If I’d invested £1k in Polymetal shares 5 years ago, here’s how much I’d have now!

Polymetal shares imploded when Russia invaded Ukraine and are yet to recover, but how would I have fared if I’d bought them in 2018?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Middle-aged white man pulling an aggrieved face while looking at a screen

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Polymetal International (LSE:POLY) is a gold and silver miner that owns 10 producing assets and two major development projects across Russia and Kazakhstan. It’s certainly been a bruising 16 months for investors in Polymetal shares.

Sanctions imposed on Russia since it invaded Ukraine have disrupted the company’s operations in the country, putting the share price under considerable pressure. To compound difficulties, the firm was also excluded from the FTSE equity indexes, but it did retain its London Stock Exchange (LSE) listing.

I don’t own shares in the business. But if I’d invested £1,000 in mid-2018 how much would I have today? Let’s explore.

Five-year performance

Five years ago, the Polymetal share price stood at £6.66. After enjoying an upward trajectory for over two years, the shares peaked in September 2020. Subsequently, they entered a prolonged downtrend and fell off a cliff when the war started.

Today, the stock trades for £1.86. That’s a disastrous 71% decline over the past half-decade.

So, if I’d invested £1,000 in the company in 2018, I could have bought 150 shares with £1 left as spare change. Today, my shareholding would have shrunk in value to a meagre £279.

However, the company paid dividends over the period. Polymetal was once a leading FTSE 100 dividend stock before the payouts were cancelled due to the conflict. Since 2018, I’d have earned £344.79 in passive income, bringing my total return to £623.79. That equates to a loss of £376.21.

Delisting and divestment

Polymetal began trading on the LSE in 2011, but this era could soon be drawing to a close. Last month shareholders approved a proposal to re-domicile the company in the Astana International Finance Centre in Kazakhstan. The company’s abandoning its current Jersey registration and LSE listing as a result. This process is expected to complete on 17 July.

The move is part of a wider plan to divest the firm’s Russian business, which accounted for around two-thirds of its revenue in 2022. Polymetal intends to ring-fence its Russian subsidiaries to ensure compliance with Western sanctions.

This leaves investors in a pickle. They could move their holdings to a broker that operates on the AIX exchange. However, Freedom24 — one of the platforms recommended by Polymetal — isn’t opening accounts for UK residents at present.

These developments will be hugely disappointing for British shareholders keen to maintain their positions, especially in light of the company’s recent guidance. Polymetal claims it has started 2023 “from a position of relative strength“. The firm expects free cash flows will resume and net debt will fall as the year unfolds.

Should investors buy?

If investors are tempted to add a gold and silver miner to their portfolios, Polymetal shares arguably look pretty cheap right now. Provided revenues recover, this could be a comeback story in the making.

However, UK investors run the risk of being left with warrants or bonds. Alternatively, they might feel forced to sell. A final option might be to go through the complicated process of transferring their shareholdings to a suitable European or Asian broker.

The uncertainty that comes with the company’s LSE delisting, coupled with the ongoing repercussions of severe sanctions, is enough to put me off. I won’t be buying.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Charlie Carman has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Middle-aged Caucasian woman deep in thought while looking out of the window
Investing Articles

If I’d invested £1,000 in Lloyds shares at the start of the year, here’s what I’d have now

The stock market is unmoved, but Stephen Wright thinks last year’s record profits might give Lloyds shares a long-term boost.

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

I’ll snap up shares in this growth stock in March if others don’t get there first

This Fool says shares in this growth stock are stable, full of profit, and might be undervalued. But there are…

Read more »

Rainbow foil balloon of the number two on pink background
Investing Articles

My 2 top energy investment trust picks for a passive income

I'm aiming to buy more of these investment trusts for a passive income and the reasonably stable energy sector returns…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

5.5% dividend yield! Shares like these could be great for my retirement

Oliver Rodzianko thinks this company with a stellar dividend yield could be very useful when looking for income from his…

Read more »

Investing Articles

Should I buy this FTSE 250 stock as it soars back to the FTSE 100?

This FTSE 250 stock has rallied following its pandemic woes. This Fool thinks now could be a good time to…

Read more »

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

How I’d aim to transform an empty Stocks & Shares ISA into £1m of wealth!

There's never a better time to start investing in a Stocks and Shares ISA than today. Here's how I'd aim…

Read more »

Close up of manual worker's equipment at construction site without people.
Investing Articles

Investing £14,708 in this FTSE 100 stock could earn me £1,000 per year in passive income

Is a CMA investigation into anticompetitive practices the cloud cover Stephen Wright needs to start buying shares in a FTSE…

Read more »

Investing Articles

Despite rising 152% in a year, is Rolls-Royce’s share price still a bargain?

While Rolls-Royce’s share price has shot up recently, it still looks very undervalued against its peers, and the business looks…

Read more »