The huge challenges facing Pan African Resources (PAF) in recent months were laid bare in full-year results as low grade ore and operational headaches squeezed margins.
The South African miner sold 176,000 ounces (oz) of gold at an average of $1,212 (£781)/oz in the year to June, against 188k/oz at $1,303 in 2014. The first half was badly affected by oil contamination at the Barberton mine, which resulted in 11 days of lost production and a 10 per cent jump in costs. At the same time, the low grade cycle at the Evander mines caused an 18.7 per cent jump in cash costs per kilo.
There were a few bright spots, though. Net debt fell by £9m in the second half to £16.6m, while production increases - which are making the platinum operations more profitable - should continue into 2016. Management also intends to return to its progressive dividend policy in the current financial year, and is even eyeing a half-year payout.
Broker Peel Hunt forecasts adjusted pre-tax profit of £50.4m and EPS of 2p, up from £29.9m and 1.2p in the year to June 2015.
PAN AFRICAN RESOURCES (PAF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 7p | MARKET VALUE: | £128m | |
| TOUCH: | 6.8-7.3p | 12-MONTH HIGH: | 14p | LOW: 6p |
| DIVIDEND YIELD: | 7.7% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 8p | NET DEBT: | 11% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 79 | 26.4 | 1.2 | 0.51 |
| 2012 | 101 | 42.2 | 2.0 | nil |
| 2013 | 134 | 54.7 | 2.6 | 0.80 |
| 2014 | 154 | 33.9 | 1.5 | 0.82 |
| 2015 | 140 | 15.8 | 0.6 | 0.54 |
| % change | -9 | -53 | -56 | -34 |
Ex-div: 10 Dec Payment: 24 Dec | ||||
