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 |
Encouraging to see a UAE fund take on 40 million shares, only another 40 million to go. |
It may just be admin. eg Seafox instructed its custodian to distribute the shares to the custodian for each underlying holder. As those transactions complete the custodian reports a lower balance to Seafox and they, in turn, notify GMS. |
I don't really understand the distribution mechanism. All I can think is happening is they they are distributing in lots to everyone that are the size of the smallest holding in Seafox. To explain further assume the Seafox holdings are:
a 5%
b 10%
c 15%
d 15%
e 20%
f 35%
They would first distribute 5% on the GMS shares to be distributed to all parties:
Afterwhich:
a 0%
b 5%
c 10%
d 10%
e 15%
f 30%
The advantage of this way in terms of fairness is that all sellers have equal access to the market, even if they are partial sellers. And so on for the next tranche until the largest holder or holders get the final tranche.
I'm encouraged we are nearing the end of the distribution process, and to have a holding notification at last.
Picked up some more today at 5.15. I haven't done much in the 14s but with both the distribution of the Seafox holding and the budget approaching fast the time factor is less of an issue IMO. |
Yes - Seafox have transferred another block of shares as an in specie dividend, reducing from 18.4% to 14.2%.
If last week's action is a guide we'd expect a fair few of those to hit the market in the next couple of days. |
https://x.com/rckhlldd/status/1843301160242835870?s=46 |
Ok, cheers |
From what I have heard, some of the holders (those to which GMS shares have / are being / will be distributed to) are a mixture of UHNWI family offices, and even the Qatari Royal Family (that last one is interesting as QE is a big customer of GMS). This is consistent with GS being one of the houses selling the shares yesterday - despite never having played in a name this small. Makes sense that GS would look after money and affairs for some of these UHNW family office types, so that checks out. APPEARS (though I'm at risk of looking even more silly than usual) that the overhang in the short term has cleared a touch, and vols returning to something like normal. |
Stemis - I don't know what his holding is now but there were significant corporate events in at least 2009 and 2014 that would have diluted his stake. |
Cordia Group acquired Seafox in 2005.
Seafox then merged with (or was bought by) Millennium Offshore in 2014
Millennium Offshore is owned by HM MOS International:
"The Principal investors in HM MOS International Limited include, amongst others, a GCC Sovereign Wealth Fund, MENA Regional Family Offices and also MENA Regional High Net Worth Individuals." |
I though Cordia owned Seafox |
whites...
always nice to read a comment where an obviously calm investor lays out the simplicity to a thesis. at the end of the day, this is a company where the fundamentals are booming. investors are being given an extraordinary chance to top up at c.14p and a 50% discount to NAV (with leverage reducing quickly, that is a very conservative way to look at the discount!).
horrible to wake up and see yourself losing thousands. but this should be a situation where those with patience and nerves are rewarded handsomely. |
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