Opg Power Ventures Share Discussion Threads

[space_dust] 01/2/2021 10:29

The last update was game changing by the looks of it.

[qs99] 01/2/2021 10:28

Looks like a few are tempted by the future yield and de-leveraging...DYOR

[space_dust] 01/2/2021 10:27

Only 25,000 shares available at 18.5p then it goes to 19p for decent size.

[mrmcnee] 01/2/2021 10:15

Nigh impossible to buy in any decent size this morning, I cannot see many sellers around current levels either.

Looks like this could be materially re-rating over the next few weeks, in a nutshell OPG is generating significant cash, undervalued for sure.

No reason why 50p+ a share is not attainable in due course, a return to dividends to boot!

[mikro1] 01/2/2021 09:55

HI Tim000 - same calculation as you ie cash at end of Q3 minus cash at end of Q2 minus the 9.5 mill of cash collection of historic debts.

[tim000] 01/2/2021 09:17

Just for interest, mikro1, what are your calcs for Q3 FCF? Net debt reduced by £16.0 mn, but that includes the extraordinary item of a one-off receipts windfall of £9.5 mn. Netting off the two gives an estimate of underlying FCF in Q3 of £6.5 mn, so between £6-7 mn!

[tim000] 01/2/2021 09:00

Good point about coal prices, personally I have a natural hedge in place in the form of shareholdings in coal miners. Of course, there is also upside from higher load factors than those achieved in Q4, which only included one month at 70%.

[mikro1] 01/2/2021 00:20

Remarkable cash generation in Q3 (I calculate it to be approx £7 million), power generation levels nearly back to normal. The only fly in the ointment in my opinion is the current high coal price - due to a bitterly cold winter in Asia and a trade war between China and Australia. But OPG have bought all the coal they need until the end of March - so if the thermal coal price normalises by April this will become a screaming buy.

[jailbird] 01/2/2021 00:00

Just read H1 results again Performed higher profits and EPS for who previous Half year in just H1 this year with half revenues HY Sep20 HYSep19 FY 31 Mar GBP million Revenue 36.1 78.4 154.0 ---------- ---------- ---------- ADJ EBITDA*. 19.4 18.0 31.2 ---------- ---------- ---------- Profit Before Tax 12.8 9.7 14.5 ---------- ---------- ---------- Profit After Tax 11.8 8.2 8.0 ---------- ---------- ---------- Diluted Earnings Per Share ("EPS") (pence) 2.92 1.97 2.09 ---------- ---------- ----------

[tim000] 30/1/2021 09:07

Indeed, massive cash generation implies no need for new share issues, provided they stay on the straight and narrow and don’t wander off course as they have done in the past. Hopefully they’ve learnt their lesson.

[mrmcnee] 30/1/2021 09:00

Thanks for clarification on that, so from circa 350m is 2016 to 400m now, still very good.

[tim000] 30/1/2021 08:55

MrMcnee, they’ve had scrip dividends, the share capital is 400.7 mn.

[tim000] 30/1/2021 08:54

Comparing H1 results with those announced yesterday, FCF seems to have been about £6 mn in 2020 Q4. Assuming this is a representative quarter, net debt will be cleared by end-September and unrestricted cash will have increased to over £40 mn! With ca 400 mn shares in issue, the company can easily afford an annual dividend of 2p, ie one third of annual FCF. It would make sense to introduce an interim dividend next year. Assuming an annual dividend of 2p, that gives a yield of ca 12%! The share price is far too low. (DGOC, a US gas company, is similar.)

[mrmcnee] 30/1/2021 08:52

I was pleased to discover that OPG still have the same number of shares in issue (circa 350m) as they did when the share price was 75p in 2016, to not issue any shares in 5 years is excellent.

The recovery here is plain to see, I was very surprised the market did not take this far higher yesterday but it can only be a matter of short time before a meaningful re-rate occurs.

50p by mid year ?

[tim000] 30/1/2021 08:07

As I understand it, the company has a contractual, fixed debt repayment schedule over the next 3-4 years which it can do nothing about, unless it is able to renegotiate the terms of the debt with the lenders. In the meantime, the recovery in load factors (over 70% in December) and low coal prices, plus the £9.5 mn windfall in November, has resulted in a massive cash build in Q4, which will continue going forward. It makes sense to return some of this surplus cash to shareholders by resuming dividends. Note also that the next scheduled dividend won’t be paid until near the end of 2021! By which time the company will be swimming in cash. This is now a high dividend yielding stock, with an increasingly robust balance sheet and growing demand for its output as the Indian economy booms. So great prospects for capital and dividend growth. An overlooked gem.

[jeffian] 29/1/2021 15:45

beangrinder,

My comment about the Scrip Dividends was a response to the previous comment that "OPG should stick to the previously stated plan and clear the debt (10% coupon) before resuming dividends". As you say, you don't need cash to pay a SD, so debt reduction would continue in any event, which was my point.

[greg the grinch] 29/1/2021 12:20

Hmm... considering the planned sale plus usual cash... debt free in 7 months? :o)


Then pumping out cash.... invest that wisely in green tech and a big rerate?

[beangrinder] 29/1/2021 11:43

I'd be expecting cash dividends. The statement links strong cash flow with shareholder returns? You don't need cash flow for scrip dividends.The borrowing will be cleared by 2024, presumably because of punitive penalties if it's cleared earlier. Net borrowings of only £19m. The risk has gone out of this company over the last couple of years and valuation remains very low.

[jeffian] 29/1/2021 11:27

#5608,

They pay Scrip Dividends (shares) not cash.

[wetpantz] 29/1/2021 09:55

OPG should stick to the previously stated plan and clear the debt (10% coupon) before resuming dividends. Perhaps the debt will be cleared earlier than anticipated give current cash generation.

[thirty fifty twenty] 29/1/2021 09:15

Mr McNee - lets hope you are right about OPG as you were about XTR
(from 1p to 5p (via 7p) - all clearly flagged by you well before the rise.

from the chart a rise > 17p would be very positive.

[space_dust] 29/1/2021 09:11

For those interested...

50k left at 16.7p then it goes to 17.3p with IG, size has been small all day.

[space_dust] 29/1/2021 09:04

Can't buy anything on-line since the open, I reckon this is going to move up strongly over the next few sessions.

[mrmcnee] 29/1/2021 08:45

Return to dividend payments and significantly reduced debt, a recovery play, the share price was 75p 5 years ago.

Nigh impossible to buy early doors, looks like it will soon be in the 20p's

[thirty fifty twenty] 29/1/2021 07:52

The CASH generation here is incredible.
Even in Covid year with turnover significantly down they are able to generate big CASH - and there is still the >13.5m asset sale to benefit!
net debt is now 20m and will be less at the year end,
so debt/EBITDA is well less than 1.
which puts the business on a EV/debt multiple of <3times
OPG is not without risks but given that they have actually delivered on their plans since 2018 and net debt has reduced from >80m to <20m in 3 years
that is an average c.22m per year of Free CASH Flow and the MV is <60m!
the risk reward i think is outstanding,

the most critical for me,
is that there is now clearly a huge Head & Shoulder bottom pattern in the shares,
indicating that other investors see the share price as having bottomed and now set to recover.
fingers crossed and time will tell.

All IMHO, DYOR + BoL
OPG is in m top5 hldgs