Sylvania Platinum Share Discussion Threads

[redtrend] 10/9/2018 09:55

That's quite some revisionism there Plat:

1) When did you call the top, which I assume you mean interim top? Is it your off the cuff "liberum's kiss of death" post above? If so fair play. The top for now appears to be on 4-Sept at 23.5p (23-24 bid). On 6-Sept on your post, SLP was already down to 22.5p, now at 21.5p.

2) 16%? How did you get to that?! The top was 23.5p and it's now at 21.5p, a 8.5% decrease. Unless it was for a micro-second I didn't see the buy price ever breach 24p.

We had many disputes on the JLP thread, however none of which was with regard to you calling the SLP top or me disputing nothing goes up in straight lines. On the latter I completely agree with you regarding nothing goes up in straight lines, long-term it's not healthy.

To the extent that in space of a month SLP had gone from 17p to 23.5p (38%). This was too fast for my liking and when a friend asked my advice, I told him for now "wait and see" if it goes back below 20p in short-term as there may be a better entry point.

Could that entry point be 18p? Possibly although to get back down to a buy price of 18p, I think we may have to see PGM basket price continue to creep down or the sentiment in miners as a whole continue to stagnate/ worsen taking all down with it.

If it went down to a buy bid of 18p I would also buy some more. Although I have a substantial holding in SLP already and HUM is also looking attractive. For very short-term trade CEY and ACA are also looking interesting. For fundamental reasons they're down more than other goldies, but looks overdone in short-term.

[plat hunter] 10/9/2018 09:06

over 16% down since i called the top Redtrend..Good company no disputing that more the point i made the other day...Nothing goes up straight lines.

I buy on the way down and I'm looking at 18p for an initial entry here

[plat hunter] 06/9/2018 15:48

Liberum's kiss of death

[slopsjon2] 05/9/2018 23:42

£25 for Research Tree £90 for sharepad/sharescope £25 for Stockopedia and you still have to go somewhere else to get news :-(

[death by donut] 05/9/2018 22:06

Stockmarket wire show it.09:20Broker Forecast - Liberum Capital issues a broker note on Sylvania Platinum LtdLiberum Capital today reaffirms its buy investment rating on Sylvania Platinum Ltd (LON:SLP) and raised its price target to 30p (from 26p). Story provided by StockMarketWire.com Broker Forecasts...

[slopsjon2] 05/9/2018 17:44

Where did you get that from, nothing on Research Tree?

[mfhmfh] 05/9/2018 15:38

Liberium Capital today reiterates buy rating and increases target price to 30p (from 26p).

[plat hunter] 31/8/2018 10:27

Thanks Red and decent point cflather.. thank you

[cflather2000] 31/8/2018 10:24

I don't think the company needs to hedge, to be honest.We're naturally hedged if cash is in ZAR.If ZAR is stronger against the dollar, the cash held is worth more.If the ZAR weakened against the dollar, the costs relative to basket price decrease.Therefore holding cash is ZAR provides a basic hedge

[redtrend] 31/8/2018 09:17

No worries Plat and nope they currently do not hedge. As per Accounts:

"The Group’s senior management oversees the management of financial risks. The Board ensures that the Group’s financial risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with Group policies and the Group’s risk appetite. It is the Group’s policy that no trading in derivatives for speculative purposes shall be undertaken. At this stage, the Group does not currently apply any form of hedge accounting"

[plat hunter] 31/8/2018 08:27

Apologies for my somewhat naive questions... It's often easier to find these little bits of info out on the BB, other than going trawling through loads of stuff as a newbie.

[plat hunter] 31/8/2018 08:26

Okay interesting.. I would have thought and expected them to have some kind of hedge against currency volatility. Is this not the case then?

It is pretty inexpensive to do, considering how much EM currencies can move around

[redtrend] 30/8/2018 20:12

Plat - true, although with Project Echo I believe for now they hold the majority in ZAR. This showed when the SA Rand took a big hit in Q2 2018 and so did SLP's cash balance in USD terms, which shows the lion's share is likely still in ZAR.

No doubt as Capex requirements reduce, more cash will be kept in USD.

[plat hunter] 30/8/2018 19:57

Thank you for your insight Redtrend... I'm sure they'll have USD account too for the cash though :-P

[redtrend] 30/8/2018 19:30

Been on holiday and nice news to come back to – a solid set of Accounts as expected, with a nice modest dividend. The board and management have done a great job to date and whilst I don’t fully agree with all the statements in the Accounts concerning how the dividend policy may be updated and implemented (I believe some are overly conservative), the management and company as a whole is to be commended.

