The price of copper has been falling for most of the period since Central Asia Metals (CAML) listed in September 2010. Despite this, the company's shares trade 73 per cent above its 96p float price. The company has managed to stay profitable, and when it pays a 4.5p half-year dividend next month, more than 100 per cent of the $60m (£39m) raised at IPO will have been returned to shareholders.
But with copper now hovering at $5,300 a tonne, keeping the dividend payout at or above a fifth of revenue for the next five years looks challenging. Chief executive Nick Clarke is confident of turning a profit at $5,000 a tonne, even if this price is "not healthy for the industry". A fall in cash reserves to below $20m would be of greater concern.
As it was, cash decreased 23 per cent by the end of June to $35.8m, although this picture was skewed by an outstanding $5m trade receivable booked in the period. Central Asia has now completed the expansion of its solvent extraction plant at Kounrad in Kazakhstan, $2.5m under budget. This should further boost copper production and sales, which were up 7 per cent and 9 per cent, respectively, in the first six months of 2015.
Analysts at Peel Hunt are forecasting full-year adjusted pre-tax profit of $24.8m, giving EPS of 15.2¢ - down from $37.2m and 24.6¢ in 2014.
CENTRAL ASIA METALS (CAML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 166p | MARKET VALUE: | £185m | |
| TOUCH: | 158-166p | 12-MONTH HIGH: | 198p | LOW: 139p |
| DIVIDEND YIELD: | 6.6% | PE RATIO: | 27 | |
| NET ASSET VALUE: | 161¢* | NET CASH: | $35.8m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 33.7 | 52.3 | 52.1 | 5.0 |
| 2015 | 30.3 | 10.1 | 5.4 | 4.5 |
| % change | -10 | -81 | -90 | -10 |
Ex-div: 8 Oct Payment: 30 Oct *Includes intangible assets of $78.3m or 70¢ a share £1=$1.55 | ||||
