The latest full-year report from Polo Resources (POL) reflects the increase in the group's exposure to oil & gas and gold interests, while adding ballast to our view that Polo remains fundamentally undervalued despite the fact that it has returned in aggregate $185m (£115m) to shareholders in the two years to 30 June 2012.
Polo principally refocused its investment strategy by forking out $27m for a 21.7 per cent interest in Signet Petroleum, in addition to a $16.5m outlay for a 90 per cent stake in Sierra Leone gold miner Nimini Holdings. Through Signet, Polo hopes to tap into the growth of Africa's frontier energy markets, while Nimini's flagship Komahun project includes 521,000 ounces of gold in the indicated category with another 263,000 ounces inferred from data released in February.
Comparative full-year figures are largely immaterial given that Polo is at the early stage of building value in its new portfolio. The group recorded an operating profit of $9.6m (from $62.2m in 2011), including a $3.9m write-off relating to an investment in MinFer Holdings. Polo ascribes respective values of $8.3m & $90.8m to its listed/unlisted investments, in addition to $43.2m in cash, receivables and short-term investments for a total of $142m, or over 50 per cent more than Polo's own market value.
Investec estimates a June 2013 net asset value (NAV) of 3.78p a share.
| POLO RESOURCES (POL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2.49p | MARKET VALUE: | £57m | |
| TOUCH: | 2.4-2.5p | 12-MONTH HIGH: | 3.85p | LOW: 2.25p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 13 | |
| NET ASSET VALUE: | 3.85p* | NET CASH: | $42m | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | nil | -6.7 | -1.12 | nil |
| 2009 | nil | -62.7 | -3.20 | nil |
| 2010 | nil | 28.8 | 1.23 | nil |
| 2011 | nil | 66.9 | 2.75 | nil** |
| 2012 | nil | 7.3 | 0.31 | nil |
| % change | - | -89 | -89 | - |
£1 = $1.61 **excludes a special dividend of 2p a share | ||||
