Kenmare Resources Share Discussion Threads

[orchestralis] 10/4/2024 07:30

Decided to hold off buying and wait for the ex dividend drop, as it might be greater than the div itself.

[creditcrunchies] 10/4/2024 06:11

Last day to get a massive dividend. I think this is the highest single dividend I've had in my SIPP to date. These are always good for pensions especially if in drawdown where you're taking income from the magic 4% a year figure from your capital

[robmcelf2] 05/4/2024 10:17

I think the bull case for KMR is lowest quartile cost ilmenite producer with biggest ilmenite mine in world. Supply outstrips Tio2 demand pushing prices higher. Length of mine over 100 years. Pretty decent long term prospects. Annoying the capex to move WCP A to Nataka is so high but there are some output gains as a result of the changes too I believe.

[clive7878] 04/4/2024 13:01

I am concerned that KMR could be following SLP -
which was on a low pe of 3 and now has a volatile share price.
The final dividend yield - ex div 11/4 - is a very good percentage,
but the share price cud fall as a result on 11/4, so much of that cud be wiped out.
I've experienced before. One needs more reason to invest than the dividend.

[the original goldbug] 04/4/2024 09:44

The dividend is clearly not sustainable during the upcoming capex program.

I hope people are buying it for the right reason that is long term capital appreciation in an undervalued quasi oligopoly situation.

[clive7878] 04/4/2024 09:25

robmcef2 - could well be. ex-divi this Thursday, 11th.
I'm thinking the same. But a little wobble today on the share price
Another divi stock is AA4 and the 5% per quarter
is guaranteed for the next 2 years.
It is forecast with KMR that earnings may decline over the next 3 years,
how solid is the Company with lesser growth prospects ?
Can they maintain the dividend percentage ?

[robmcelf2] 03/4/2024 17:03

I wonder if people are starting to buy in for the divi? Still plenty of capital appreciation to come as well imho. DYOR

[clive7878] 02/4/2024 15:23

SLP was on a pe of 3 but fell in share price. Depends how much they are spending on capex.
This was a poor recommendation in the I.C. sometime ago when the price was a fair bit higher.

[clive7878] 02/4/2024 15:18

SLP was on a pe of 3 but fell in share price. Depends how much they are spending on capex.

[rjmahan] 01/4/2024 22:37

Curious if anyone knows of any other natural resource companies similar to this with equal undervaluation ?

[robmcelf2] 30/3/2024 10:19

I can only think the $340m of capex across the next 2 years is a major dampener. Was interesting that when Carvill was asked about KMR being up for sale he said no one had approached them and why would they until they had the WCP A concentrator move to Nataka out of the way? KMR is hugely undervalued and I'm hoping a new CEO may help spark more investor interest in this co.

[clive7878] 29/3/2024 21:25

Tipped in the I.C. reported on a pe of 3 & didn't know why it appeared so under valued ?

[robmcelf2] 29/3/2024 08:52

Hi All- have just watched the video of KMRs private investors presentation a few days back. Please see below link if it's of interest. Lasts about an hour including q&a.https://m.youtube.com/watch?v=Da2kNVPgdHQ

[rjmahan] 26/3/2024 22:45

Interesting presentation - they recognise investment not been rewarded in the market but are continuing to invest anyway...

[yellowstoneadvisory] 25/3/2024 10:07

Kenmare Resources will host a webinar for private investors tomorrow at 12.30pm. Michael Carvill, Managing Director of Kenmare Resources and Jeremy Dibb, Director of Corporate Development and Investor Relations will present the FY23 results to 31st December which were announced on 20th March. Register

[robmcelf2] 22/3/2024 08:19

Nice director buy notification yesterday.

[the original goldbug] 21/3/2024 22:42

I think Rio's or a Chinese concern would make a better fit given the geographic footprint and commodity in question.

I expect the divvy will fall at least 65% for 2025 and 26 due to the capex spend.

[robmcelf2] 21/3/2024 18:57

P/E ratio of less than 3 - value will out in due course. Meanwhile decent divi. Can't stay this lowly valued forever surely.

[spectoacc] 21/3/2024 18:29

I thought KMR would get taken out long ago - by a GLEN or similar - but seems it's never been in play.

Pocket the divi in the meantime.

Country risk, and execution risk with the next move, but KMR have proven themselves with both over time.

[the original goldbug] 21/3/2024 16:56

Thanks Stemis - that is helpful. I still think they will be cautious on the dividend going forward given the expanding balance to finance the capex.

What I find extraordinary about this situation is that hey are trading at a 65% discount to sunk capex. This is a market that new players are unlike to enter. Should bode well for the longer term investor.

[stemis] 21/3/2024 14:48

Ok, I've done a bit more digging on factoring, if anyone is interested (which they don't seem to be, but I'll put it here, anyway, as a aide memoire for myself).

According to the notes to the accounts, KMR has 2 factoring facilities; Absa, up to $30m, for 80% of 3 of KMR largest (unspecified) customers and Barclays, unlimited, for sales under letters of credit. Neither seems to have been used much during the year, but at the year end there were $110.5m ($45.3m + $65.2m respectively) which could be factored.

In the prior year, the Absa facility was not used but $201.4m factored during the year under the Barclays facility.

So there is clearly some capacity to access more funding through these facilities if necessary.

[g1yns] 21/3/2024 12:39

Interesting summary in the IC yesterday..



The current valuation does look ludicrously low all things considered.

[parknas] 21/3/2024 09:57

Don't forget there could be another dividend in October.

[ukgeorge] 21/3/2024 08:53

Seems like a bargain down at £3 a share.

[stemis] 20/3/2024 10:25

Not sure there is much new in the results. Dividend of 56.04c is a cost of $50m, in line with what they said on 17 January - ("We expect total 2023 dividends to be approximately $50 million.”).

Ilmenite production guidance for 2024 is unchanged.

On slight note of caution is - "To the extent possible during this period, we will aim to pay dividends towards the top of our stated payout range of 20-40% of underlying Profit After Tax. However, additional shareholder returns will need to be balanced with a requirement to maintain a strong balance sheet to fund the programme."

Dividend in 2023 was 38.2% of PAT

According to 17 January statement, capex in 2024 should be $224m ($189m development projects, $6m improvement projects, $29m sustaining capex). Net cashflow in 2023 (exc capex, debt repaymnents, share buybacks but assuming same dividend as 2023) would be $103m. So it would need $121m from debt. That looks tight.

One other thing though is that debtors in the last 2 years have increased $61m on roughly the same turnover. I assume that's a reducing use of factoring. Presumably they could call on this if needed?