Anglo Pacific 's (APF) interim results contained lots of positives, including a doubling of free cash flow and the beneficial impact on the balance sheet of sterling's fall. The mining royalty group maintained the half-year dividend at the 2015 preliminary rate as per the previously announced dividend policy. But what gave investors most confidence was the outlook.
That's because output at Rio Tinto's (RIO) Kestrel coal mine in Queensland is now totally focused on the private royalty land owned by Anglo, already its biggest source of income. According to internal projections based on Rio's mining plan disclosures, Anglo thinks this will be the case for the next seven to eight years. And with third-quarter spot prices 14 per cent up on the start of the year, and expected to rise further in the fourth quarter, free cash flows should increase substantially. What's more, full-year results should be further bolstered by a soft pound.
Elsewhere, Anglo's royalty over Berkeley Energia's (BKY) uranium project in Salamanca could now be worth three times its balance sheet value, following a recent royalty award.
Prior to these results, analysts at Peel Hunt were forecasting adjusted pre-tax profits of £9.9m and EPS of 5p for the December year-end, rising to £17.8m and 9p in 2017.
ANGLO PACIFIC (APF) | ||||
|---|---|---|---|---|
| ORD PRICE: | 101p | MARKET VALUE: | £172m | |
| TOUCH: | 97-101p | 12-MONTH HIGH: | 103p | LOW: 50p |
| DIVIDEND YIELD: | 5.9% | PE RATIO: | NA | |
| NET ASSET VALUE: | 97p | NET DEBT: | 3% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 3.83 | -11.4 | -5.8 | 4.0 |
| 2016 | 4.08 | -8.18 | -3.2 | 3.0 |
| % change | +6 | - | - | -25 |
Ex-div: 29 Dec Payment: 8 Feb | ||||
