Share Name Share Symbol Market Type Share ISIN Share Description
Steppe Cement Ltd LSE:STCM London Ordinary Share MYA004433001 ORD NPV
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 43.50 17,765 00:00:00
Bid Price Offer Price High Price Low Price Open Price
42.00 45.00 43.50 43.50 43.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Construction & Materials 54.69 9.58 3.73 10.5 95
Last Trade Time Trade Type Trade Size Trade Price Currency
12:58:13 O 3,088 44.30 GBX

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Date Time Title Posts
02/12/202213:02Steppe Cement - Kazak Infrastruture Play5,224
25/11/202015:08anyone know anything about steppe cement ?11

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Posted at 12/11/2022 10:12 by wanobi
FWIW - here it is,

Steppe Cement's (LON:STCM) five-year earnings growth trails the stellar shareholder returns - Simply Wall St - Published November 11, 2022

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is Steppe Cement Ltd. (LON:STCM) which saw its share price drive 120% higher over five years. It's also up 43% in about a month.

The past week has proven to be lucrative for Steppe Cement investors, so let's see if fundamentals drove the company's five-year performance.

Our analysis indicates that STCM is potentially undervalued!

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over half a decade, Steppe Cement managed to grow its earnings per share at 74% a year. The EPS growth is more impressive than the yearly share price gain of 17% over the same period. So one could conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.45.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on Steppe Cement's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Steppe Cement's TSR for the last 5 years was 209%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective
It's good to see that Steppe Cement has rewarded shareholders with a total shareholder return of 14% in the last twelve months. That's including the dividend. However, that falls short of the 25% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Steppe Cement has 1 warning sign we think you should be aware of.

Wan :-)

Posted at 10/11/2022 09:12 by tigerbythetail
Well, a bird in the hand is worth more than two in the bush.
And a dividend declared is worth a lot more than a dividend promised but delayed and snared up in corporate tax niceties.
So what is STCM worth this morning? Company is stable and well-run. Current trading and outlook is good. Other than this year's delayed dividend (5p), we should be looking at another 5p - 6p dividend next July.
Based on the numbers, I'd expect the share price to rerate into the low 60s on this news. But the free float here is very low, and AIM is unpredictable, so if this "runs", it could go much higher.

Posted at 06/11/2022 21:29 by bluemango
So a 5p dividend should be at a 8% yield, giving a share price of 62.5p. That sounds a satisfactory start.

But Mattjos was arguing for a 2023 dividend (payable just over 8 months from now) of 6p, which at 8% yield would equate to a share price of 75p.

Posted at 05/11/2022 18:39 by mattjos
What likely to happen is as follows:

Each shareholder receives a 5p 'B' share for every Ordinary Share they own.

The company will then buyback all of the 'B' shares from all of the shareholders at their par value of 5p ea.

This will be carried out together with a consolidation of the Ordinary Shares & the rate of consolidation will be equal to the sums expended in issuing/buying back the 'B shares.

The net effect should be that shareholders receive the intended 5p / Ordinary share payment and the total number of the shares they own will be reduced in quantity.

The near term effect should be slightly different to a dividend as, under ordinary circumstances, the share price drops on the Ex date according to the sum of the divi payable.
On this occasion though, that 5p share price reduction will be negated by their being an equivalent reduction in the number of shares in issuance & therefore the share price should remain flat on execution.

Posted at 27/9/2022 08:29 by elpirata
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.
Posted at 26/9/2022 10:48 by elpirata
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!

Posted at 31/7/2022 21:12 by 3800
I think retirement fund is pointing out legitimate concerns If the dividend gets paid all is Ok and the share price is very very cheap. but there is a chance that it won't and as time goes on that becomes more of an issue, a passed dividend here would crush the share price. It's not a total dead cert that the dividend will get paid just very likely.

Posted at 14/6/2022 11:55 by scrwal
Since my post 4591 I have been thinking and had a sort of eureka moment which actually invalidates what I said and also invalidates the comments made afterwards - sorry.

I have only owned STCM since the start of this year but hope I have got the prior year analysis below correct.

This is how I see the situation, with the major assumption that cash is moved up the chain of companies by way of dividends - which has to be the case otherwise why is there a problem anyway.

The Kazakh companies make all the cash and paid an interim and final dividend to the Netherlands company.
The Netherlands company on receipt of the divi then paid a dividend itself to the Malaysian company for the same amount.
The Malaysian company on receipt of the divi then pays a dividend to "STCM" for the same amount.
"STCM" receives said divi and then pays dividends to its shareholders.

