R.e.a Hlds 9%pf Discussion Threads

[jaf111] 21/9/2023 08:21

I realise its still early but REA shares down 5% whilst Prefs down 20%…..this surely can’t make sense!

Results are obviously very poor but can’t see company going bust….

Divestments certainly on the card

IMO the Dec Prefs payment will be made….at 60p Prefs yielding 15% and even if they miss the December payments they are Cumulative Prefs so some further protection there…..

[ntv] 21/9/2023 07:50

I reckon they will be up for sale on best offers basis for any part of the business
They desperately need to reduce
Management missed a prime opportunity to raise some cash during the price bonanza times or to reduce debt in other ways
Coal price has picked up a bit recently but not enough to help

[pbaker] 21/9/2023 07:42

The half year results are out and REA is back to making a loss. They are not going to pay the 7p of arrears they owe on the preference dividend. They will decide in late November if they will pay the 4.5p normal payment. Fingers crossed.

I expect the shares to fall this morning, possibly towards 50p they closed yesterday at 73p.

The loss is not huge but it is not good news they can not make a profit at $900 for palm oil.

Once the sell off is over this morning the shares may trade back towards 70p and then it is waiting for news in November.

I am going to continue to hold, but not sure this is the most sensible move.

The company is not going bankrupt but if it can not make a profit in the full year then it could be a long slow decline.

I think the ordinary shares are worthless and the preference shares at 50p to 100p are the only value in REA.

MPEvans another palm oil producer in Indonesia could bid for the company its management can turn a profit at this level though this is an outside chance.

[cwa1] 21/9/2023 06:17

Pref overdue amount postponed, decision on standard half yearly payment to be made nearer the time depending on financial circumstances

[hpcg] 30/8/2023 11:45

CWA - I use IGs undated, which is a Malaysian Ringgit "contract". I don't think it matters unless one is trying to forecast company revenues. I always have my IG screen open so it take me a few seconds to check. What the producers get paid is correlated rather than that amount. There is a FOB Indonesia price, but I think that is only available via subscription.

[tradertrev] 30/8/2023 11:18

I use this one, it's Malaysian traded prices in Ringgit

[cwa1] 30/8/2023 10:07

If you don't mind me asking hpcg, which price source feed do you use to keep an eye on CPO prices? I know there's a few about but wondered which one you favoured? Cheers

[hpcg] 30/8/2023 09:55

CPO price is constructive. June saw a clear bottom and a much higher low has also been passed in the middle of this month. It still has work to do for our favour, specifically clearing the July high and thus confirming an up-trend. Whether it can break out of the range for the past 14 months is another matter, but just seeing it play at the top end would be helpful.

[dandigirl] 22/8/2023 18:50

pbaker: checked your figures and came out near your figure. Interesting times.

Think I will wait to see wait for the next update though.

Thanks for doing this.

[hpcg] 22/8/2023 14:39

Sorry, you are quite right, I was drawn to the 0.0 without looking at the column headings. My only interest in the ords is their money raising capability so I don't concentrate especially hard. So, just through 5% and a long way to go to exit fully.

[cwa1] 22/8/2023 14:30

Are Odey out of the ords?? Doesn't seem like that to me

[hpcg] 22/8/2023 13:48

Good to see Odey out of the Ords. Price today suggest this is what some buyers have been waiting for.

[cc2014] 22/8/2023 13:42

No, that hasn't been possible for the last 40 years or so.

[outsizeclothes.com] 21/8/2023 21:39

Could Evans also use historic losses here in a takeover situation against their profits ?

[pbaker] 21/8/2023 18:00

Dandigirl page 91 of last years report suggest $257million net assets. Take off Goodwill and intangibles $15m so net assets $242m. Increase in debt by $9m net $233 Into pounds £179m. Ords £23m Prefs £49m. (prefs £72m at par).
So £107m net assets attributable to ordinaries.
At the moment just over 230p per share.
Hence my hope that MP Evans swing in and snap up the company for 100p per pref and 100p per ordinary netting them a tasty £50million profit in assets.
With their cash and management it might be worth a lot more to them.
Check my math as I just do my calculations on a post it note.
There may also be other things we have not been told?

[dandigirl] 21/8/2023 14:40

Hi

Does anyone have any idea of the net assets per share please?

Ords share price now 52p and prefs 66p. Surely this is bargain territory?

Just wondering.

Thanks.

[morton2011] 16/8/2023 11:41

Agree with dandigirl just got to wait.A lot of debt and loans swirling around and they are flagging that the old repayment due of 7p likely to be missed for the pref end of the year. The coal and stone remain a known unknown here. Board stated they want to sell but when and at what price remains opaque. They produced a lot of cash last year which helped pay down the overall debt. Don't buy these prefs for regular and reliable income.

[pbaker] 15/8/2023 15:51

Dandigirl. The thing i am struggling with, is the CPO price has been between $855 and $1160 for the last 12months. I do not know what CPO price the company need to break even, as they will not or can not tell me. I have asked.
I think this level should be profitable? If they are why would they increase borrowings by $8.1million at a cost of $8.5million plus interest?
That seems like needless and expensive borrowing if they are profitable?
Though if they are borrowing the money to have the cash ready to repay the arrears then I would be happy.
They last stopped the preference dividend when the CPO price had been below $580 for 14 months.
I am always gloomy my RAVP shares got suspended and the loss of the preference dividend there, hurts every three months when the income does not arrive. Though even with those I live in hope.
So i presume the worst until proved otherwise.
Just before the market closed I bought 2000 at 69.7p. I had some cash in my SIPP.
If the arrears are paid that is a 16.5% yield for 140 days holding and then an ongoing yield of 12.9%.
Either these are very very cheap or something really bad is going on.
There are so many concerns and I will read the half year statement avidly.
I look forward to it giving clear details and reasons for the extra borrowing and their thoughts on the weakness in the company share price.
Including preference share the company is capitalised at £73million. Enterprise value £250million?

[dandigirl] 15/8/2023 11:45

Wooooooow! If the company survives! Why the doom and gloom? Let's see the interims before getting worked up. Last year was the first time REA had been profitable for years. What has happened that I missed? They have only added $8m in debt. Anything else? Sure, the CPO price has languished and the taxes don't help. But, hey, let's wait and see.

[flying pig] 15/8/2023 10:05

The decline in the share price is a concern. If the company survives, they are very good value. If the company becomes insolvent, they are certainly not.
Using hindsight, I probably bought rather too many at a higher level. However, hindsight is always 100% vision. It seemed like a good idea at the time.

[34adsaddsa] 14/8/2023 19:34

Is the choice about whether or not to pay preferred dividends completely at the discretion of management or are there rules they have to follow?

[dandigirl] 14/8/2023 19:23

guess we will learn more with the interims next month.

in the meantime we can but hope that the price of CPO doesn't soften any more and that the Indonesian government doesn't load any more taxes.

can't see evans wanting to get involved.

all a bit grim as the board appears to have no plans at all other than kick the can down the road.

[pbaker] 14/8/2023 18:33

At this level it suggests the company is going to pass the dividend. It also suggest that the company is going to the wall. Is it that bad?
Could MP Evans ride to the rescue? They have the management team. Do they wait and pick it up from the administrators in 2 years? Will the company last that long?
It could just be a stock over hang Odey asset managements stake being sold down.
The ordinaries are not moving but they are only option money.
Palm oil is weak but not as weak as last time the dividend was passed. Though costs have increased. I am really worried as have 100,000 and they produce 30% of my pension income.

[russman] 14/8/2023 17:29

last time the prefs were 75p REA passed the divi.