Sunday 21 October 2018 | ShareProphets: The one stop source for breaking news, expert analysis, and podcasts on fast-moving AIM and LSE listed shares
Sunday Long Reads: Moving to Chernobyl, The Cruise biz, Living like a Morgan Stanley analyst, Patrick Leigh Fermor, The Bund
Notes from Underground - Cake, will you do the honour of making my stomach the happiest bag of acid in the world?
Africa forestry and agriculture company Obtala (OBT) has updated on the third quarter of its year, including that it has remained focused “on increasing output from our profitable assets in West Africa and improving margins by leveraging our fixed cost base… year to date revenues have now comfortably surpassed that of the full year in 2017 and revenues for the current financial year are expected to exceed US$10m for the first time”…
Africa forestry and agriculture company Obtala (OBT) has announced results for the first half of 2018, emphasising “having grown by more than 13x in 2017, year on year revenues are on track to deliver further growth in 2018 having achieved 80% of 2017's total turnover within the first 6 months” - though, on revenue of $6.6 million, even on an adjusted basis there was still a loss of $3.7 million…
I note the piece from Hotstockrockets which explains part of what Miles Pelham has been up to. Essentially he has been offloading AIM-listed Obtala (OBT) ordinary shares and picking up convertible prefs (which pay 5%).
It is pointed out to us that Miles Pelham, the boss of Obtala (OBT) sold nine million shares on 13 July. Surely this is a massive sell signal for we loyal shareholders? Maybe not. This is how Miles responds to that question:
Obtala (OBT) has updated to the first half of 2018, including emphasising “record volumes of sawn timber produced and containers shipped to customers”…
Obtala (OBT) has announced results for the 2017 calendar year, including emphasising “an increase in year over year revenues of more than 13x, provides clear evidence that the group is unrecognisable from its position just 18 months ago”…
Obtala (OBT) has updated on forestry developments which see it consider “it is clearly prudent for us to minimise risk by deploying financial resources towards expanding capacity at our production facilities in Gabon rather than Mozambique”.
Obtala (OBT) has updated on the first quarter of 2018 – including “invoiced sales of $3.9m, quarterly record exceeded for contracted sales - $8m” and “the setting of new records for timber orders received and for volume of production” – seeing it further “on the path to our most pressing objective, to become cash-flow positive, and towards our longer-term objective of achieving high levels of sustainable profitability”…
In the wake of the recent fund raise by Obtala (OBT), the company's house broker VSA has slashed its price target from 36p to 25p but it is forecasting EPS of 1.6p for calendar 2018 and with massive asset backing, explains in a detailed note out today, why the shares will double from the current 12.625p mid. We own the shares and, for what it is worth, I agree with analyst Edward Hugo.
Obtala (OBT) has announced an offer of shares at 12.5p via PrimaryBid.com - which closes at 5PM on Sunday or when the book is filled. Hurry - TAKE THIS UP HERE This follows an earlier Acquisition, Expansion Capital and Fundraising announcement…
UPDATED: We own these shares and I am a fan of boss Miles Pelham to whom I have just spoken. With this cash and the placing announced earlier this week Obtala will report positive and meaningful EPS this year. Its shares trade at a massive discount to NAV. TAKE UP THIS OFFER. Obtala (OBT) has announced a Fundraise via Primary Bid at a subscription price of 12.5p per Ordinary Share. This represents a discount of approximately 9% to the closing mid price on Thursday 01 February, 2018.
Obtala (OBT) has made a quarterly business update on the fourth quarter of 2017, with Chairman Miles Pelham emphasising “while the result will be a record year of revenue for the group, this merely represents the initial phase of growth for the company. I am excited for what 2018 will bring and fully expect it to be another year of exponential growth for the group”…
Previously writing on Obtala (OBT) we noted its view that “in an environment of low interest rates with investors hunting for yield, there is an outsized opportunity to fund our trading business to many multiples of current revenue and profit levels”. There’s now a “Trade Finance Update”…
We own shares in Obtala (OBT) and think they are cheap so why not give a wider audience to a broker buy note. Okay VSA is the retained broker so it is 100% biased so feel free to ignore it completely. But for what it is worth...
Okay Beaufort is house broker to Obtala (OBT) and so is biased. As we own the shares so am I! But this 60 page report is detailed and so worth a read. Beaufort writes:
African-focused agricultural and forestry company, Obtala (OBT) is an already successful HotStockRockets share tip – the shares up from an initial 8.25p offer price recommendation to a current 18p. However, they’ve been above 22p earlier in the year and recent newsflow sees us further confident that the fall from there an incorrect appraisal - and that 30p+ is realistic.
Obtala (OBT) has announced results for the first half of 2017 and followed this with a quarterly business update…We are more than 100% ahead on this share tip but we are still excited.
VSA is house broker to Obtala (OBT) so is not impartial. Neither am I as we own a small number of shares following a Dragon's Den pitch as the 2017 UK Investor Show. But the price target suggests real upside and VSA's research team is well regarded and since we happily published an uber-negative piece from Evil Banksta the other day, this offers some balance. VSA has tweaked its forecasts
When the cash still hasn’t arrived! Tom Winnifrith gets upset (see) when I write negative comments about Obtala (OBT) and so I’ve kept quiet for a while, but there comes a point when you just have to ask the question: WTF is going on? Since Tom believes in free speech (as well as Obtala) he - as ever - allows me to write here.
