Steppe Cement Share Discussion Threads

[scrwal] 28/9/2022 13:23

eggbacon It looks like they are forced to pay the wht as there is no scope for any form of capital return because of the group structure and where the holdup is.

It seems they could be working out how to restructure the entire business including corporate residency locations but that takes time and may not help the Malaysian shareholders anyway. The current structure has hit them hard but you always run the risk of Governments changing corporate tax legislation and generally you have to bite the bullet when that happens.

[scrwal] 28/9/2022 13:06

Thordon

Nope you are wrong. The withholding tax is on Foreign Sourced Income which is basically the dividends passed up through the group. As a consequence no dividends would have been paid from the Dutch subsidiary upwards to the next level which is a Malaysian company.

The interims also clearly show the cash is not in the holding company but held by the subsidiaries.

Yes the tax issue is Malaysian but it affects the companies and individuals.

[bluemango] 28/9/2022 09:51

Added. Well within the spread and shown as a sell (as I suspect has happened with the other trade reports so far today)

Edit: well at least the trades before the 5k.

[eggbaconandbubble] 28/9/2022 07:46

Why don't they pay the divi and withold the tax pending the outcome of the negotiations.

If then they have to withhold the tax they can work out what to do on future occasions which all in all would improve their current bargaining position.

[thordon] 27/9/2022 22:44

scrawl its because of Malaysian shareholders that the issue , pre-tax has been paid on earnings in the country.
Myself has a ISA so no Tax issue , the holding company which holds the cash wants clarity before paying dividend.
So this is about personal tax and paid tax on company's profit.
If Malaysian say if pretax profit is less then there's then a difference in imported company's profits will be made including personal tax.
Its not a very good law in Malaysian state.
As far as can see investigating this is only local and really not a problem to pay dividends except the mayor shareholder is Malaysian.

[scrwal] 27/9/2022 20:00

It's not the free float it's because at the moment they can't move any money up the chain to the holding company.

[thordon] 27/9/2022 19:52

Free float of shares tight , Dividend only option.

[danmart2] 27/9/2022 18:42

Why can’t they do a mix of share buy back and dividend?

[miti 1000] 27/9/2022 11:52

Hi Matt , struggling away like everyone...its been a painful year. Am out of AAZ, didn't much like the move in to Canada .As for STCM , the potential dividend still makes it compelling longer term. More than happy to buy on weakness whenever it dips.
I really should look into when they need to update their expenditure plans to maintain their production. Other than that and KZT/$ what's not to like.

[gutterhead] 27/9/2022 10:39

Once the div gets paid it’ll become more real

[return_of_the_apeman] 27/9/2022 09:50

11p over 9 months on 33p a share is equivalent to around 44% annual yield elsewhere

Share price could double from here and still support a yield of 9% @6p pa

[elpirata] 27/9/2022 09:29

Agree entirely Matt, Ive previously sold out of the likes of BKG when theyve announced 'return of capital' by share buy backs which equate to only a low single digit 2 or 3% of the free float and thus have no impact on the share price, but taking out a third of the free float!!! The share price impact would be beserk.

[mattjos] 26/9/2022 22:25

In many instances, markets can stay irrational for longer than you can stay solvent but, in the case of those holding STCM shares, staying solvent whilst waiting for market sanity to return is hardly difficult, given the attaching yield - which will arrive one way or t'other.
If there even a sniff of a share buyback, given the size of the cash to be returned and the limited free-float, this will be through £1 in days

[mattjos] 26/9/2022 22:08

Miti, glad to see you still here …. this must be a rare bird long-termer in your portfolio.
Hope you're keeping well

[danmart2] 26/9/2022 21:59

Good RNS, good price to get in at, will try and do some moving of funds ahead of Nov.

[mattjos] 26/9/2022 21:56

Market is plain daft if it cant see the well established trend here.

Thankfully still just far, far, far too boring for the herd
Personally, am more than happy with the company progress.
Kazakhstan cement consumption / head is still way below most other developed nations and will keep growing for years ahead but, it's likely only going to be 'steady away' for all those years.
Steady Away in such times is fine for me

[lloydypool] 26/9/2022 14:09

Seems a pretty large dividend given the cash position, shame it sounds like they've converted its to GBP too.

[scrwal] 26/9/2022 12:59

They can't do buy backs/ capital return because the £11m cash isn't held by the holding company and there doesn't appear to be any solution yet as to how to shift the funds upwards if it is possible which is looking unlikely.

It looks like the only fall back plan is to bite the bullet on the withholding tax. The current cash position is only $14.7m for the group.

[elpirata] 26/9/2022 11:48

talk of a share buy back is simply a red herring imo, because

219m shares in issue

free float is 44.9% ie 98.3m shares



£11m divi retained @ say 33p share price = a notional 33.3m 'buy back' shares equating to 33% of the free float, and what do stcm do about net distributable profits this financial year, another 33% buy back?

Whats that going to do to the share price if it was ever viable in the first place!

[return_of_the_apeman] 26/9/2022 11:27

My guess fwiw is that they don't want to do buy backs, as we know, this so often does not have the desired effect

Instead imho the divi/return of capital will be sorted in November or January. If it is delayed in November (by the Malaysian authorities dragging their heels) I expect this might provide another top up opportunity

They may even be trying to set expectations by saying November and expect it earlier, given panic created by the slightly late publishing of the interims

But that's all speculation, what's not guesswork is the fundamentals presented today; the figures were very encouraging indeed, I liked that margin is up and no mention of a slowdown in demand

[miti 1000] 26/9/2022 10:24

Added another 100k...well inside price.

[aleman] 26/9/2022 10:19

Last FY earnings were 7.8 cents after interims of 2.8 cents. These interims are 4.7 cents. What will this FY be? We might beat 10 cents. It's likely going to be pushing 9p and cash conversion is generally pretty good here. I don't think a 6p dividend is just wishful thinking - or at least a 6p return to shareholders in whatever form.

[eggbaconandbubble] 26/9/2022 10:16

Constable Ken? He hasn't dribbled over his keyboard for weeks!