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CAPD Capital Limited

0.60 (0.75%)
Last Updated: 13:26:29
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Capital Limited LSE:CAPD London Ordinary Share BMG022411000 COMM SHS USD0.0001 (DI)
  Price Change % Change Share Price Shares Traded Last Trade
  0.60 0.75% 80.40 119,161 13:26:29
Bid Price Offer Price High Price Low Price Open Price
80.60 81.40 81.80 80.00 80.40
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Oil And Gas Field Expl Svcs USD 290.28M USD 20.99M USD 0.1084 7.42 155.73M
Last Trade Time Trade Type Trade Size Trade Price Currency
13:26:08 O 10,000 80.85 GBX

Capital (CAPD) Latest News

Capital (CAPD) Discussions and Chat

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Date Time Title Posts
04/12/202311:31CAPITAL DRILLING : global minerals industry services provider2,966
21/5/202008:16Capital Drilling -For Mineral & Mining Exploration1,593
14/11/201308:29*** Capital Drilling ***40

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Capital (CAPD) Most Recent Trades

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Capital (CAPD) Top Chat Posts

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Posted at 04/12/2023 08:20 by Capital Daily Update
Capital Limited is listed in the Oil And Gas Field Expl Svcs sector of the London Stock Exchange with ticker CAPD. The last closing price for Capital was 79.80p.
Capital currently has 193,696,920 shares in issue. The market capitalisation of Capital is £155,732,324.
Capital has a price to earnings ratio (PE ratio) of 7.42.
This morning CAPD shares opened at 80.40p
Posted at 19/10/2023 20:26 by adamb1978
Hi Danger

Buying shares now is indeed the time, but they should have a plan in place such that when the capex for the major contracts is done, then they jump on it then if the share price is still languishing...and if the share prices isn't, well then we're happy enough anyway.

In terms of cost of capital, given the Africa exposure an investor should rationally want a premium to calculated WACC. You can relate that to the investment portfolio too - whilst hte IRR from it looks good at face value, for investments in junior mining companies you'd want a high IRR.

I think they need to be running this business a lot more aggressively/lean. Look to operate it at zero net debt (given people will always view it as cyclical) and plan to get there over 3-5 years from current levels rather than doing anything drastic. Institute a share buyback asap and find ways of liquidating the investment portfolio when the opportunity arises (eg sell listed shares) and plough that into a buyback too. Plus set a higher threshold for organic investments. Unfortunately, I think the current board/management is to cozy a group and the governance not strong enough to bring this about.

Posted at 18/10/2023 08:28 by rivaldo
Tamesis have retained their 160p target price and forecast of 18.5c EPS this year, giving rise to a P/E of just 5.1.

This despite Q3 being slightly behind forecasts due primarily to the Perseus Mail drilling project hiatus and Q3 weather seasonality. Tamesis expect a strong Q4 due to the ramp up of the drilling contracts at Ivindo and Reko Diq.

With Mining Sevices and MSALabs now comprising over 30% of revenues CAPD are "no longer just a drilling business".

In summary (extracts):

"Capital are clearly on track for another record year (4th consecutive year of revenue growth), and are well placed to continue with an active tendering pipeline, growing geographic footprint (having recently entered into America with their Nevada Gold mining contract – see note) and first-in class services."

"Capital’s holding in Allied Gold was worth ~$10 million as at 30th September 2023, at Allied Gold’s share price of C$4.74. The company’s investment portfolio stands at $47.8m valuation vs $42,1m as at 30 June 2023."

