The one share I own that worries me. No axe to grind but a nasty feeling this is going to suddenly lurch down to 30/32p due to x y and z. |
With the shares at 48p I thought the Presentation was reassuring. Top three investments appear to be doing well with good growth potential. Only time alarm bells really clanged was Driva but only a 4% holding.
Perhaps the most reassuring positive was the way they implied the dividend was still on track to be increased each year.
The greatest negative - having to increase the RCF to cover additional investment into portfolio companies. But what’s the problem as long as this investment yields a better return than the cost of the additional borrowings? However SEIT raised this as a reason for the sell off.
Whatever, this Presentation does not square with a 48p share price however you stack it. |
Ex a 1.58p dividend this morning. Pay day is 31/3, so not long to wait |
Presentation tmrro at 2pm courtesy of Kepler "Ideas for your ISA": |
A 2.5M UT can do that :¬( |
and drops straight back down again. |
A little whoosh there. |
Decent volume today if nothing else |
Well it looks like the train is about to leave the station here.
Parp! |
Seller cleared - whoop whoop (Yes, I am kidding) ;-) |
Hardly an isolated occurrence when there's a known seller who had c.40m to shift, but 998k at 48p through at 11am, and another 1.8m, also 48p, at 8.30am.
More interesting when it accompanies an share price rise. |
How can it be operational cashflow from holdco when holdco has no operations. They would clearly be being very deceitful if they were running up debt in operating companies paying that up to holdco and then passing that to the plc as 'operational net cash'.
I don't think they are that spivvy but if they are it will cost me. |
Hi Stemis,
Just cash inflow from investments. The only investments SEIT plc has is Holdco (SEEIT Holdco Limited). So cash inflow from Holdco. There's nothing in the definition that specifies how that cash is generated in Holdco.
If they use the term "operational cash flow" to describe the kind of technical situation you highlight here, then they are crooks.
I don't rule that out - as with any company, but I think it's unlikely, given evidence to date. |
I thought the recent discussion about RED illustrated why this focus on past performance is so misleading. RED have recently invested c. $80m in new plant, significantly improving margins. This will have increased BV but improving profits will only be reflected in future results.
And then to what extent will the Li-Cycle $475m loan boost future RED earnings? All I know is that Rochester is Li-Cycle's flagship battery recycling plant. On the face of it, $475m is a shedload of money.....!
I think we should focus more on the big picture stuff such as the life cycle of SEIT's assets and their limited exposure to energy prices. |
Nothing is going to convince some people that the dividends are sustainable. It is pointless even discussing IMO. They aren't bringing any evidence to the table and nor can those of us on the other side bring out any set of accounts to say otherwise. It is each to their own and with the exception of a couple of the more significant investors on this board the market won't even blink what ever we choose to do. I do however find the presumption that the price of any one financial instrument to be a definitive measure of ultimate discounted returns to be utterly ridiculous and without merit. |
The term "operational cash flow" is an explicit term that means its cash flow from core business activities over a period of time. It cannot mean cash generated from unsustainable activities such as asset sales so that Peter can pay Paul.
Actually the definition of 'operational cash flow' is "Cash inflow from investments net of operating and finance costs"
Just cash inflow from investments. The only investments SEIT plc has is Holdco (SEEIT Holdco Limited). So cash inflow from Holdco. There's nothing in the definition that specifies how that cash is generated in Holdco. |
I noticed the closing auction, buyers came in to match the big seller.
I doubt 2m shares will make a difference to the likes of Investec tho. |
Interesting closing auction. Has that cleared out the seller or are they many more shares to come? |
It's op cashflow that's distributable as the best measure Albeit only when also measured against the divi yield v market adjusted discount rate On the second measure there's not a problem On the first measure some degree of being uncovered is fine if there's balance sheet strength and the undistrubted cash is going on Capex Less good if it's newly locked cash in a long tenor project finance agreement |
We've discussed this before.
The term "operational cash flow" is an explicit term that means its cash flow from core business activities over a period of time. It cannot mean cash generated from unsustainable activities such as asset sales so that Peter can pay Paul.
Could they be lying about operational cash flow? Yes, but I've seen no evidence of that. The fact that they've only been around for 6 years is a worry to me, but not as much as if they'd been around for only 3 years.
My position is that I'm nervous, but not so nervous that I won't hold, and even pick up a few shares here and there. |
It says it's covered from, and I specifically quote "net operational cash received from investments". Whether or not that is perfect, make up your own minds, but at least let it be stated correctly.
US REITs, as we commonly state and restate, are valued on the basis of a metric not dissimilar. Who cares about profits in an IT? It's [net] cashflow, cashflow and cashflow - in that order. (absent of excessive leverage). |
Indeed, Lord Gnome |
Dividends covered by cash receipts are not the same as dividends covered by income or profits. Not saying that anything is untoward here, but the company is not being completely transparent. |
arbus5000 there is project level debt also. |
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