The Kazakh companies make all the cash but to avoid a withholding tax can only make a dividend payment once the accounts are audited and approved. The divi goes to the Netherlands company.
The Netherlands receives the the 5p divi but if it pays a dividend to Malaysia this suffers a 24% withholding tax on Malaysia.
Malaysia when it receives any cash can pay a divi to "STCM" as normal.
"STCM" receives and pays a divi as normal.

This means the bottleneck occurs at the Netherlands to Malaysia level, not at the "STCM" level so any actions do not directly affect STCM shareholders nor should they be actioned at the "STCM" level.

The course of action will be determined by the murky waters of taxation and accounting in respect of trading profits/losses and capital gains/losses.

Depending on this a course of action could be as follows
Netherlands does a scrip issue and then buys back said shares for a sum equal to the divi. The shares are cancelled.
Malaysia receives the proceeds and pays out a divi to "STCM" for the same amount. No withholding tax is paid as it hasn't received a foreign dividend.
I'm not sure how the transactions would be reflected in the respective financial statements nor how they would be treated taxwise in Malaysia or the Netherlands.

The big advantage for STCM is that all this will be an intragroup event cancelling out in the consolidated accounts subject to the costs of whatever scheme is used.
Also the legal requirements will be lower hopefully for whatever is done at the subsidiary level rather than those at a stock exchange level.

Posted at 13/6/2022 17:36 by king suarez
Hi kenmitch, yes I read your post, which prompted me to post.

I'm not saying the price of STCM could/would not go down following a buyback - anything could happen. The price is down today, despite great results after-all. If we are about to enter a recession, even a great dividend might not stop the rot as future lower prices/demand become factored in?

For a counter example see Goldplat, which initiated a buyback programme recently at the end of March when the share price was just below 7p. The shares hit 9.6p earlier this morning, before selling off a little due to the market. That rise imo was driven more by the solid fundamentals of the business, but possibly the buyback helped raise the bid price taking some shares liquidity out?

I know nothing about Whitbread, so cannot comment on that specific example. What happened to the fundamentals/earnings of the business in the years post-buybacks? Did they improve or worsen? Was lack of free cash in the business a factor? Was the Costa disposal a bad decision - done too cheaply - did it harm earnings too much etc?

I think a buyback can be detrimental, if it used by directors just to try to push up a share price short-term (option incentives for example?) when the cash is really better suited to paying down debt, or expanding. That could leave a company in a worse position long-term.

STCM don't have the problem of excessive debt, nor lack of funds for expansion/plant improvements, so I don't see it is a business risk in that sense - it's equivalent to a dividend to me.

You mention about sellers in STCM potentially wanting out and a buyback offering that liquidity - is that not a good thing? Otherwise a big seller can continue to sell down at an ever decreasing share price, with insufficient private investor demand to capitalise, as we've seen recently with SEB, until the tide turned?

I'd rather have a dividend, personally, but as a long-term investor, not averse to a buyback either. Alternatively, the companies cash sits in the bank earning a derisory interest and being eroded by inflation, which is what we are trying to beat by investing here?

Posted at 13/6/2022 17:14 by king suarez
Mathematically speaking, there is no reason why a buy-back should return less to shareholders than a dividend or be detrimental.

The value of the business is the market cap, expressed as share price x no. of shares in issue.

If the business is valued fairly, then reducing shares in issue should lead to a proportionate increase in share price to keep the market cap the same.

What it may signal, for some businesses, is that there is nothing better to do with the cash, which is why I am guessing some businesses do not fare well with buybacks because the BODs cannot likely find areas of growth, hence they may have been businesses destined to decline in value anyway - unless they got into financial difficulty by spending cash buying up shares that should could have been used to pay down debt for example.

In the case of STCM, the company is actively increasing Capex, quite significantly on prior years, in order to both increase production and efficiencies (cost control) whilst simultaneously looking to throw significant excess cash shareholders way.

This is quite an obscure little company, off the radar, so I would hope most invested here understand the business fundamentals fairly well and can see that any potential buyback is not p1ssing money up the wall, but is a more tax efficient way of returning excess funds. An interim solution to the dividend tax issue, that will mean subsequent dividends can be larger, or at least cost the company less cash to pay out due to lower share issuance?

Steppe Cement share price data is direct from the London Stock Exchange
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