As such it has come up for review with an expectation that I may sell.
I am not overly impressed by THS management. They seem to spend a lot of time promoting the company. I would prefer a company that can deliver results and let the results speak for themselves. Also the FD seems to obtain and then exercise options with regularity. He then sells the shares. An FD who does not hold the shares is not an FD that builds confidence.
My misgivings over the FD were made worse by the short form 1/2 year results that were put out on the 27th May 2021. These were IMHO headline reporting at its worse. The company has a lot of good things to say and these are in the fuller report that can be obtained, though not as easily as it should be.
Looking at these figures the company made in the last few half years; (post tax);
£9m H1 2020
£33m H2 2020
£58m H1 2021
and Q3 production is ahead of Q3 2020 and the pricing of the commodities being mined remains high.
Given the above it does not seem hard to suggest that a profit in excess of £100m is available and potentially could be well beaten. Cash generation and the repayment of debt does suggest that this profit is real and not an accounting result.
Given an ability to make £100m I do think that the £300 mkt cap is low. Debt is $43m, but cash is $73m at the 1/2 year. EPV is on 2020 results circa £800m.
I do think there is a location discount, particularly now for South Africa, and I do think there is a management discount.
But on consideration I continue to see this as an undervalued opportunity and have added a small amount and reset my alert level.
However it is always unwise to assume you are right and the market wrong so further communications from the company may lead to a quick revision of my position.