Goldplat Share Discussion Threads

[shill10] 07/4/2022 11:05

agreed, but what is the point of paying a broker if they don't give even vaguely accurate info ?

[dangersimpson2] 07/4/2022 11:01

Lots of good info in that webinar, the key bit for me was:

MB: In the first half results, the company said “the Group's trading expectation for the remainder of the year is currently unchanged” which presumably means trading in line with WH Ireland’s full-year EPS forecast of 1.5p. However, the EPS for H1 was 1.19p. Can you explain what factors mean that the second half EPS is currently expected to be below that of the first half?

WK: “I think the comment has probably been made to indicate that at the point of that announcement the activity in the group probably represented what we have experienced in the first half. I understand the question, but yes, I don’t think there is necessarily at this point of time, that expectation.”

MB: So not necessarily expecting the second half to be significantly below the first half?

WK: “No”


In terms of buyback, I'd be happy for the company to keep renewing it in £200k chunks as long as the price is sub-10p and then either stopping when Martin Ooi reaches 29.9% or applying for a Rule 9 Waiver from the takeover panel.

[shill10] 07/4/2022 10:51

so Werner admits WHI forecast is total baloney - he really should be on the phone to them to issue a bullish update, not sure what we are paying them for...still the main thing is he thinks 2nd half will be similar to 1st hals, which is great news.

[lowtrawler] 06/4/2022 23:41

Of course kimboy but I did define pricing as up to 10p. I really doubt there are many more than 10m shares available for less than 10p. After all, Martin hoovered up his stake taking out the weak holders and so we will be motoring towards 60m shares having been taken out of circulation between 10m buybacks and Martin.

[kimboy2] 06/4/2022 22:38

All the shares are in free float. It is just a question of price.

[lowtrawler] 06/4/2022 21:56

Only about another 400k shares can be purchased under the programme before they hit the £200k. Essentially 1 more day of 350k plus change. Will we see the programme extended?

About £500k more and they will have bought enough for Martin hit the 29.9% limit.

Personally, I'm happy for them to keep buying at prices under 10p so long as they have cash to do it and Martin sells down to stay under the limit. We know GDP is not a very liquid share and so I'm unsure when buybacks will cease being viable. Doing a further £0.5m will have taken 10m shares out of circulation and there can't be that many more in free float. I suspect if they extended buybacks to around £1.5m total, they would struggle to obtain shares at under 10p.

[dangersimpson2] 06/4/2022 16:35

SA has been particularly lumpy recently, not helped by different cycle lengths between circuits and hence revenue recognition. Quarterly operating profit in Ghana has been almost monotonically higher each quarter for the last two years, which is a testament to the real on-the-ground progress the management team have made there. It is rapidly turning from the ugly step-child to the favoured son.

[kimboy2] 06/4/2022 14:10

As GDP did 1.2p eps in the first half and the brokers are forecasting 1.5p for the year I think we know which way the wind is blowing.

In addition ISTR that Werner said he expected the outcome to be similar to the first half when the anomaly was pointed out, I think by DS himself.

The problem is always that each 3 month period can be lumpy, but I am expecting a good result in Q3/22.

[dangersimpson2] 06/4/2022 11:38

Hopefully the overhang is now cleared. WH Ireland struggled to get the 350k buyback shares yesterday and only appeared to have got filled in the auctions. The price is rising today and they are having to pay 7.1p in the auctions today to get the volume (assuming that is the buyback and not a new buyer.)

Unlikley to see any really big moves unless there is newsflow, though. We should get Q3 operational update around the end of this month. And if Q3 operating profit is similar to Q2 then the WH Ireland 1.5p EPS forecast will look increasingly untenable. Which means that around this time we should either get a significantly ahead statement or WH Ireland will need to update their forecasts and target price.

Q4 operational update will be three months later and then Final Results. A lot of work has gone on behind the scenes in the last couple of years into changing corporate structure, selling off Kilimapesa and buying out some of the BEE stake. This has made the accounting particularly complex and has made for some rather late reporting. With all this in the rearview mirror, I would hope for a return to a more timely reporting schedule. Which would mean prelims available to the end of September, hopefully these will show most of the Nedbank loan repaid and a small Final Dividend declared.

So this could well be the year that all of the hard work over the last few years starts to be visible in the resultls and appreciated by the market.

[camerongd53] 05/4/2022 12:49

LT
As you suggest, I think a bit of explanation is required by he company.
I would suggest that when you can expect an invoice to be paid in accordance with payment terms, it is only then a trade debtor. This is different from goods leaving the premises being classified as a trade debtor, and in gdp's case made possibly be subject to further proessing. A category of stock or debtors known as Precious metal at refiners might be easier for users to undestand and appreciate.
Unless someone has something to add to this debate, we should close this topic

[lowtrawler] 04/4/2022 22:11

camerongd53, my understanding is the same as ds2. It would not be WIP as we recognise the sale at the point it leaves to the refinery, it is just they have a you get paid when we get paid deal with the refineries. The GDP balance sheet is difficult to navigate because of the extensive "you get paid when we get paid" agreements. We can take material in from suppliers and not process it for over a year with several more months to get paid by the refineries. However, the balance sheet movements are largely non-cash. I do believe GDP could do a better job of explaining the movements by splitting out debtors, creditors and inventory into linked settlement arrangements.

