| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Thungela Resources delivered a strong operational recovery in 1H26, with Ensham rebounding from geological challenges and South African production maintained despite mine closures. Export saleable production rose 6% to 8.48Mt while adjusted EBITDA nearly doubled to R1.32bn. However, statutory profit of R1.39bn was flattered by a R1bn non-cash gain from the Kleinkopje disposal, and adjusted operating free cash flow of R1.89bn benefited materially from R1.1bn in FX derivatives and working capital movements. The core mining result was less spectacular than headlines suggest. Transnet rail performance improved to 59.9Mt annualised, a meaningful development for export capacity. The company retained R6.1bn net cash and declared a R5.50 interim dividend, its tenth consecutive distribution since listing. At 525p, the £738m market capitalisation implies a £480m enterprise value after deducting net cash. The valuation appears to treat temporary operational problems, cyclical coal prices and eventual structural decline as arriving simultaneously. The thesis requires coal demand to decline more slowly than supply, with resulting cash reaching shareholders before mines deplete. The 1H26 results validate that transitional problems were indeed transitional, though risks around rail reliability, currency headwinds, realised-price discounts and management's capital allocation intentions remain.
Thungela is a cash-rich thermal coal incumbent protected by formidable barriers to entry in an industry where new supply is exceptionally difficult to finance, existing reserves continue to deplete, and customers still need dispatchable power despite the energy transition progressing more slowly than many expected.
The second half must demonstrate that South African production can deliver its expected seasonal recovery, Zibulo's transitional problems genuinely are transitional, Ensham's realised-price discount narrows as fixed-price contracts wash through, improved rail performance is sustained, underlying mine-generated cash flow strengthens, and surplus capital reaches shareholders rather than disappearing into vanity acquisitions. The market still appears sceptical that TGA can convert even a reasonable portion of its remaining resources into distributable shareholder cash, despite having already returned more than R23bn since listing, retained a substantial net cash balance, extended important mine lives and diversified into Australia. The valuation is treating temporary operational problems, cyclical coal prices and eventual structural decline as though they were all arriving simultaneously, when they aren't.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 21 2026 | 2026 Q2 | TGA.L | Australia, commodities, dividends, Mining, South Africa, Thermal Coal, value | - | Thungela's 1H26 results validated the operational recovery thesis: Ensham rebounded strongly, South African production held steady, rail performance improved and the company retained R6.1bn net cash while paying its tenth consecutive dividend. Statutory profit was flattered by non-cash gains and cash flow benefited from derivatives, but the core mining business recovered as expected. At 525p the market treats all risks as arriving simultaneously when they aren't. |
| Apr 15 2026 | 2026 Q1 | RWA.L | Japan, small caps, Staffing, United Kingdom, value | RWA.L | Robert Walters trades at £60m market cap versus £116m NAV, offering £20m downside protection for a business capable of £40m annual profits. Sequential improvement evident with Japan returning to 13% growth, UK stabilizing, and operational leverage from 10% headcount reduction while productivity rises 9%. March's 5% growth suggests profitability inflection point reached. |
| Jan 2 2026 | 2025 Q4 | ANIC.L, AUGM.L, BSRT.L, CGEO.L, DEC.L, DGI9.L, FAIR.L, IPO.L, KZG.L, PINE.L, POW.L, PTAL.L, TCAP.L, TMT.L | Biotechnology, Discounts, energy, Fintech, Mining, small caps, United Kingdom, value |
CGEO LN ANIC LN FAIR LN DEC LN PTAL CN IPO LN POW LN TMT LN AUGM LN KZG LN |
UK small cap value investor achieved 13% total return on 2024 picks despite mixed individual performance. Portfolio spans mining, energy, biotech, and fintech companies trading at significant NAV discounts. Georgia Capital delivered 159% gains while Digital 9 Infrastructure fell 69%. Manager maintains conviction in all holdings for 2026, expecting value realization through buybacks, IPOs, and operational improvements. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
Thermal CoalThungela operates in the seaborne export thermal coal market with operations in South Africa and Australia. The manager views coal as a commodity facing long-term substitution threats from renewables but protected by formidable barriers to entry as banks and investors refuse to fund new thermal coal developments. The energy transition may reduce coal's terminal value but also discourages investment needed to replace declining supply, creating a paradox where reputational weakness becomes a competitive advantage. |
Coal Energy Transition Barriers to Entry Commodity Substitution |
Mining ServicesTransnet Freight Rail's North Corridor improved to an annualised run rate of 59.9Mt from 56.8Mt, allowing Thungela to sell more coal than it produced during the period. Rail performance remains one of the greatest constraints on South African operations, as a miner that cannot transport product to port does not have saleable production. Private rail operators are coming in 2027, introducing competition to stimulate the failed nationalised industry. |
Transnet Rail Logistics Infrastructure Competition | |
South AfricaSouth African export saleable production was 6.3Mt, maintained despite production ending at Goedehoop North. Khwezela benefited from improved water management, Mafube performed strongly, and both Annea Colliery and Zibulo North Shaft life-extension projects were delivered on time and within budget. South African FOB cost including royalties was R1,374/t within guidance. The stronger rand appreciated by an average of 11% against the dollar, reducing the rand value of dollar-denominated coal sales. |
Production Cost Management Currency Mine Extensions | |
