Slightly wonky cup and handle, but could be one |
PG I believe are joint broker. I've met Mansour and Alex in their office a number of times and if I recall correctly it was Panmure who did at least part of the raise in 21. Either way, good to see them banging the drum this morning. Even if the note is not materially new or exciting, the more people get to know where the story is CURRENTLY and not historically, i.e. the market catches up, the wider an audience GMS has. Can only be a good thing! |
I think I am correct in saying that Panmure represents an additional broker with coverage. Stockopedia currently suggests 2, though there are three that regularly produce notes, Zeus, Tamesis and Greenwood Capital Partners. I guess as Greenwood was only established in 2024 Stockopedia draws from the former. Added covereage is always a good sign. If I recall correctly it is Peter Lynch that wrote the move from under-covered to well covered is a prime time for multiple expansion. |
It does feel like the Panmure note, or at least a draft, may have been put under a few noses before today... |
It's difficult to believe the Panmure note was out today. Net debt / EBITDA should reach 1.5x about the half year. There is setting up for a beat and there is losing any sense of precision. Still, one presumes their target price applies to that condition, which is all good. I would like to see a combination of buy backs and dividend, weighted depending on the prevailing share price, and mindful that dividend investors hate dividend cuts and like dividend increases. Ideally quarterly dividends too as there is no seasonality to the cash flow. Much as I prefer buy-backs I acknowledge that a dividend attracts a whole new cohort of investors. |
Thanks Rivaldo. |
>> with the net debt projected to be US$160m (net debt/EBITDA ratio of 1.5x) by December 2025>>
Debt reduced from $267m at 1/1/24 to $221m at 30/9/24 – an average of just over $5m/month – so a further projected reduction of $61m over the 15 months to end December 2025 seems to be conservative (given interest is being paid on reducing debt pile, lower interest rate now payable and, if anything, higher day rates), unless Panmure are assuming capex or dividend payments during the current year. |
Many thanks, good summary. |
 New 15 page Buy note out today from Panmure Liberum with a 30p target price.
They summarise as follows:
"Since 2021, the primary focus for GMS has been around deleveraging. This has now largely been accomplished due to favourable markets with the net debt projected to be US$160m (net debt/EBITDA ratio of 1.5x) by December 2025 - it was US$406m and 8.1x in 2020. Accordingly, the narrative has evolved such that GMS, having regained the trust of the banks can consider payment of a dividend, share buybacks or possible expansion in the fleet by way of buying or leasing further vessels. In effect, its recovery story has moved on which has yet to be fully realised in the share price. We maintain our BUY recommendation and target price of 30p.
Demand outstrips supply for vessels – FCF yield of over 20% GMS is benefitting from a favourable macro-backdrop of improving demand for its vessels both in the Gulf region and the North Sea coupled with a tight supply of vessels. This has led to a potent combination of increased backlog, day-rates, utilisation and cashflow. We see this positive scenario playing out for, at least, the next three years given the lead time in supplying new vessels and the upbeat outlook for Oil &Gas and Offshore Wind Projects.
Capital allocation – what happens now? The priority in 2025 remains deleveraging but options are materialising: 1) pay a dividend 2) engage in share buy-backs, or 3) expand the fleet by buying or leasing another vessel. All three options are feasible and to highlight how attractive a dividend payout of 25% would be – it would imply a dividend yield of c.5% which would be 3.8x covered and cost only US$11m in cash terms in 2026." |
Seafox have got another approx 51m shares to distribute which is roughly £9.2m worth, at current prices. Looks like shares are being absorbed, so not the worse overhang.
Also - 53.4 million warrants potentially giving right to 83 million shares remain to be exercised up to June 30, 2025.
And from Aug. 2024 positive statement on institutions - "GMS continues to monitor the positive changes to its shareholders register. We welcome our new investors and are pleased to see institutions showing increasing interest, higher than we've been seeing in a while." |
hpcg any interest over 3% is declarable via a TR1. So whilst you might be right it isn't significant yet. I feel that investors are waking up to the upside prospects. |
9% of the float has traded since 15 Jan.
Another high volume day on Friday comparable with 28 and 29 Jan.
With the exception of 31 Jan, high volume days have seen the price go up.
I probably don't need to tell anyone, but there is accumulation going on and it goes far beyond those coming from Seafox shareholder hands, with some uncertainty about what might have been forward sold.
Analysing the period last year of relative consistent trading above 20p 2024-03-11 to 2024-06-27 14.4% of the float was traded, of which a quarter was higher than 21.66p. About 12% of float has been traded above 18.61p is the recent past. In other words over head supply is tangible but probably not so significant.
In the main Seafox selling period the 2nd 6 months of 2024, 40% of the float changed hands, just over 50% of that, so 20%, at prices below 16.2p. So the amount available for profit taking is somewhat greater but I don't think should kick in in a big way until circa 22p. 50% in under a year is a market beating return any time.
IMO a rational, defensible, price to have closed the year was 28p, and the company is adding meaningfully to EV every month. The shares are still an excellent buy with much upside.
