Sylvania Platinum Share Discussion Threads

[husbod] 30/7/2019 09:37

I seem to recall that without dividend reinvestment the return on shares over the last few decades would be uncomfortably close to zero!

[spann_703] 30/7/2019 09:33

I thought Modigliani argued that dividends were in fact irrelevant, and that we investors should not concern ourselves with such trifling matters [not something I agree with!].

[russman] 30/7/2019 08:15

I could bore you with Modigliani's thesis on dividends.
Let's just say it is a good sign if dividends increase (over time)i.e progressive.

[cf456] 29/7/2019 12:45

"So, with the company set to release a bumper set of annual results at the end of August, this looks like a timely buying opportunity given that the target price of 40p I outlined when I covered Sylvania’s third quarter results (‘Bargain shares: small-cap buying opportunities’, 7 May 2019) is now looking very conservative. In fact, I am raising my fair value target to 50p. Strong buy."

[plootocrat] 29/7/2019 08:53

Is there a reason why SLP don't publish a precise date for release of quarterly figures rather than just "July"?

[redtrend] 29/7/2019 08:25

Russman - tend to agree it is rather nebulous. I understand wanting a certain degree of flexibility, however:

a) Many of the dividend policy statements are just standard "par of the course"

b) Many aren't even applicable - SLP has no debt so should form no basis in decision-making of dividend.

c) In my opinion one big factor is somewhat of a "red herring". The whole piece about "Liquidity and forecast cash requirements" which focuses on the "four-month working capital cycle" is already baked in to SLP's numbers. They hold a huge Trade Account surplus (receivables minus payables) because of this (some $20M). It simply rolls over. They would only need more cash on sidelines as contingency if the refiner changed payment terms from 4 months to 5 months, for example.

d) Capex is now significantly reduced, Project Echo is nearing completion. In fact as of end March 2019 ZAR 124M of ZAR 175M was spent, so only circa $3.6M to go (will be much less when we see Capex for this last Quarter). So with free cashflow increasing as Capex reduces, already the policy needs to be updated to reflect this.

The "par of the course" statements all reflect arguments of why a conservative approach must be taken, however there's no acknowledgement of when market factors benefit SLP and thus the dividend.


For example the statement on Forex USD-ZAR is all fair, however on the flipside Forex has been incredibly beneficial at present to SLP for confirming the argument of a larger dividend:

- ZAR is weak against the dollar. Long-term Eskom issues in SA may continue to pressure the ZAR down, so SLP being conservative and defensive in nature, should be holding the majority of funds in USD.

- GBP is extremely weak in relation to USD. So for this year at a 1.24 Forex rate, the USD funds can be converted to GBP and produce a very large dividend yield (in consideration the share price is of course in £ and therefore dividend % will be a factor of this).


By end of Sept 2019 quarter, I could see at least a cash position of $30M. There is no reason SLP has given us as to why they would possibly need a cash position of over $20M, so arguably at least $10M could be a dividend, which at Forex of 1.24 equates to 8-9% yield.

Even a cash position of $20M is overly conservative, unless they are clearer on growth plans.

However unless shareholders speak up, the board may continue to be overly conservative.

[snorky123] 29/7/2019 06:57

Quarterly figures today?

[russman] 27/7/2019 08:48

Found "dividend policy" under corporate governance on the website.
It is exactly the same as the dividend guidelines.
It is nebular to say the least.
Not worth having; BoD can do what they like with the cash.
Which is worse:-
Ignoring the old policy until castigated.
Or
Re-writing a new vague meaningless policy.

[frazboy] 26/7/2019 09:54

It's at the end of the last investors presentation

[russman] 26/7/2019 08:50

In the last Chairman's statement the dividend policy was being re-written. But I cannot find it. Anyone seen it?

[redtrend] 25/7/2019 12:26

Confusingly you are actually both right.

On a day to day basis, I also use Danger's breakdown as per post 1297. My 1 caveat is that a lot of websites appear to get the Rhodium Spot Price incorrect/ delayed. Rhodium is currently just above $3,500, so I actually get a basket price of $1,360.

hxxps://apps.catalysts.basf.com/apps/eibprices/mp/
hxxp://www.platinum.matthey.com/prices/price-tables

In terms of why I believe SLP Quarterly Reports show a higher basket price achieved than spot prices, this is because SLP have "6E by-products" (Iridium and Ruthenium) which when reporting production Oz on a "4E basis" (Plat, Pall, Rhod & Gold) only, the revenues from 6E needs to be taken into account in the high level basket price reporting figure.