Since we previously updated on Obtala (OBT) at the start of this month, there have been developments including a quarterly report. The shares are down but is this fair?
We cannot pretend that we are not a bit angry with Obtala (OBT) for the PR own goal it scored on Friday. The shares closed down 3.5% at 17.5-17.75p and are a buy at up to 20.5p but - as shareholders - we are pissed! The own goal is two fold:
The transformation of Obtala (OBT) under Miles Pelham has continued with the $14.8 million purchase of WoodBois, a leading global trader and producer of sawn timber. Obtala shares, tipped by us at an 8.25p offer and retipped at prices much lower than that now trade at 19.75p-21p but are heading far higher.
Ok, Align is paid to write research and we really do not always agree with what its eccentric boss Richard Jennings says and writes. But as we own a few shares in the company and agree with the thesis we are happy to republish this detailed note.
I am meant to be away from my keyboard as I tackle the big D but find myself dragged back by an Evil Banksta to eal with Obtala (OBT) which has been unfairly slighted on this website. I write as a ( small) shareholder in this company following the Dragon's Den Pitch at UK Investor earlier this month. The evil one published a piece which was, I fear, just factually flawed.
Obtala (OBT) should be a simple business to understand, its website explains that it farms just over 1,700 hectares of land in Tanzania and that it’s transitioning its forestry business to supplying hard wood products from 314,000 hectares of forestry concessions. And yet the group structure, accounts and accounting practices are possibly the most opaque that I’ve seen for an AIM company for quite some time. I’m going to highlight three points that should make the longs very concerned and should tempt the shorts out to play.
VSA is house broker to Obtala (OBT) so its assessment cannot be deemed to be impartial. However since I agree that the shares are cheap I bring you VSA's detailed initiation note below.
We tipped this stock at 8.5p (offer) so are 100% ahead but there is far more to come. Obtala (OBT) has followed a quarterly business update with news that it has entered into a conditional subscription agreement to issue £4 million of new shares at 20p each - with also the same amount of warrants convertible at the same price.
We tipped African Agriculture play Obtala (OBT) at an 8p offer and suggested averaging down at as low as 5p. The shares are now 19.25p-20p after a Q4 trading update yesterday. Goodie goodie.
We tipped Obtala (OBT) at an 8p offer and the shares are now 19p bid which values the company at c$60 million - we use dollars for the sake of convenience. But news after hours yesterday makes the shares still cheap! we spoke to chairman Miles Pelham on Thursday night and this is exciting.
We first tipped this one at an 8.25p offer. But shares in Obtala (OBT) now trade at 15.5p-15.75p on the back of yet more evidence that new boss Miles Pelham really is delivering.
A busy day for followers of Obtala (OBT) on Friday started with interim numbers which really did not look very good. In fact bad is the word that springs to mind. In the 6 months to June 30th sales were £264,000 versus £2.16 million a year earlier and there was a loss of £2.63 million versus a profit of c£3 million. But here's the thing.
It is hard for a management team to admit to errors. It is so much easier for a new management team to admit that an old one goofed and thus Miles Pelham the new boss at Obtala (OBT) has done just that.
Rather than issue shares like confetti as most AIM Companies do and, indeed, as under its former management Obtala (OBT) used to do, this company is raising capital to expand in a non dilutive way.
You may remember that Tom Winnifrith had a chat with the new chairman of Obtala Resources (OBT), Miles Pelham back in late April. Tom caught up with Miles again today for a detailed phone catch up. The key take-aways are:
Miles Pelham had only been in the job a few minutes but pitched up at UK Investor to present on behalf of Obtala resources (OBT). Enjoy
First up, just a note that Obtala Resources (OBT) has confirmed that it has received the cash for selling a small part of its forestry portfolio. That is to say $900,000 is now in the kitty,a third of it two months ahead of schedule. That an AIM Company has to announce that money has arrived as per contract tells us everything you need to know about the state of AIM. Anyhow it is good news.
Following the appointment earlier this week of Miles Pelham as Chairman, Obtala Resources (OBT) has updated on its strategy and outlook, with Pelham emphasising “I am strongly committed to enhancing shareholder value by monetising the substantial capital investment made into our African ventures in recent years”.
Updating earlier this month on Obtala Resources (OBT) with the shares then at 6.375p, we noted the valuation looked to fail to reflect the asset backing and likely news flow but a disappointing share price performance from a now long-running recommendation. It is now boardroom change ahoy.
Obtala Resources (OBT) has announced a quarterly update, including that the “period has been very much focused on business development ahead of harvesting in April on both the timber and the agribusiness as both businesses move from project phase to operational… The sales pipeline is growing and the forthcoming months present themselves as an exciting period for the progress and expansion of our agriculture and timber divisions”.