"The shares are trading on EV/EBITDA multiples of 2.2x and 2.4x 2023 and 2024 respectively, PE ratios of 5.1x and 7.0x and a dividend yield of 4.1%."
Posted at 20/9/2023 07:32 by adamb1978
Very good client for them to have, and nice pop in the share price

Some very rough numbers - assume 50% of the run-rate revenues in 2024, 100% in 2025 and 2026 and then 50% in 2027 plus assume 45% gross margins and 25% tax, then this is worth about 3.5p on the share price. It doesnt factor in using the kit for anything beyond 2027, though thats probably prudent given its unknown
Posted at 24/8/2023 06:49 by rivaldo
CAPD took part in Wia Gold's recent A$11m fundraising at A$0.032 (a 20% discount ot the share price at the time), summarised here:

Per their disclosure CAPD now own 19.9% of Wia, or 183,216,279 shares - these are now worth around £3.4m at the current A$0.037 price, so CAPD have made a decent profit already on their purchase of around 123m shares:
Posted at 21/8/2023 15:41 by adamb1978
Thanks DangerSimpson. I guess that#s most of the H1 cash outflow for new investments.

Think its completely unnecessary - PDI are a A$400m mkt cap'd like to think that CAPD would win the business without this additional stake. Poor capital allocation decisions and weak governance as I've said before.

Would be nice if as interest rates peak/reduce, we see some consolidation amongst CAPD's customer base such that some of these positions get cashed out. The PF is 25% of market cap but as you say, I dont think any of it gets priced into the share price. Arguably the portfolio is actually negative value given it confuses the equity story
Posted at 16/8/2023 08:26 by adamb1978
Rightly or wrongly, the market isnt giving them value for P&L performance, and zero for the investment portfolio.

I think they need to take a similar approach to CNIC in order to get the share price moving, namely focus on cash. They set out a very clear plan for usage of cash and the share price has woken up. Its as much about messaging as it is about action.

Post this capex glut for the recent contract, they need to be talking about FCF yield and share buybacks and the messaging needs to be more focussed on cash and shareholder returns. I thikn the divi is fine - I'm not sure they'd get more investors increasing it substantially beyond a 3.5%-4% yield, so an annual 5%-10% increase or similar is fine. However the company is trading below NAV - they need to be filling their boots with a share buy back!!!
Posted at 16/8/2023 08:18 by rivaldo
Tamesis have retained their 160p target price and note the current year P/E of 5.6.

They state that H1 results were "bang in line" at EBIT level and above, with EBITDA margins and net profit slightly down due to "the high growth in the MSALABS business where costs are front end loaded" and "as the business incurred a higher non-cash finance charge from its leasing arrangements".

Here's the strong outlook and a couple of interesting extracts:

"We retain our target price noting further ongoing consolidation in the sector with the Perenti offer for DDH1 in Australia. As in the mining industry, consolidation clearly bodes well for the services business. We also believe that the increase in size and diversification of Capital’s business begets growth in a virtuous cycle that is hard to break (assuming quality is delivered). It basically allows Capital
to leverage a greater offering of products into a larger clients base both by size and geography. This thematic has much further to run."

"MSALABS relationship with Chrysos continues to deliver. MSALABS now has the largest international network of the highly successful and popular Chrysos PhotonAssay technology which continues to grow. The company is guiding to 21
PhotonAssay units by 2025 vs six by YE 2022. Each Chrysos unit is expected to generate annual revenues of US$3-5 million so we are looking at c$80m+ of revenue from MSALABS vs just $3m in 2019. This revenue growth has come at minimal capital
outlay. As such we would argue this side of the business has similar characteristics to a typical tech company which implies double digit EBITDA multiples."

"Positive outlook. We have gone through the drivers of growth into H2 2023 and beyond and the company’s revenue guidance of $320-$340m reflects this positive outlook. Management also notes “tendering activity remains robust across the Group with a number of opportunities progressing”

Investment Case

As has been the case for nearly every announcement in the last three years these results are strong and point to further strength and growth. The company will have increased revenue by 2.4x from 2020 this year yet the share price is 13% higher than it was in Augst 2020. With activity in the mining sector still strong and long-term contracts locked in, we see safety in the medium term revenues and margins. Meanwhile the shares are trading on PE and EV/EBITDA multiples of 5.6x and 2.6x and a dividend yield of 3.6%. This implies next to no growth in the business yet all three components continue to deliver."

