Capital Share Discussion Threads

[masurenguy] 23/12/2020 15:03

"Au contraire, the dilution from the placing would ordinarily have reduced the target price, so this could be said to be an upgrade"

Quite agree Riv.

[rivaldo] 23/12/2020 14:21

Au contraire, the dilution from the placing would ordinarily have reduced the target price, so this could be said to be an upgrade given the initial expenditure necessary to fund the big Sukari expansion.

I'd be happy to see the share price at 103p given the hiatus caused by CB's selling, and I suspect from the tone of their narrative that Berenberg foresee further upgrades as time goes on.

In addition, the Q4 trading update is out in mid-January - Berenberg may well adjust their forecasts upwards following that given all we know about how well trading is going.

[yasx] 23/12/2020 14:14

Well, if the news is "transformational" it is not a particularly compelling argument from the Co. broker if the target remains the same.

[rivaldo] 23/12/2020 13:56

Berenberg have today reiterated their Buy and 103p target for CAPD per this from the news wires, and have raised forecasts as follows:

"Berenberg reinstated coverage of drilling services firm Capital, believing its recent contract for Sukari gold mine to be "transformational".

The bank kept its Buy rating and 103 pence price target. Capital shares were down 0.8% at 59.01p in London on Wednesday, down 10% in the year-to-date.

At the start of December, FTSE 250-listed gold miner Centamin said it had awarded an contract for waste stripping in the open pit at the Sukari gold mine in Egypt to Capital.

Mauritius-based Capital said the new open pit waste mining services contract, together with the extension and expansion of an existing drilling contract at Sukari, will bring USD235 million to USD260 million in incremental revenue over the four years starting January 1.

Berenberg said the contract offers the firm its first step into a USD1 billion-per-year contract mining business in Africa, not only providing a material revenue boost but also a springboard for growth with new contract wins.

The contract mining business diversifies revenue from drilling to other mine services and offers scope for a multiple re-rate in line with full-service contractor peers, the German bank believes.

After raising USD40 million, Berenberg thinks Capital has more than enough financial firepower to fund its Sukari commitments, and this should offer flexibility to tender for new contracts. This would add further top-line, earnings and free cash flow growth.

The broker lifted its sales estimate for 2021 to USD189 million from USD149 million previously, and for 2022 lifted its forecast to GBP226 million from USD149 million. Berenberg's earnings before interest and tax forecast for 2021 was bumped up to GBP29 million from GBP25 million, and for 2022 to GBP36 million from GBP25 million.

"We think 2021 will be a transformational year for Capital and believe there is meaningful share price upside; we remain Buy-rated," said Berenberg."

[rivaldo] 23/12/2020 08:49

Good news this morning from CAPD's client HUM, where the company has (1) extended its drilling campaign at Yanfolila, and (2) is "finalising our 2021 exploration and drilling strategy not only for Yanfolila but at our new Guinea gold project, Kouroussa".

Both of these projects utilise CAPD:

[masurenguy] 23/12/2020 07:12

Dilution of director shareholdings, following the recent placing, reported today.

[mr doughnut1] 22/12/2020 14:36

Had another little nibble this afternoon.Last years Q4 TU was on the 16th of Jan, so not long to wait.The battle royal between CB, selling into any good news, and JB releasing it seems to be at an end - hopefully!

[adamb1978] 22/12/2020 11:30

Yes, nice to see - gets more publicity as a separate RNS rather than wrapped up in the placing announcement

[rivaldo] 22/12/2020 11:11

Today's RNS confirms that the directors bought almost £930,000 of shares in the placing - a pretty strong commitment:

[yasx] 18/12/2020 08:46

Not that much stock around this morning...certainly not at this level.

[frazboy] 18/12/2020 08:42

Can't even get 2k without being quoted 'at best'.

[shanklin] 17/12/2020 17:01

At HL when the B/O was 59/60 this afternoon, could sell lots but only buy 15k.

[gleach23] 17/12/2020 16:27

Been over 500k available to buy online since the placing. Now just 1500. Hopefully that bodes well for an imminent rise.

[bo doodak] 16/12/2020 11:40

Been following this company for many months, seems a decent level to buy in, and with recent news. Hopefully that's not the kiss of death for you guys.

[shanklin] 15/12/2020 17:57

I would also be very interested in an interview with CB so he could explain his unrelenting selling to all of us. :-)

[qs99] 15/12/2020 17:24

thanks all

[mr doughnut1] 15/12/2020 17:20

For anyone whose interested there is an interview with JB on the Captial website.

[shanklin] 15/12/2020 15:08

Incredibly low target price given the vale of CAPD’s share holdings and prospects, but better than we are currently.

[rivaldo] 15/12/2020 14:48

Mark Watson-Williams on Master Investor updated a few days ago, with a 100p target price:

"Capital (LON:CAPD) – time to get back into this mining services group

Today I am suggesting that investors who like to play the mining sector should have a good look at Capital.

It is now very much a growing mining services group having evolved from its base of supplying and operating drilling rigs, particularly in Africa.

This week the group has just announced a mega $60m-a-year contract, set for the next four years. It is with Centamin and covers an earth-moving contract as part of its client’s open pit revamp at their Sukari Mine in Egypt, one of the largest gold mines in Africa.

This is the second load and haul contract for the group and is a significant deal for Capital which could well presage other such contract wins in due course.

But to help finance the group’s development balance sheet it is looking to raise £22m by way of a placing of 38.5m new shares at 58p each.

The new contract, described as transformative, starts next month and cements further the good working relationship that it already had with Centamin.

Capital is currently active in several earthmoving tender processes with new and existing customers as it continues to evolve into a full-service mining contractor.

Brokers Peel Hunt rate the shares as a ‘buy’ with a price objective of 90p. Their analyst estimates that the current year to the end of this month will see revenues rise from $115m to $136m, with adjusted pre-tax profits almost doubling to $27.8m, worth 9c per share in earnings.

For the next two years the brokers go for sales of $165m then $175m for 2021 and 2022 respectively, with profits of $19m then $21m and earnings of 9.7c then 10.8c per share.

Obviously, the shares, now 63.5p, could well slip back to around the placing price level, which gives investors a very good opportunity to jump aboard before others realise just how the group is expanding."

(Profile 03.08.20 @ 77.5p set a Target Price of 100p)"

[someuwin] 14/12/2020 08:29

Buying in here. Always good to get in just after a placing.

[yasrub] 11/12/2020 16:16

Looking hopeful on seller, small tick up

[rivaldo] 11/12/2020 12:10

Another 384,000 traded so far today, including a 250k sell at 60.12p. Craig Burton must surely be out or very nearly out by now.

[earwacks] 10/12/2020 16:46

yeas. Sure there are risks. War . Meteor strike . Collapse of gold price another disaster at CEY, which incidentally had no effect on CAPD's work last time. In all likelihood a buyer will have been found for anymore of Burtons's shares if he still has any. i.e off book. Last year they held a placing for his shares which seems strange way of doing it. So all the proceeds went to Bulmer. Very often the companies will find someone to trade an unusually substantial shareholding so as not to effect the open market price. There is always a certain amount of time to bed in the extra placing shares. The immediate effect after all is to devalue the company however promising the reason for the placing, plus you've now relieved a lot of investor dosh in one swoop. If its a takeover and there is immediate revenue enhancement the recovery will be immediate. Not sure what the latest deal is exactly but usually they have a financial stake in any gold they mine, which in itself presents another risk.

[masurenguy] 10/12/2020 15:40

Good points ds2 !