That is better than I expected. The falling SP had me worried for more bad news to come but obviously trend-following investing has it´s merits for some time - until the value investors get the upper hand and maybe even get a reverse trend started (which might be fueled by somer shorters caught short).
Entering the data into my track of quarterlies it suggests a turnover north of 1 billion AUD fpr FY 2021/2022, a profit before tax well north of 100 million AUD and an EPS of around 12ct/share.Below prior years but better than I expected after Q3. Also the net negative value of the hedge book decreased by around 23 million AUD in FY 2021/2022, so I expect an actual increase of substance value of the company of above 100 million after taxes. The negative values of the hedge book came down from 388 million AUD at end of FY 2019/2020 to 253 million AUD at end of FY 2020/2021 to now 230 million AUD. I have to agree witth those though who argued to balance the hedge book in one stroke; given my expectations for gop and inflation IMO this is still a favourable choice (even if it costs 230 million AUD now).
Price to book ratio is 0.76. Taking into account the negative value of the hedges it is still well below 1. I do not foresee a ROI that would not be able to repay the investments that were made. Falling short of a massively falling gop that is not going tohappen.
As to my holding I am still almost 20% in the red but still holding 71k shares in the expectation that 1) the investments made in these past 18 months (Tropicana, underground etc.) will pay off with a good ROI, 2) that gop will trend north in reaction to inflation and an investment need for a value store in an overall recession-prone environment 3) McP ist still a viable project and 4) any investments made will pay off and a price to book ratio of sub 1 is not justified (some of that depending on (3) though).
So all in all a very good day for those who stayed and those who hopped on at this long-term spectacular lows in the last week. IMO the SP is still so low as to be better off to buy than to sell but I have already hung enough into my position and am happy to hold that for a while.
GLTAH
RRL Price at posting:
$1.61 Sentiment: Buy Disclosure: Held
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