Last year was terrible for commodity prices, but for Anglo Pacific (APF), 2015 was a "turning point". That's according to the mining royalty group's chief executive Julian Treger, who oversaw a 35 per cent reduction in overheads and a 149 per cent increase in royalty income.
Almost two-fifths of the top line came from Anglo's stake in Whitehaven Coal's Narrabri mine in New South Wales, which was acquired last March. Strip that out, and the business would have done well on a like-for-like basis, too, as the entitlement to Rio Tinto's (RIO) Kestrel operations more than doubled to £3.6m. A forecast increase in the production taking place in Anglo's royalty areas in 2016 comes as coking coal prices recently posted their first increase in three years.
Meanwhile, costs fell due to a decline in headcount, lower professional fees and a reduction in bonuses. The balance sheet also looks less stretched, partly thanks to recently announced downgrade to the dividend. And while the payout remains only partially covered in 2016, asset sales, cash reserves and better cash flow should provide a buffer for management's medium-term target of a 6p a share minimum total annual dividend.
Broker Peel Hunt is forecasting full-year adjusted pre-tax profit of £6.5m, giving EPS of 3.5p, up from £4.7m and 2.5p in 2015.
ANGLO PACIFIC (APF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 74.25p | MARKET VALUE: | £126m | |
| TOUCH: | 74.25-75p | 12-MONTH HIGH: | 106p | LOW: 50p |
| DIVIDEND YIELD: | 9.4% | PE RATIO: | na | |
| NET ASSET VALUE: | 95p | NET DEBT: | 1% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 34.6 | 48.4 | 33.5 | 9.75 |
| 2012 (restated) | 15.2 | 18.0 | 10.7 | 10.2 |
| 2013 | 14.7 | -52.9 | -39.0 | 10.2 |
| 2014 | 3.48 | -42.4 | -42.1 | 8.45 |
| 2015 | 8.68 | -30.5 | -14.1 | 7.00 |
| % change | +149 | - | - | -17 |
Ex-div: 23 Jun Payment: 5 Aug | ||||