"On a comparative basis – see Fig 3 below – the company trades at a discount to its peer group albeit we would note the whole sector has derated. We would also point out that the table understandably suggests a bigger and more diversified business carries a higher multiple. We expect this will evolve with the Capital share price and/or we may see further consolidation."
Posted at 27/7/2023 09:04 by adamb1978
I dont think anything is priced in looking at the share price!!

More seriously, I certainly dont think anything relating to the investment portfolio is priced in. Historically movements in the portfolio dont seem to have impacted the share price (though obviously not possible to tell) though its something like 16p per share.

Hence why I'd like to see them gradually monetising the portfolio, which in theory should be consistent with them increasingly working with larger clients who wouldnt need them to take a stake in their business.

Also another reason why I dont like their recent 'Capital Investments' segment. The market doesnt give them credit for it so it feels to me like a vanity project
Posted at 13/6/2023 08:06 by hpcg
allstar - they are not in control of the timing for the Allied IPO. They are in control of how they sell it down. They should absolutely not be telling the market what they intend to do, just as none of us here would. IMO people speculating about what others think of portfolio is just finding reasons for observed behaviour and not from the horses mouth. I think there was one fund that did object, or complain it was too complicated so they sold out. The turnover of stock must leave it in the hands of investors who are happy about it. Anyone can do a sum of parts and rank the portfolio at zero if they wish.

In my opinion a lot of investors or potential investors are driven by the price of gold. Overlay a chart of the price of gold in dollars and one can see that rallies to highs in 2022 and at the start of this year follow rallies in gold. Gold is consolidating, CAPD share price is consolidating. I actually think there are investors who think we are a gold miner. This in turn because oil companies are routinely called oil drillers despite them having handed the task of drilling off to service companies decades ago (some oil cos do again own drill rigs, mainly onshore and or in unique environments).

One of the benefits of the Fortescue deal is that it will become apparent that we provide services across metals. If investors did their own due diligence they would see that neither the top nor bottom line of CAPD is correlated with the price of gold.
Posted at 12/6/2023 08:25 by rivaldo
Good to see the share price break upwards over 100p and at new recent highs.

Tamesis have retained their 160p share price target.

They've added $7.5m additional revenues into their forecasts this year, which are now just in the upper range of $320m-$340m revenue guidance at $331m, so still relatively conservative.

They forecast 20.3c EPS this year, i.e 16.2p EPS.

They also see 39.4c operating cash flow per share this year.

They note:

"World Class Project and Operator. The Ivindo Project is one of the world’s largest undeveloped high grade hematite projects. FMG has an 80% interest in the Ivindo Iron JV and has been assessing the project since 2018. FMG note that the geology and iron ore potential is similar in scale as Simandou in its early stages of exploration, with its multi-billion tonne potential and high grades. This is great news for Capital who have effectively been asked by FMG to sort out the drilling, earth moving and crushing. This puts Capital in a key operational position which, in our view, will only become more valuable if Ivindo gets even bigger".

They summarise:

"Financial impact in 2024 and beyond. Our forecasts for 2024 do change clearly. Capital note in their press release that revenues of approximately $30m pa will be generated from the mining service contract once it is fully operational. We estimate at full run rate this could add c. $13.5m pa in gross profits – a material addition over five years given the relatively light $15m of capex required. We model revenues from the new contract starting in H2, ramping up in 2024 and being at full operational capacity in 2025."

The Investment Case

Today’s announcement is another demonstration of the ability for management to secure major contracts and a further diversification of the Company’s revenue stream being a mining services contract on an iron-ore project. At the current price the shares are trading on EV/EBITDA multiples of 2.5x and 2.6x 2023 and 2024, PE ratios of 5.7x and 6.9x. This continues to implies little growth in the business yet these sort of contract wins plus the trajectory of MSALABS with Chrysos (c. $80m+ of revenue by 2025 vs just $3m in 2019) show that the reality of the investment case is completely the opposite. We maintain our price target of 160p."
Capital share price data is direct from the London Stock Exchange

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