bloomberg2,
he says "but at this valuation and with the positive update under its belt this week ..." [about 50m 30s into the podcast]
ie he's referring to the update that we've just had, which was this on Thursday:
JakNife |
https://podcasts.apple.com/gb/podcast/small-caps-podcast-with-paul-scott/id1642339156Paul adds GMS saying trading update this week ? |
The book is finally starting to look encouraging after a good news release and an up day. The bid has some depth and the offer is only loaded above 17 and with 18 showing. No one is knocking out that 16.7 bid, even if there have been a couple of trades at that price today. It has essentially carried on at the same price as it closed yesterday.
Of course there is potentially a ton of overhead supply for those that bought earlier in the year, but the fundamentals are way ahead of expectations even then. With a 40p ish fair value end 2025 anyone that bought at 25p is still looking at a fantastic return despite the roller coaster. |
1,069,946,316 shares in issue, 53.4m warrants outstanding at 5.75p, equivalent to 83m shares (x1.55 per warrant) = 7% dilution |
And only another 35m to go before distribution is completed. At these vols that could be as little as 2/3 trading days (even assuming that ALL the still to be distributed shares are sold- which we know is unlikely). Overhang clearing, slowly but surely. |
And that’s as of 2 days ago. |
Seafox 14.2% -> 12.9% |
Good to see it rising in this falling market today |
Are the sellers from UAE? so selling in am rising pm? |
Over 100m shares have changed hands over the last two weeks. We're a lot closer to the end than we were! GLA |
The warrants will not be a consideration much longer as they expire on the refinancing or June 2025 whichever is earlier. The former will be much earlier. Your point is of course valid in general, and I have made the same. |
Excellent points - exactly what we've been doing recently post management meetings - buying off the Seafox sellers!
The only, admittedly quite minor, thing to consider in terms of div vs buybacks is that buybacks (being accretive to all shares) benefit the warrant holders as well, by definition, WHEREAS dividends are NOT paid to warrant holders (whilst they remain warrants and haven't been converted). I don't expect this to be a major factor, but just another thing for company to consider when they get into a position next year to allocate excess capital.
Frankly, the fact we are talking about all of these as realistic options is incredible, and a pretty big testament to the team at GMS! Been a ride from the placing at 3p.... |
The market has to first buy out the overhang. As investors we can't do anything about forced sellers, those that need cash now and those that simply want to exit the position whatever the price for their own reasons. We can do what investors are supposed to do which is to pick up cheap growing companies at less than fair value and wait. Fortunately the London market has finally discovered buy-backs, not just companies but institutions expressing that preference to companies. Companies are bringing down share counts, enhancing NAV and not wasting capital on diminishing returns from excess capital investment. We do not have to wait long for the company to be in the position to self-help. Buybacks during the summer doldrums would likely be both price supportive and have a decent IRR, depending on P/NAV at the time. |
There will be parties who have knowledge of the mechanics of the in specie dividend and even the intentions (hold/sell) of those receiving.
We might have to wait for such (price sensitive?) information leaking out - made real by sustained/substantial buying in the market. |
Surely there has to come a point that the market can see through the overhang/sells etc and start rewarding thus company for all the positive news/ announcements its been continuously making.
How can a supposedly unbiased forward looking mechanism be trusted here ? |
Volsung - it's good to read that. I had assumed there would be money waiting on the sidelines for an uptrend to emerge. I've been in that position many times myself. |
That's consistent with my conversations with Alex and Mansour. That's also the level they begin to think about divs, buybacks in a more meaningful way and potentially capex |
The company is 1-2 years ahead in degearing and EBITDA from what those of us discussing prospects in the summer 2023 considered might happen. Though to be fair we had moved it along 12 months ago as the company reported firmer rates. As EBITDA increases and debt declines the company should get to 1.5x before June 2025 I would have thought. |
Uppy downy in a mostly downy direction.
I will wait until its mostly uppy in a mostly uppy trend |
This should be trading above NAV never mind at just over half. Events have gone better than when I put on a 28p price target for year end earlier this year. Debt is being repaid more quickly, the backlog much longer, and rates higher. There will be a lot of people not buying because of the supply we have seen in the last 6 months and especially last month, so we'll get some FOMO when that tap suddenly ends, but I think that might also hold the share price back somewhat until the company makes shareholder returns, which will attract a different class of investors. |
Research note out from Zeus with similar info, also reiterating target of 29p. |
 Great news on the contract piece - and the extra vessel to Europe for offshore wind certainly helps offfset any cyclical / Middle East / oil price concerns. Bigger news, for me, is the debt reduction picking up the pace. Given the speed of paying off during July, August and September, (17.5m USD across the three months), and that EBITDA will likely be c95m-100 (as per updated guidance), the 2x threshold where the debt payment falls by 25bps could well be reached by early December. The PACE of debt reduction is increasing too. 1HCY24 saw 28.5m paid off, then the next 3 months saw 17.5, so a clear speeding up as increased day rates etc filter through. Notably, too, this rate is pinned to EIBOR, which is lower than the SOFR rate used to calculate previously. So where previously GMS was paying 300+ SOFR (which is currently 4.84%), GMS will (very shortly) be paying 225 + EIBOR (which is currently 4.73%). A fairly significant drop from, approx 7.84% interest to just under 7%.I am also still expecting an update (/upgrade) in the next month or so to 25E guidance, given that on the RNS from Sept 12, Alex noted "As for our guidance for 2025, we are in the process of revisiting it and shall share it with you in the next couple of months". |
ST has been tipping gms for quite a while. He is probably re-iterating. |
Can you just say who tipped it in IC? |
Tipped in IC |
Register to chat with like-minded investors on our interactive forums.
Hot Features
Premium
