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lesson learnt .....again Im keeping my money in my pockets !!!now down to $3.60 ish and on a 10% loss already.
GCL - Gloucester Coal
- Thread starter excalibur
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Gloucester Coal have just announced an on market buyback of 7.5% of the companies shares or $28 million. This may be a trend for profitable coal companies.
I'm certain, in my mind (IMHO), the recovery will come soon in this sector. For this reason, and despite very heavy losses, I've bought more stock. Probably my last buy of GCL, and will sit back and wait now.
The buyback sounds like a good idea to me.
Hopefully they will start real soon. I hope companies like ozl will do the same.
I think you will find they have annual contract prices the similar to iron ore.
They received a record price from the Japanese steel mills they sell to and this lasts until April. The concern at the moment would be if the mills didn't need as much, but the contracts may cover this?
The Australian dollar should really be increasing profits at the moment.
If you check their ASX announcements the contract prices and other info should be in there(although I am not certain on this)
Please do your own research.
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Thermal coal is tanking out of Newcastle, spot price that is, about US$111 per tonne against the US$125 per tonne set on 1st April 2008.
Biggest concern is about semi-hard coking coal which was set at US$300 per tonne, and used in the steel industry. Quality PCI and semi-soft coking, also used in some steel making and sells at lower prices, may soften the harder coke prices.
This is probably why GCL has taken a hammering. Probably well overdone, but there yah goes.
Biggest concern is about semi-hard coking coal which was set at US$300 per tonne, and used in the steel industry. Quality PCI and semi-soft coking, also used in some steel making and sells at lower prices, may soften the harder coke prices.
This is probably why GCL has taken a hammering. Probably well overdone, but there yah goes.
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For a share buyback do you think the company will be either:
- looking to buy as many shares as it can? i.e. pick them up at as low a price as possible, or
- wait for times when the sell side is thin in order to advance the share price for the least possible outlay?
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Gloucester Coal fell only 1 cent on Friday as the company confirmed its share buyback is in progress with a purchase of 100,000 shares on Thursday.
WBC and BTT, despite being only investment funds, have moved to substantial shareholder status.
WBC and BTT, despite being only investment funds, have moved to substantial shareholder status.
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Gloucester Coal trade at $4.60 on a 4.5% yield, a PE of 16.2 and an earnings yield of 6.2% for 2008. The company has low cost mines at Duralie, Bowens Rd N and Rosevil.
Profits are set to jump considerably to their Y/E June 30th 2009. Like all companies in the sector there is uncertainty on prices beyond that date, but the weak Aussie will be helping.
Restrictions at the Newcastle Port caused GCL to switch to shipping more coking coal with a subsequent reduction in thermal sales, in the first quarter 2009. Coking coal sales were up 5% and thermal down 22%.
After the first quarter, YE 2009, stocks rose by 47 million tonnes.
An on market share buyback is underway for 7.5%of the companies quoted stock.
Profits are set to jump considerably to their Y/E June 30th 2009. Like all companies in the sector there is uncertainty on prices beyond that date, but the weak Aussie will be helping.
Restrictions at the Newcastle Port caused GCL to switch to shipping more coking coal with a subsequent reduction in thermal sales, in the first quarter 2009. Coking coal sales were up 5% and thermal down 22%.
After the first quarter, YE 2009, stocks rose by 47 million tonnes.
An on market share buyback is underway for 7.5%of the companies quoted stock.
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How times change on the coal market these days, and the present $3.00 price on a yield of 7% and PE10.4 isn't cheap for the sector at all. However, it could be the sector that's very cheap overall?
Buyback seems to be continuing at a very gradual rate and shares may be worth a punt on possible underscore estimates on the coking coal price.
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The view of analysts on Gloucester Coal Ltd.,
http://markets.ft.com/tearsheets/analysis.asp?s=AU:GCL
http://markets.ft.com/tearsheets/analysis.asp?s=AU:GCL
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Gloucester coal has said they are not going to reduce coal production and will continue with the present share buyback plan.
How long though before the walls of coal pile too high?
How long though before the walls of coal pile too high?
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Considering last year's first half profits were ~$10 million, surely this bodes well for the up-till-now collapsing share price? Any guesses for Monday's price range?
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That's just what it is, a guess. The price of GCL is very cheap but that means nothing in these markets as the stock price itself can bring a company to its knees.
Coking coal is set to plummit in price and it can't be used as thermal, only semi-soft coke and PCI coal can.
Markets seem to think these medium sized coalers should be on a yield of 7% with a dividend certain to be maintained or increased. Any severe wobble in coal sales and GCL may dip further.
Meanwhile all eyes are on this buyback, because if it stops the company is worried about future profitability.
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Gloucester Coal have been cheered by announcements of a 500,000 tonne, locked in, above average price for thermal coal for 2009/10. Further agreements are also in place.
GCL Quarterly out today, and fairly impressive for this smaller coal miner:
* 1mt thermal coal contracts locked in for 2009/10
* 21% increase in sales for December quarter the year before
* Thermal replacing reduced demand for coking.
* 6 month NPAT to 31st December = upper end of guidance $44m (record)
* Debt free and $25m cash backing.
Looking pretty good to deliver close somewhere near a 8-10% fully franked yield. Obvious downside in next 6-12 months in terms of profit, however seems to have been thrown out with the bathwater.
* 1mt thermal coal contracts locked in for 2009/10
* 21% increase in sales for December quarter the year before
* Thermal replacing reduced demand for coking.
* 6 month NPAT to 31st December = upper end of guidance $44m (record)
* Debt free and $25m cash backing.
Looking pretty good to deliver close somewhere near a 8-10% fully franked yield. Obvious downside in next 6-12 months in terms of profit, however seems to have been thrown out with the bathwater.
michael_selway
Coal & Phosphate, thats it!
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Yep its amazing how they can easily switch to producing more thermal coal and less coking coal
Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 28.7 111.3 101.0 103.9
DPS 21.0 40.0 51.0 57.0