[kimboy2] 04/4/2022 16:58

Didn't Werner mention this in the recent presentation. ISTR he said some could take 6 months.

Not sure if there is a replay anywhere.

[camerongd53] 04/4/2022 14:51

ds2
If you are right it could explain a lot
My view of what you describe is that it should be classified as Work in Progress. Normally Trade debtors are goods that have left the company's premises and do not require any further processing and are maybe subject to delivery and if so should be paid on the agreed terms

[dangersimpson2] 04/4/2022 14:27

It's the refinery pipeline, so how long it takes to ship gold to the refineries (they have plural to prevent the issues they had with Rand Refinery a few years ago) and then the refineries to process it and pay them.

Trade payables tends to go up with trade receivables though, since their long-term supply agreements tend to be based on "you get paid when we get paid".

[michaelfenton] 04/4/2022 14:22

camerongd53 - I myself am a bit shocked by the trade debtors balloon? Strikes me that this is yet another example of slack management? Goldplat is slow moving apart from paying it's staff etc and wasteful. I was hoping that arrival of Moii would improve things and why is the share price loitering below 7p? Although that helps the buy back.

[camerongd53] 04/4/2022 13:43

Kimboy
Noted - Accept that there are probably very good reasons in investing in raw materials.
can't get my head round why they are letting extent of trade debtors balloon. I would have thought that selling precious metals would be immediate settlement and not up to as much as4 months. I suspect that if all our debtors paid immediately, we would not need to borrow against our sales invoices and be able to pay our accruals creditors quicker for better terms and even be able to pay a dividend.

[dangersimpson2] 04/4/2022 12:41

I'm hoping the buyback will be extended. £200k isn't a huge sum and perhaps the company were a little cautious about what impact it would have. They have given irrevocable instructions to the broker, and if they said a £1m program then the broker could end up buying back shares at a significantly higher price than today which may have not been ideal. Also, the company would be committed to that spend and have to transfer the cash to the parent company and maybe pay 5% dividend tax if the cash came from SA. And the cash would not be available if big stockpiles of material or similar positive developments became available.

So there are lots of reasons not to agree a large buyback in advance. However, a renewed £200k buyback every time there isn't a better use for the cash and the price remains at current levels could be significantly earnings enhancing.

EPS is calculated using weighted average shares in issue so even if they bought back the full 10% of shares allowed this year then this isn't going to have a huge impact. However, if the operational momentum continues along with the buyback then this could push 2023 EPS from 3p to more like 4p which would start to have a material impact on the upside valuation.

[kimboy2] 04/4/2022 11:29

There was a big blob that went out shortly after the interim's date;



Our cash balances remained strong at £1,452,000 at the end of Q2, with a significant balance invested in inventory and debtors at the end of the period. At the date of this announcement, the cash balance in the operating entities was £3,850,000.

[camerongd53] 04/4/2022 11:10

spent part of yesterday scrutinising the interim accounts. Overall I would say that demonstrate good progress and profitability.
However the situation regarding working capital is not as good as I would like. Net current assets as defined as Current assets less Current liabilities is approx £9m and hasn't moved much for over a year. Stocks are at a level they were approx a year ago at £9m.
Trade debtors have increased significantly over the past year to £16.5m compared with £13m and £6.5m at period dends. The company has borrowed nearly £8m against invoices so running down debtors does not really help cash at bank. Trade debtors appear to represent over 4 months turnover which appears high to me. Trade creditors have been run fown to minimal levels but accrued liabilities has risen to over £9m.
Looking at the Cashflow statement, I would expect thsat there will be little significant ouflow of cash for fixed assets etc. but there will be outflow for share buybacks.
The company appears to have difficulty converting profits into cash in bank.

Given the amount of current liabilities, reducing the current liabilities is a greater priority than paying large dividends. Unfortunately I feel that dividends of 0.5 pence per share are unlikely for a couple of years.
I suspect what spare cash there is will be used for more buybacks and done in small amounts.

[shill10] 03/4/2022 15:40

exactly, that's the plan

[lowtrawler] 01/4/2022 17:25

Think of it as good news for the moment. GDP are buying back shares and so the lower the price, the less it costs remaining shareholders. We should all be hoping for the price to remain low while they complete the buyback programme.

Once the buybacks complete, hopefully GDP can start to release positive news e.g. TSF plans; improved trading etc. and commence dividends. If done well, a rapid 50% uplift should follow.

[shill10] 01/4/2022 14:26

Agreed, Dangers, although their offers are still in auctions so far today

[dangersimpson2] 01/4/2022 11:38

Someone was selling in 500k chunks from 15th March to 29th March. The thing is no one has a lot apart from Martin Ooi & GKG and both of those would have to declare any sale as directors, not just passing a threshold.

Could be someone with less than the 5m share stake that represents the 3% notifiable stake. Not sure why you'd take a big(ish) stake in an illiquid share and then sell just as the company report decent H1 results and indicate that H2 performance is going to be similar. Perhaps a forced seller following recent market weakness?

Anyway, they can't have many left given that the total sell volume over the last couple of weeks has topped 9m shares.

[shill10] 01/4/2022 11:09

any idea who this big seller is ? by my reckoning he's sold several million shares over the last month or so.