* all proportions are based off the fully diluted share count * |
https://tipranks.onelink.me/WJho/eomcjine |
Seafox are distributing in specie against their will. It is really difficult to say what proportion I made available by individuals thereafter. I guestimate between 1/3 and 2/3 and a subset again are sellers at any seemingly any price, though I suppose any price above 15p is more precise.
There is some suggestion in the price action that some prior sellers are now retaining what they now receive. 1% of the float is approximately 10 million shares, with a tad under 5 million traded today according to ADVFN. Receipt of shares and day of selling probably aren't much related - a seller could have their broker sell long before the receive them if they wished. Price action suggests 1 of 2 things. Either there is competition for any shares made available, or the keenest sellers are out already and will be making good on the next distribution. The buyer or buyers might well know that. Indeed the odds are that happened on 22nd and 23rd Jan I would say.
The above normal volume and modest rise today does suggest some more availability at 18p or so; about 500k shares were worked out at 14:35 for the 18p and 18.05p low of the day. In other words whatever shares a Seafox shareholder puts on the market are being snapped up and really just merging into the rest of the trading activity. |
Go on seafox do your best and this can get moving higher eventually |
Seafox offloading again |
 Yeah there is some serious demand on the bid here at 18p.
A 5k order can be a whopper, let alone these 100k and 150k blocks on the book today. The market has just tried to sell through 18p, taking out the 100k block and 50k block on the bid.
The bid has just reloaded with a 150k order and a 100k order.
There was a 100k iceberg on the offer at 18.1p that has been eaten through as well as 100k at 18.05p.
We now have those blocks of 100k and 150k on the bid at 18p holding support versus a persistent 100k seller who was sat at 18.15p on the offer.
This is a fascinating ding-dong.
Ordinarily, GMS goes romping through 20p on demand like this. Clearly still some sellers to clear who aren't patient and some stale Bulls.
The encouraging thing is that this was at 15p and now there are buyers in size at 18.
And this all in spite of a continued overhang.
If they let up...they could easily get 20p imo...the market could easily sit there, considering the way they are coming in for shares here.
But at least the sellers are being given a contest here.
How about some whoppers to clear em out and allow a price release higher?
All imo
DYOR |
Pleasant progressive accumulation all day today as you say Sphere. From a chart perspective the pull back and support at circa 17p will have informed watchers that it is long odds of picking any up at 15p even if Seafox should be forced by its shareholders to distribute its entire holding.
I guestimate that in total availability from that be about 2-4% of float, or £3.8m - £7.6mn worth at 18p. Even at the lowish volume of 3-5th Feb that is just 18-35 trading days. In reality we can see that when those shares are made available volume increases as those shares rapidly move into longer term hands. I would imagine Seafox make strong representation to their shareholders of the importance of retaining a significant stake. |
A little book build on the bid here just now with decent orders at 17.7-17.8p.
Another go at 18p about to come?
15:02 UPDATE:
Bid-offer is 17.95p-18.05p.
That book build is a buyer in size, who has popped up to bid at 18p - can lob a load there.
Can't buy anything meaningful at 18.05p
Noteworthy.
Surely the sellers don't sell on that? Surely?
15:07 UPDATE
There...see...
100k bid at 18p and now 150k bid at 18p
Irregular for GMS
All imo
DYOR |
I completely understand the warrants. If as you suggest the outstanding warrant holders are all so keen to sell as soon as they get hold of the shares why are they waiting? They can convert today, they could have converted yesterday. They could have converted every yesterday since a couple of days after the warrants were issued. As you rightly say they could take their profits now, yesterday, 3 months ago, a year ago, whenever, yet they have chosen thus far not to. Crazy. Unless of course they intend to keep the converted shares, in which case converting at the last minute keeps the payment for the shares earning interest.
Of course we could get a conversion notice for some or all of the outstanding today, tomorrow or any day up to the deadline. I would not at all be surprised if there had been forward selling, and there could be more forward selling.
Your fear that the shares will be converted at the half year and be immediately offered to be sold irrespective of the share price at the time does not bear up to any scrutiny or evidence. The warrants will be converted, I'm pretty sure on that, so anyone doing their own calculations must sensibly be using the fully diluted share count.
I suspect those holding out to June to pick up shares at some perceived liquidity release will be in for a rude awakening. |
"""""34.2 million warrants were exercised, and 53.5 million shares were issued accordingly during the first 9 months of the year at the price of 5.75p per share. 53.4 million warrants potentially giving right to 83 million shares remain to be exercised up to June 30, 2025""""" This is separate to the Seafox distribution |
I don't think you understand. You're confusing warrants with distribution |
Nice to be up today on a tough market day |
Yet the share has closed above 17p on many days since the warrants were issued and only some have been cashed in. Indeed you are asking the wrong person as I don't hold any warrants. Ask yourself, or even better, an actual warrant holder, why they aren't taking their profits now in a click?I understand the fears, but the evidence isn't there. My shares are for sale at a price, so are everyone's. That is 100% of issued shares could be offered at any time. |
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