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ABC - Adbri Limited

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ABC @ 1.55
Another raise in capital cost estimate for Kwinana plant. Is it mostly priced in? And will they need to float more shares at a depressed price?
Gap down open since filled, volume moderate. Reaction seems quite mild so far?
Price still well above the 1.34 Oct '22 low

Not Held

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read that and lobbed in a small order @ $1.45 ( to add more )

..a cap. raise you think ??

maybe i will lower that order , surely they will have to go below $1.50 to get some bites

cheers
 
@divs4ever : no idea myself if there'll be a capital raise, just a cautionary note I added because I'll be trying to find out the likelihood of it against the backdrop of higher Kwinana project costs.
 
finicky said:
@divs4ever : no idea myself if there'll be a capital raise, just a cautionary note I added because I'll be trying to find out the likelihood of it against the backdrop of higher Kwinana project costs.
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they have a series of stumbles over the last 11 years , another cost blowout

a reasonable guess to factor in , in my opinion

cheers
 
Bid in for 2,000 @ $1.60
It's trading at about 1.8 x book value whennthe median ROE for the last four years to 2022 is 9.4%.
Have to discount something notional for debt level I guess.
I don't know what happened for profitability to slump after fy18 (it accounts in the calendar year, i.e rules off end of Dec) but the 5 years prior to fy19 its median ROE was about 15%. It's BV hasn't gone anywhere much over 9 years but creeping ahead. Share issuance very steady, haven't looked to see if they issued any shares to part funď the Kwinana redevelopment. Paying a ff dividend the norm although I think suspended currently.

Chart could be argued a chance as bottoming in Oct '22. Since then has range traded a notch higher for 7 months. Worth a spin for me for a value stock with a solid business.

DAILY
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i have an order in ( for extras ) around $1.35 i certainly won't be holding my breath to get filled but at least currently i am willing to add if the price is low.

am still thinking it will get bashed , if a major construction downturn .. but will we have that downturn
 
Filled that today. I made another slip when I said trading at 1.8 X BV, it's actually 0.8 X BV.
If I'm wrong about the chart I'll probably top up when it looks auspicious again.
That's three nice solid value stocks I've added lately at very depressed prices, seeking the turnaround: GWA, GUD, ABC

Held
 
finicky said:
Share issuance very steady, haven't looked to see if they issued any shares to part funď the Kwinana redevelopment. Paying a ff dividend the norm although I think suspended currently.
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I have ABC for many years, i cannot remember them ever raising capital / issuing shares, not even dividend reinvestment
 
ABC up 13% by luncheon
Upbeat AGM address from the new m.d (ABC reports calendar year)
No guidance due to wider economy uncertainty but almost all their divisions sparking cf the same period in 2022
"underlying Net Profit After Tax for the period ending April 2023 is significantly above January to
April 2022."
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Concern that they might need to issue more shares to fund Kwinana upgrade is pretty much put to rest.
"The additional capital expenditure requirements for the Kwinana Upgrade will
be funded from operating cash and debt facilities, within our banking covenants.
We have also recently entered into a $100 million structured asset financing
facility as we move to a lease model for plant and equipment."
Click to expand...

DAILY
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ABC @ 2.60

Significant looking ST breakout move today for Adbri? Albeit on the usual low key volume.
I feel it's worth something like $4, maybe a bit less, if it can demonstrate a likely return to the profitability of recent years, let alone when it was earning 15% ROE.
Reported 1H last year on August 22 - ABC's financial year is calendar.

Held

DAILY
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Surprisingly negative reaction to the H1report out. Can't see anything wrong with it from my superficial take.
I could guess I suppose that some entity doesn't like the dividend suspension, or maybe it's just that the 3 month rally leading up to this result has got tired and the momentum overbought.

Held

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finicky said:
Surprisingly negative reaction to the H1report out. Can't see anything wrong with it from my superficial take.
I could guess I suppose that some entity doesn't like the dividend suspension, or maybe it's just that the 3 month rally leading up to this result has got tired and the momentum overbought.

Held

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thanks for the heads up , but just put the spare cash into FEX so won't be able to top up ABC today

maybe withholding the div. the kicker , and punters thinking a cost blow-out at Kwinana
 
Partially filled order for 2,000 more ABC @ 2.27

Kwinana and fy23 (Dec end) earnings updates looks good.
At the low end ebitda guidance (end Dec fy) of $310m i get a market cap/ ebitda multiple of 5x.
Going by general comments I've read over the years that's a fair to cheap multiple? And it doesn't take into account the efficiencies that Adbri will derive from the Kwinana plant upgrade which begins commissioning some time late Q2 2024 according to the company. One efficiency will be energy consumption, with ABC predicting 20% emission reduction.
Price to book would be around x1.2 for a company that hasn't scored a ROE less than 9% for the last 3 years and I have hopes it can return to a higher historical range in better times and with the leverage of an upgraded Kwinana. Rising debt for the capital investment in Kwinana will remain an issue for some.

Held

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DAILY
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Prophetic that's what I am, prophetic.
I saw this all along.
I own 4,000 shares but haven't given the board the green light yet.