AustraliaEnsham recovered strongly from 1H25 geological challenges, with export saleable production increasing from 1.6Mt to 2.2Mt. FOB cost including royalties fell to R1,466/t below full-year guidance. The average realised price reached $110.92/t, slightly ahead of estimates, though at a 13.3% discount to benchmark partly due to previously contracted fixed-price tonnes. Management expects the discount to narrow during the second half as those contracts moderate. |
Ensham Recovery Realised Price Geology | |
DividendsThe board declared an interim dividend of R5.50 per share, costing R773m or approximately £32m, representing 41% of adjusted operating free cash flow and comfortably above the stated minimum distribution policy of 30%. Since demerging from Anglo American in 2021, Thungela has returned more than R23bn (£1.1bn) through dividends and buybacks, marking its tenth consecutive dividend since listing. |
Capital Return Shareholder Returns Distribution Policy | |
| 2026 Q1 |
StaffingRobert Walters recruitment consultancy showing sequential improvement with Net Fee Income stabilizing after double-digit declines in 2025. Fee earner productivity rose 9% and perm placements per fee earner increased 6%. Four of RWA's top markets are now growing including Japan which returned to 13% growth. |
Recruitment Productivity Japan Recovery |
| 2025 Q4 |
MiningMultiple mining holdings performed well in 2025, with Baker Steel Resources Trust up 38.4% despite some headwinds from metallurgical coal prices. Holdings include copper developers, gold royalties, tungsten, silver, and tin projects benefiting from strong commodity prices. |
Copper Gold Silver Tungsten Tin |
EnergyDiversified Energy Company down 20.4% despite manager's continued positive outlook for US natural gas and LNG growth. Manager expects data center energy needs and LNG exports to position the company well for 2026. |
Natural Gas LNG Energy | |
BiotechnologyAgronomics up 60% in 2025 despite trading at 50% discount to NAV. Focus on alternative protein companies including BlueNalu for Blue Fin Tuna production and Liberation Bioindustries opening first commercial factory in 2026. |
Alternative Protein Biotechnology | |
Private EquityGeorgia Capital up 160% in 2025, described as a triple bagger since inclusion. Remains at 24.5% discount to NAV despite strong performance, with private businesses valued at only 7.1X to 9.9X earnings. |
Private Equity Georgia | |
BuybacksMultiple portfolio companies engaged in share buybacks including Georgia Capital, Digital 9 Infrastructure planning significant capital returns, and Diversified Energy buying back shares. Manager views buybacks as value-enhancing given discount valuations. |
Share Buybacks Capital Returns |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 15, 2026 | Fund Letters | The Oak Bloke | RWA.L | Robert Walters | Staffing & Employment Services | Human Resource & Employment Services | Bull | New York Stock Exchange | Asia-Pacific, Automation, cost-cutting, Cyclical, Europe, Geographic Diversification, Human Resources, Japan, Operational Leverage, productivity, professional services, Recruitment, turnaround, UK, Value | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | CGEO LN | Georgia Capital PLC | Financials | Diversified Financials | Bull | New York Stock Exchange | buybacks, discount, growth, NAV, valuation | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | ANIC LN | Agronomics Limited | Financials | Closed End Funds | Bull | New York Stock Exchange | Alternativeprotein, Biotech, Navdiscount, Optionality, Regulation | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | FAIR LN | Fair Oaks Income Limited | Financials | Asset Management | Bull | New York Stock Exchange | buybacks, Clo, Credit, Income, yield | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | DEC LN | Diversified Energy Company PLC | Energy | Oil & Gas | Bull | New York Stock Exchange | buybacks, cashflow, energy, LNG, Naturalgas | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | PTAL CN | PetroTal Corp | Energy | Oil & Gas | Bull | New York Stock Exchange | leverage, Navdiscount, oil, Operations, turnaround | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | IPO LN | IP Group plc | Financials | Capital Markets | Bull | New York Stock Exchange | Biotech, buybacks, Greentech, NAV, Venture | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | POW LN | Power Metal Resources plc | Materials | Diversified Metals & Mining | Bull | New York Stock Exchange | Copper, Optionality, rerating, royalties, uranium | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | TMT LN | TT Investments Ltd | Financials | Asset Management | Bull | New York Stock Exchange | IPO, mobility, Navdiscount, Optionality, Privateequity | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | AUGM LN | Augmentum Fintech plc | Financials | Venture Capital | Bull | New York Stock Exchange | banking, Fintech, growth, Navdiscount, Venture | Login |
| Jan 2, 2026 | Fund Letters | The Oak Bloke | KZG LN | Kazera Global plc | Materials | Precious Metals & Minerals | Bull | New York Stock Exchange | Diamonds, Lithium, Mining, Optionality, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| TGA.L | Thungela's operations recovered rather well in 1H26. Export saleable production increased 6% to 8.48Mt, export equity sales rose 7% to 8.94Mt, and adjusted EBITDA almost doubled to R1.32bn with margins expanding from 4.7% to 8.7%. Profit for the period increased 461% to R1.39bn, though approximately R1bn came from a non-cash gain connected with the disposal of the Kleinkopje mining right. Ensham recovered strongly with production increasing from 1.6Mt to 2.2Mt and FOB cost falling to R1,466/t below guidance. South African production was maintained at 6.3Mt despite Goedehoop North ending. Transnet Freight Rail's North Corridor improved to 59.9Mt annualised run rate from 56.8Mt. The company ended June with net cash of R6.1bn (approximately £255m) and declared an interim dividend of R5.50 per share. At approximately 525p, TGA is valued at around £738m market capitalisation. The board has reconfirmed a strategy involving selective growth opportunities. Full-year production and cost guidance remain unchanged. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
