO export tax, prices are currently higher than H2 (although AEP is currently blighted by a temporary export ban). Cash conversion in 2021 was 70-75% of ebitda, so probably two years at this level and the valuation will be covered pretty much entirely by cash. The negatives of course are a dominant shareholder and political risk (changes in CPO export tax, export bans, import bans on palm oil etc.), but can these really resist (in valuation terms) the rapid build up of cash taking place? Just in passing, one of the difficulties in valuation is that there are significant minority interests in AEP. Not all of the cash, and indeed profit, belongs to AEP shareholders. I've tried to amend for that but it's quite broad brush as the interests vary by subsidiary (there's more detail in note 30).
tigerbythetail: For my money the trading update will reveal that AEP is simply mispriced. Market cap is currently around £340m, or $430m. Cash at 30 Sept 2021 was $192m, no debt. This increased $100m over the year from 30 Sept 2020, on the back on palm oil prices that were lower than they have been over the last six months. So (IMO) cash should come in at around $270m in the update. Or, in other words, AEP would have a current EV of $160m, against a roughly equivalent EBITDA. Which is absurd. Yes, fertilisers and fuel costs will be up, the weather may have affected production, palm oil is unfashionable (even as it saves millions of people from hunger!), the Indonesian authorities will be a pain to deal with, the company would do well to announce a clear and much more generous dividend policy, etc. But the medium term CPO price outlook is very favourable. My own price target for this is 1500p.
tigerbythetail: Note how MPE share price hasn't reacted at all. I think news headline triggered automated selling triggered cascade of stop losses = buying opportunity. Ban will send CPO price through the roof and will be rescinded as soon as some heads have been knocked together and the domestic market receives its discounted oil.
stemis: Situations like this are always difficult to value. The inflated price of palm oil won't last forever, so a P/E valuation on current earnings will never seem to be reflected in the share price. However, here is my stab at an alternative. Let's assume that the situation on 31-12-20 was the status quo. Share price ~500p. Up to 31-3-22 I reckon AEP has generated around 300p/share of cash (~£155m). Currently it must be generating at around 30p a share ($15m). So a share price of 920p implies the current excess price will last about 4 months (to end of July). Obviously it wouldn't be quite as linear as that but it's rough and ready. However, according to hxxps:// "In Ukraine, sunflower seeds are sown in April and May and harvesting usually begins in September. Tensions and military action in agricultural areas pose risks to the supply and demand of the next growing cycle. With trading routes being blocked, import-export facilities shut down, and farmers unable to plant, the average yield per hectare of sunflower seed will take a major blow this harvesting season. " [Lack of sunflower oil and Russian production too will maintain pressure on palm oil prices] That could mean high prices until at least September 2023 - another 18 months. On that basis a share price of maybe 1300p would seem reasonable. Still undervalued...
nobull: m_kerr, thanks for that. Yes, the fact AEP is a public company hence its shares can rise in price is a good defence against a claim for unfair prejudice particularly as AEP's dollar market cap. has risen over the last few weeks, probably mostly due to the rise in the cash balance reported in its H1 results (rather than due to changes in $ ex-mill gate price of CPO - if anything the ex-mill gate price has fallen recently due to the rise in September export tax). And I still feel you are right that the share price would be massively higher if the dividend payout ratio were raised to 50% of eps, and in that sense, shareholders are being done down here. Another defence against an unfair prejudice claim might be that they are looking for reasonably priced acquisitions but haven't found any yet. Anyway it is interesting that Simon Thompson of Investors Chronicle thinks AEP are a bargain on a forward PE of 3 or whatever, but I can't see what is going to out the locked-up value here. If I could, yes, okay, they wouldn't be this share price! MPE probably trade at the substantial premium to book value because the DCF valuation, using, I assume, a long term $610 ex-mill gate price and a 16% discount rate, makes their plantations, and their small property development business, worth £10.99 a share (see page 94 of their 2020 AR and also the separate Khong Jaafar estate valuation document they publish on their web site). REA trades at a massive discount to net asset value probably because it is assumed that a massive rescue capital raising will be needed at some point to reduce its horrific level of net debt. Also some of REA's 'assets' aren't exactly the type you can put up for sale, e.g. capitalised interest, but REA has the biggest operating leverage, an advantage, except when there is a backwardation on the palm oil price curve like there is now, so lots of scary times ahead for me! MPE H1 results due out tomorrow, which I am also invested in. AEP is the only one I don't have! Maybe Simon Thompson is right after all, and I am wrong to be in REA ords. We'll see.
Anglo-eastern Plantations share price data is direct from the London Stock Exchange
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