These half-year figures from Potash miner Sirius Minerals (SXX) are largely meaningless, but investors should focus on the company's diminishing cash balance as well as a minor strategic update.
Before borrowings, Sirius had £13.1m in cash at end-September - down from £36.8m a year earlier. Operating cash outflow in the period reached £6.1m with £9.2m spent on investing activities. Management admits that Sirius "will require additional funding to achieve its objectives over the next 12 months, but the directors feel confident that this will be forthcoming from one or more of various alternatives". Notably, there's still £15m of convertible bond funding available from a New York-based investor, with only £10m of the £25m convertible security arrangement having been drawn down since August.
Sirius will need funds to continue advancing environmental and permitting work before re-submitting the development plans for its York polyhalite project in July 2014. It could then receive a decision by the planning authorities by end-2014. In the meantime, it will need to address several concerns flagged by consultants in the summer, as well as sign further off-take agreements or potentially a strategic partnership.
Analysts at Macquarie expect an adjusted full-year loss of £16.9m; nearly double the £8.6m loss reported last year.
SIRIUS MINERALS (SXX) | ||||
|---|---|---|---|---|
| ORD PRICE: | 10p | MARKET VALUE: | £148m | |
| TOUCH: | 10-10.5p | 12-MONTH HIGH: | 30p | LOW: 6p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 6p* | NET CASH: | £6.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | nil | -6.4 | -0.5 | nil |
| 2013 | nil | -8.5 | -0.5 | nil |
| % change | - | - | - | - |
*Includes intangible assets of £83.8m, or 5.7p a share Ex-div: - Payment: - | ||||