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hmmmm

another take-over

my av. SP is a little under $2.18 i suppose i should be laughing

back on the pavement with another handful of cash ( or so it seems )
 
Adbri enters into Scheme Implementation Deed

• Adbri has entered into a Scheme Implementation Deed with CRH under which CRH will acquire all of the issued shares in Adbri that the Barro Group does not currently own by way of a Scheme of Arrangement
• Under the Scheme, Independent Shareholders will receive $3.20 per Adbri Share in cash, which represents a 41% premium to Adbri’s undisturbed closing price on 15 December 2023
• Adbri’s Independent Directors unanimously recommend shareholders vote in favour of the Scheme1
Adbri Limited (ASX: ABC) (Adbri) advises that it has entered into a Scheme Implementation Deed (SID) with CRH ANZ Pty Ltd (CRH) and CRH plc for the acquisition by CRH of all of the issued shares in Adbri that Barro Group Pty Ltd and its associates (Barro Group) does not currently own (the holders of those shares being the Independent Shareholders) for $3.20 in cash per Adbri Share (scheme consideration), pursuant to a Scheme of Arrangement (Scheme).
Overview of the Scheme Consideration The scheme consideration implies an equity value on a 100% fully diluted basis of approximately $2.1 billion and represents:
• a 41.0% premium to Adbri’s undisturbed closing price of $2.27 per share on 15 December 2023 (being the last trading day before the potential transaction with CRH was announced);
• a 51.9% premium to Adbri’s one-month volume weighted average price (VWAP) of $2.11 per share up to and including 15 December 2023; and
• a 56.2% premium to Adbri’s three-month VWAP of $2.05 per share up to and including 15 December 2023.

Adbri Independent Directors unanimously recommend the Scheme Adbri’s Independent Board Committee (“IBC”), comprised of Adbri’s Independent Non-executive Directors, unanimously recommend Independent Shareholders vote in favour of the Scheme in the absence of a Superior Proposal and subject to the Independent Expert concluding that the Scheme is in the best interests of Independent Shareholders.
Subject to the same qualifications, each IBC member intends to vote, or procure the voting of, all Adbri shares they hold or control in favour of the Scheme at the Scheme Meeting.
Adbri Lead Independent Director, Samantha Hogg, said, “With the objective of maximising value for the Independent Shareholders, the IBC has negotiated binding transaction documentation with CRH following completion of its confirmatory due diligence.
The Adbri independent directors are unanimous in their view that the Scheme will provide an attractive value outcome for Independent Shareholders if implemented.
” Key conditions and terms A full copy of the SID, which sets out all the conditions and other terms relating to the Scheme, is attached to this announcement. The implementation of the Scheme is subject to certain conditions, including:
• Court and Foreign Investment Review Board (“FIRB”) approval;
• Adbri Independent Shareholders approving the scheme at a shareholder meeting;
• an Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of Independent Shareholders; and
• other customary conditions, including no prescribed occurrence and no material adverse change in respect of Adbri. The Scheme is not subject to any financing condition. 1
In the absence of a Superior Proposal and subject to the Independent Expert concluding and continuing to conclude that the proposed transaction is in the best interests of Adbri’s Independent Shareholders The SID contains customary exclusivity obligations on Adbri, including a “no shop”, “no talk” and “no due diligence” obligation, which contains a fiduciary carve-out.
Adbri is also bound by other customary provisions including a notification and matching right in the event of a competing proposal.
The SID includes certain circumstances in which a break fee of approximately AU$21 million2 would be payable to CRH, or reverse break fee of approximately AU$21 million2 would be payable to Adbri.
Additionally, the SID prohibits Adbri from paying dividends. Indicative timetable and next steps Adbri Independent Shareholders do not need to take any action at this stage.
As outlined above, the Scheme is subject to a number of conditions, including approval of Independent Shareholders at a Scheme Meeting. Adbri will prepare and send a Scheme Booklet to Adbri Independent Shareholders in due course.
The Scheme Booklet will contain additional information relating to Adbri, CRH and the proposed transaction and will include an Independent Expert Report on whether the Scheme is in the best interests of Independent Shareholders.
The IBC will appoint an Independent Expert in due course.
Adbri Independent Shareholders will then have an opportunity to vote on the Scheme at a shareholders meeting, which is currently expected to be held in late May or June 2024. To support Adbri shareholders with questions in the lead up to the Scheme Meeting, Adbri will establish a dedicated Shareholder Information Line.
Details of the Shareholder Information Line will be published on the Adbri website within the next seven days. If the Scheme is approved by Adbri Independent Shareholders and all other conditions precedent are satisfied or waived, the Scheme is currently expected to be implemented in June 2024.
The actual timing of implementation of the Scheme will depend on receipt of regulatory approvals.
Adbri has engaged Barrenjoey and J.P. Morgan as its financial advisers and Herbert Smith Freehills as its legal adviser.

-ENDS

Authorised for release by the Board.

i hold ABC
 
Adbri @ 3.14 up 2% on a good FY23 result (FY ends 31 Dec).

Guess it's pretty irrelevant now with the likely takeover?
Revenue for all its products up strongly: cement, lime, 'cementious products', masonry, aggregates.
No dividend as cash directed to completion of Kwinana upgrade.
Guiding for similar result in FY24.
Why is the board endorsing the takeover?
Delivering it into foreign ownership: CRH is registered in Ireland and headquartered in Dublin, Ireland.

Held
 
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well CRH are a major shareholder , but some boards are like that , ready to jump at any offer ( maybe they know something extra about ABC 12 months down the track )

held ( but not for long i suspect

the hint might be no special div. to disperse any franking credits
 
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