Digestible energy? Why it takes guts to wait for Montauk
Renewable energy specialist holds off a Nasdaq listing for now while it focuses on making gas from manure
Shareholders in renewable energy specialist Montauk – which was spun out of empowerment group Hosken Consolidated Investments (HCI) in 2014 – might have been a tad disappointed at the decision to skip the dividend for the full year to end March.
After all, Montauk had declared a maiden dividend of 39.5c a share in financial 2017. This time Montauk directors held back a payout to “focus financial resources on the continued development of the company’s operations portfolio”.
At the end of March total cash and cash equivalents on Montauk’s balance sheet was $47.8m (about R680m).
Some shareholders might reckon there is enough cash to fund new developments and also pay a stipend to shareholders – especially considering Montauk’s ability to generate strong cash flows from its gas and electricity landfill sites.
The niggling question, of course, is whether the decision to pass the dividend relates at all to a recent decision to postpone an application for a primary listing on the Nasdaq (retaining a secondary inward listing on the JSE).
It certainly makes sense to pursue a Nasdaq listing with all Montauk’s production plants based in the US.
Presumably the Nasdaq listing exercise would have been hitched to a fundraising exercise. This might have seen Montauk – which recently entered the digestible (energy from manure) space – with enough fresh capital to chase down new opportunities more aggressively.
Do we then assume that Montauk’s cash-preservation pitch means the Nasdaq listing is a little further down the road than initially anticipated?