On the positives:

1) Dividend
- It’s reassuring that Board & Management listen to its shareholders (I know this is a bizarre statement to make, but sure we are all used to companies just doing what they want irrespective of the shareholders who own the company). Whilst I believe a dividend would have been put in place in any event, the trigger appears to be from an individual shareholder with a sizeable holding. Whether this was an Institutional Investor or PI with large holding not too sure, but it just goes to show when you invest in a relatively small company, we all need to make our voices heard and write to company when we see fit. Not just negatives or demands for dividend, but recognising the positives too.

- Maiden dividend of 1.6% at 22p and dividends to be sustained going forward. I just hope over the space of a year, there are at least 2 dividends and therefore the yield per annum is more like 4%, increasing further as the cash balance continues to rise.


2) Production:
- Production of 76,000 to 78,000 this financial year ending June 2019
- Production of 80,000+ thereafter (see latest presentation released with Accounts, slide 15). In fact year ending June 2020 looks like production est. at 85,000.


3) Cash and Trade Balance:
- Cash of $14m end of June 18, so likely at least $17m by end of Q3 18.
- Trade balance in SLP’s favour of a whopping $19.8m (Trade Receivables of $25.4m, high due to the 4-month cycle of delay when SLP gets paid by refiners, minus Trade payables of $5.7m).
- These two together of $33.8m equate to 40% of the current market cap at 22p.


4) Going Forward: Capex, Costs and Margin
- Basket Sale price: currently at a robust $1,035
- Cash cost of ZAR 6,849 (pg.19 of last presentation, not dissimilar to last quarter results), or $475 per Oz (at Forex of 14.4).
- Margin: based on above, produces a huge margin of $560 per Oz. Taking this year as example, $560 x 76,000 Oz = $42.6million
- Capex: with Capex est. at $12m this year, that means free cashflow of $30million (before Tax), compared to current market cap of $83.2m. For this reason, plus the dividend, cash/ trade balance and solid management shows just how under-valued SLP still is. It should also be noted Capex for year ending June 2020 is also est. around $11m, then drops to only $3.5m and $3m in following years.


On top of all of this, there are just shy of 5million of shares in Treasury to be cancelled and Institutional Investors of over 50%, who no doubt will have a large say on dividend policy going forward, to ensure its in the shareholders interests.

It is for the reasons above I don’t necessarily agree with some of the conservative statements in the Accounts on the dividend, however I’m sure over time the Board + management will increase dividends considerably if they maintain the $12m cash buffer they want and cash above that goes to dividends, unless there are growth opportunities to get after. Additionally and perversely, there is a risk associated with holding too much cash at the bank. Whilst it pays 7% interest, the SA political risks also have an impact on the SA Rand (ZAR).

So SLP should continue to outpace its peers in terms of share price appreciation + dividends.

[plat hunter] 30/8/2018 18:29

Long term JLP... but have been watching SLp with envious eyes for some time.

Market cap is only 56m here, what are peoples thoughts on that?

[henchard] 30/8/2018 16:58

Looks like largely positive coverage since the results:

Liberum buy reiteration 28th

28th

today

Shame about the platinum price.

Management statements seem downbeat on this front:

"We remain extremely concerned"

"At this stage, I do not foresee a recovery going forward"

etc

[snorky123] 30/8/2018 16:41

I assume an IC update came out at midday looking at trades, anyone have the article?

[mirabeau] 30/8/2018 12:05

ST update just now - conclusion :-


'Still only priced on a modest cash-adjusted PE ratio of 6.5, I feel a target price of 28p to 30p (equating to a cash-adjusted PE ratio of 8.5 for the year just ended) is a more reasonable valuation. Buy.'

[russman] 29/8/2018 12:29

Not sure why they need a dividend policy.
SLP need a capital management policy.
Not sure why SLP needs 14m cash float.
Lot of spare in trade receivables; if they pay.

[trendspotting] 29/8/2018 07:33

link to new broker target please?

[nickwild] 28/8/2018 16:07

Sylvania Platinum: Liberum reiterates buy with a target price of 26p.

[trendspotting] 28/8/2018 14:22

If you look at the volume and weight of trades combined with the momentum over the last few months, this should now move well north of 30p on this news. We are in the process of creating a new high here. Lock and load and watch it go.

[thorpematt] 28/8/2018 11:19

Some resistance at 25p and 30p


Fair value is north of both of those I think it's fair to say.