Steppe Cement Share Discussion Threads

[aleman] 05/10/2022 09:10

Government messes up bringing in unpopular new tax. Government backtracks. Government dithers about clarifying. Yes - I see a pattern.

[finctastic] 05/10/2022 08:47

Last year's interim was equally frustrating. Beginning to see a pattern anyone??

[thordon] 04/10/2022 23:41

Too deep , the problem is the major shareholder is based in malaysia which also is a director of the board.
So work it out it out it's quite simple.

[bluemango] 04/10/2022 22:32

#4906 You are omitting the closeness, assuming all is happily resolved in November & paid in Dec, of the next, similar (or perhaps greater in size?) dividend due in theory only perhaps 7 months later after that. It's not just a case of sorting this one and then the story (and inducement to continue holding) is then over; far from it.

[danmart2] 04/10/2022 22:11

I don’t know why they don’t do a blend of dividend and share buy back?

[scrwal] 04/10/2022 21:59

blue "they intend to pay it - bureaucracy allowing". True but there is no div showing as being paid for some time and is not 100% guaranteed to be paid - that is fact and is what a potential investor is presented with.

Yes we will know in November which is soon but given the length of time sorting it out there must be many investors who have looked at STCM and crossed it off their lists, which is their decision.

Yes we will get a big juicy dividend hopefully but it will decimate the cash held based on the balances per the interims. The price obviously gets hammered on xd day but does it recover given the recent performance, or does it perk up on the news so that xd drops to close to todays price- who knows.

[mattjos] 04/10/2022 21:12

219m shares in issuance
5p / share dividend cash, set aside for payment but, earning interest of some sort.

That's £10.95m Cash for the Divi alone, out of current Mkt Cap of £69m.
15.8% of the Mkt Cap is in Cash earmarked for a dividend payment.
In worst case, divi gets clobbered from 5p to 3.8p.

Indicated 33p to buy.

3.8p/33p = 11.5% Yield
5.0p/33p = 15.1% Yield

[bluemango] 04/10/2022 20:46

They've said as clearly as it's possible in the circumstances that the cash is set aside for a 5p dividend and that they intend to pay it - bureaucracy allowing. So your description of 'no apparent dividends' is unrepresentative of the actual situation, imo. Yes it's been a frustrating wait since July but there's literally only a few weeks now before November and the anticipated resolution of this issue.

Given the size of the yield (not only this payment but also the subsequent one of a similar magnitude only 8 or so months later!) if they can deal with this distribution satisfactorily, any reasonable shareholder, current or prospective, is realistically not going to mind about a few more weeks.

[scrwal] 04/10/2022 20:34

There is a problem for any potential new investor here - no apparent dividends and lacklustre growth/price sluggishness. Yes the business fundamentals are good but things are heavily weighed down by uncertainty and LTHs are hoping there is a favourable outcome on the divi because what does the share become if it changes into more of a capital play with low volume and a wide spread which can vary significantly during the day.

[finctastic] 04/10/2022 19:39

There is that and of course where this is concerned waiting to see if they do actually pay the dividends promised. It doesn't look great to any PI doing their research on SCs dividend payout success rate over the past 12mths. Patience is a virtue apparently but I for one won't be topping up here at least until the div drop.

[mattjos] 03/10/2022 19:04

Had my regular monthly drip investment here today and surprised it moved the price so easily.We're no longer exposed to US$ debit here & cash positive. A big chunk of 'divi to be paid' is earning a growing rate of interest & business is doing well. Amazing it's still so far off PI investment radar but, I assume many are simply now sitting their hands in the market malaise.

[danmart2] 03/10/2022 18:21

hxxps://www.malaymail.com/news/money/2022/10/03/britains-budget-bomb-still-ticking-despite-tax-u-turn/31473

[bluemango] 30/9/2022 11:24

Yep, would seem so.

[zangdook] 30/9/2022 11:22

People are being hit with margin calls and forced to sell anything they can.

[bluemango] 30/9/2022 10:53

It's all in the RNS's, decision expected Nov (so between 4 and 8 weeks from now), planning to distribute 5p which represents a stonking yield on current price, question is how the company avoids unnecessary tax. Not ex-div, and even if you haven't bought when div dates announced you normally have some days ahead until it goes ex-div.

As an aside, I find the last few days' slight price weakness bizarre in view of the yield on offer and can only assume it's people thinking they can get back in nearer the November decision at around the same price, which seems a somewhat reckless gamble?

[luckyclicker] 30/9/2022 10:52

From reading 13th of June RNS looks like they are waiting to make a decision on the dividend due to the tax is that correct so if I was to buy in today I would still be eligible for the dividend if it was announced thanks in advance for your reply

[luckyclicker] 30/9/2022 10:50

Could someone tell me if this has already gone ex-dividend or are we waiting for the decision and then there will be an ex dividend date was looking to buy in here thanks in advance for your reply

[danmart2] 28/9/2022 20:58

Indeed, I have shares in a variety of companies I would love to sell but Steppe is at the back of the line.

[mattjos] 28/9/2022 19:29

My take exactly Aleman. From what i have read and researched, we should be just fine but, awaiting the govt. clarification .. between now and then, the cash will roll up interest in the company bank account &, in part, fund the next dividend! We may be waiting until December which is a little annoying but, absolutely no reason to do anything other than buy more. Even if a tax is applied, the yield is comfortably more than inflation & extremely few alternates can offer even close to that.
The sellers here are simply the impatient & poorly researched .. the business is going well and slowly accelerating on most metrics. Value, Yield & Growth - Yes, Yes & Yes please, for me.

[aleman] 28/9/2022 15:02

They are just waiting confirmation of exemption from the tax, hence no plans from the company for anything else at this stage. The government has said it intends for foreign dividends for qualifying companies (basically those who have already paid tax) not to be taxed a second time and that clarifications on exactly who do and don't qualify would be forthcoming. Thoughts are that most dividends from already taxed entities will not see further tax but it might depend on who pays exactly what rates and where - a minimum of 15% was mentioned. I think the company believes it will qualify when the guidelines come out which is why it's hung on and taken no action. It sounds like the government is going to publish in November. I think the most likely outcome is no change in anything and a delayed 5p dividend but this cannot be confirmed until the government publish. Until then, we can't be certain because governments are known to change their minds!

[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.