Obtala Resources (OBT) has announced receipt of further monies from its approximately $3 million forestry investment agreement. Good News
Obtala Resources (OBT) has announced it has entered into agreements to secure an investment of approximately $3 million for its forestry division in return for minority interests and certain off-take rights over specified forest concessions in Mozambique.
John Meyer of SP Angel this morning comments on 600 Group (SIXH), Glencore (GLEN), Metminco (MNC), Obtala Resources (OBT), Kibo Mining (KIBO) and Stellar Diamonds (STEL) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
Obtala Resources (OBT) has announced the signing of heads of terms for a venture in which it will have a 70% interest to develop a commercial farming operation over an additional 1,265 hectares in Tanzania.
If you want me to analyse a stock for you just drop me a line at [email protected] - Today I look at shares in Obtala Resources, Orsu Metals and Plus500, setting share price targets for all three stocks.
While it may be acknowledged that in the recent past the technical position of the Obtala Resources (OBT) share price could be described as nothing more exceptional than a slow burn recovery, the position now at the beginning of November does appear to be more encouraging for the shares than it has in quite some time.
Commenting on last month’s interim results from Obtala Resources (OBT), we noted a potentially further and major catalyst in the company’s Mozambique timber business and it has now announced that, having reviewed how best to crystallise and maximise the inherent value of this business, it has commenced a process to list it as a separately quoted company on AIM during the first quarter of 2016.
We reiterated that we saw continued value in shares in Obtala Resources (OBT) a few weeks ago as the stock overhang cleared - despite a couple of updates from the company since the shares haven’t responded as hoped. Yet...
Obtala Resources (OBT) has been issuing good news after good news release – the latest being a cracking forestry deal. Yet its shares are almost unmoved – at 9.625p today. That is down to one thing alone, the incompetence of Nomad Jefferies.
Having updated in December of its seeking of partners to increase production capacity and expand marketing for its timber concessions, Obtala Resources (OBT) has announced an agreement with Kishugu International Holdings Ltd, which includes a Heads of Terms to form a joint venture for an impending timber-related project in Brazil.
Obtala Resources (OBT) has announced that a call option for 60 million shares it currently holds in Paragon Diamonds (PRG) has been exercised. This follows earlier agreements reached with private equity investment group Titanium Capital to put “new impetus” into Paragon and has helped shares in Obtala more than 10% higher – to 10.75p-11p, capitalising the company at just below £29 million.
Obtala Resources (OBT) gave a detailed presentation on Monday 10th November at the most recent ShareProphets seminar - a video of whicjh is below.
Obtala Resources (OBT) has announced it is to pay just over $1 million for a controlling 72.69% shareholding in five departmental retail outlets within Lesotho in order to advance its vertically integrated strategy. The stores operate as Life’s Comfort Solutions Ltd. This is a cracking deal.
Noting a “transformation into Forestry, Agriculture and Food Processing group”, Obtala Resources (LSE:OBT) has announced results for the first half of the 2014 calendar year and that “we expect our asset base and sales to continue to grow during the second half of the year”.
Shares in Obtala Resources (OBT) have recently nudged higher – to a current 9.75p-10p - on the back of a move to put “new impetus” into investee company Paragon Diamonds (PRG). We are up on this share tip but there is more to go - 50% within a couple of months we reckon.
Obtala Resources (OBT) has announced a £2.28 million net cash outflow before new financing (£0.14 million inflow after) for the 2013 calendar year, ending the year with cash of £2.14 million and updating that “a platform to generate substantial revenues has been put in place, and sales have commenced successfully across all sectors of the business”.
Obtala Resources (OBT) has been a cracking share tip from us but there is far more to come. The market seems to have totally failed to pick up the import of news yesterday. It will.
We tipped AIM listed Obtala Resources (OBT) at an 8.25p offer price on January 6 this year with a 12p to sell target price. Today – following conversations with management – we have increased that target to 15p. Here’s why.
Natural resource investment and development company, Obtala (OBT) has updated investors that work on its forestry business “continues to progress well” as further orders continue to be agreed. that is good news for our readers who bought on this share tip.
Direct from the Queen Elizabeth Conference Centre a video featuring a UK Investor Show 2014 presentation by Simon Rollason of Obtala Resources (OBT)
Obtala Resources (OBT) shares have perked up a bit on two pieces of news to trade at 7-7.5p. That is down on our tip at an 8.25p offer but this is one to average down on. The market cap today is £19 million.
The Opportunity: This Company is a mini conglomerate operating in Africa with exposure to diamonds, agriculture and forestry. It has net cash and is cash generative. The valuation at an 8.5p offer is £21.5 million which fails to discount the cash that this company will be generating. There are a number of news triggers due over the next few months that will drive a material re-rating.
Obtala Resources (OBT) has today announced a deal where it will manage and operate a fruit and vegetable cannery in Lesotho and will get a 70% equity interest in the operation apparently gratis. There are no numbers with the RNS but we have some informed guidance and that suggests the shares are worth a punt.
It seems that the market mood is changing and the next beneficiary could be AIM listed Obtala Resources (OBT) – the hot money is buying and reckons that the shares will rocket from 6.625p in the middle today.
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