Additionally when PGMs are in high demand, the refiner and thus SLP may also achieve a premium above spot prices.

If the next quarterly report is good (that will be released by 31st July), think how good the July-Sept 2019 Q report could be if SLP 4E PGM spot Basket Price stays above $1,360+. That could mean SLP achieve a basket price of $1,400+. Quite a bit of news now in next 3 months:

- Q4 2019 (FYE Jun 2019) Report by 31 July
- Accounts FYE Jun 2019 (usually released end August), perhaps with details on dividend for 2019?
- AGM announcement October with details on dividend if not already provided in Accounts.
- Q1 2020 Report (Jul-Sept Q) end of October
- Dividend in November

[frazboy] 25/7/2019 11:54

Dangersimpson - I previously tried to reconcile the 4E basket quoted in the results with the price and relative percentages of the basket... and I failed. I need to revisit this with more data (as opposed to the single quarter/year) I analysed. Regardless it should be a cracking quarter

[canigou2] 25/7/2019 11:45

With the spot price for platinum group metals now improving the next set of results should be nice reading.

Dates to look out for:
- Q2 results are due at the end of July (next week)
- EOY results are due at the end of August

I really hope (expect) SLP to maintain and improve their dividend pay out with their increasing cash pile. Is this about to come out from under the radar?

[dangersimpson2] 25/7/2019 11:34

probably. I'm taking the numbers form Feb that are in the latest SLp presentation on their website:

Pt = $811/oz; Pd = $1,381/oz; Rh = $2,353; Au = $1,312/oz; (4E PGM Basket = $1,139/oz)


Feb Spot %Platinum 811 881 62.7%Palladium 1381 1537 24.5%Rhodium 2353 3270 12.6%Gold 1312 1424 0.3% 4E Basket 1147 1345 17%

[frazboy] 25/7/2019 11:25

Wasn't the basket price about $1380 in Q3? Or are we talking about different baskets?

[dangersimpson2] 25/7/2019 11:18

SLP must be raking it in at current spot levels. I make their 4E basket now around $1345, up 17% from Q3.

This won't yet be reflected in the Q4 and therefore FY numbers but looking forward if these sort of spot prices hold and they don't get any major production issues, FY20 should show c£35m EBITDA vs a current EV somewhere around £75m.

[snorky123] 23/7/2019 09:51

Appears to be limited stock in market

[snorky123] 23/7/2019 09:19

Buying ahead of quarterly results

[leopoldalcox] 13/7/2019 11:33

I've never seen a clear divi policy. Would hope that the board give some indication of that at some point soon.I think stockopedia is based on broker forecasts

[spann_703] 13/7/2019 09:34

Agree Russman, it's a good point.

Is there any clear dividend policy here? Stockopedia has a couple of estimates equating to dividend yields of ~4% 2019, ~4.8% 2020 but I have no idea as to their accuracy.

[russman] 13/7/2019 07:14

If the BoD communicated more clearly what the company intended to do with all its cash; SLPs valuation i.e share price may be higher.

[plat hunter] 06/7/2019 11:22

It's the same story across across all resource stocks on AIM, it's symptomatic of the stage of the cycle we're in atm I think.

All the bog boys benefit first and then the allocations start to trickle down to smaller resource stock as the value trade of the bigger boys dilutes to price perfection.

[thorpematt] 06/7/2019 11:17

Despite global trade concerns, commodity prices have been very favourable since the last TS. Yet the share price here has been lacklustre. Pd and Rd have both done significantly well. Unless SLP has failed dramatically to hit its production levels
a positive update should ensue.

Although the financial calendar is a litttle non-commited for SLP, I anticipated a notice of results shortly,with a TS at the end of July and results end of August. I have taken advantage of the weak price of late and topped up on my position over the last few days.

[mfhmfh] 24/6/2019 10:07

Hopefully we can hit that Q4 target and be on our way.