Fortune Oil (FTO) announced a special dividend of 2.36p a share at the half-year stage, as total revenues (including jointly controlled entities) moved up by 10 per cent, but the market is still ascribing no value to Fortune's ongoing business.
In fact, Fortune' current market value of £175m and net debt of £69.3m is more than covered by the $400m (£258m) cash and share consideration that Fortune is set to receive for its gas business from China Gas Holdings (CGH), which was announced last December. Final regulatory approval has now been received and completion is expected in the current quarter. Fortune will issue around 600m shares to indirectly fund a $12m working capital loan, and the $60m purchase of the residual 15 per cent stake in its gas business that was held by Wilmar International.
Excluding gains on disposals, Fortune's operating profits were down by 10 per cent to £12.8m, partly due to aviation fuel price movements that resulted in an inventory loss at its Bluesky aviation refuelling business. On an operational basis, Bluesky actually performed creditably, registering an 11 per cent increase in sales volumes to 1.6m tonnes; Fortune's West Zhuhai Products Terminal increased volumes by a fifth to 1.4m tonnes, and the natural gas supply business added a further 32,497 new customers, taking the total to 312,500, while sales volumes rose by a fifth to 287m cubic metres.
| FORTUNE OIL (FTO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 8.81p | MARKET VALUE: | £175m | |
| TOUCH: | 8.51p-8.9p | 12-MONTH HIGH: | 13.5p | LOW: 7.13p |
| DIVIDEND YIELD*: | 1.8% | PE RATIO: | 63 | |
| NET ASSET VALUE: | 16.5p | NET DEBT: | 21% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 45.7 | 6.87 | 0.34 | nil |
| 2013 | 45.6 | 1.66 | 0.06 | nil |
| % change | - | -76 | -82 | - |
*Excludes proposed special half-year dividend of 2.36p a share | ||||
