Anglo Pacific Group (APF) has held on to its dividend, unlike many of its peers, which are pausing payouts to protect cash holdings. The mining royalty company generated record revenue in 2019, thanks to the Kestrel metallurgical coal holding. Anglo Pacific also ramped up spending to acquire £63m of new royalties last year, so statutory earnings per share were flat on 2018.
Chairman Patrick Meier said the dividend decision came from the 2019 cash flow level and low debt levels. He said the company could also afford to look at buying more royalties this year because of its access to liquidity and “market conditions being favourable for dealflow given the significant recent increase in the cost of capital for many”.
The company’s outlook sees Kestrel coal production increasing again this year by 6.5 per cent, after it climbed 42 per cent last year. Metallurgical coal prices have stayed fairly level in the past two months, only coming down 5 per cent to $142 per tonne (FOB Australia) in that time. Prices have not plunged because of a tight market, according to benchmarking company Platts, although a fall could come this quarter if steelmakers outside China cut production. Anglo Pacific will be hoping for improvement in the vanadium price, after weakness last year saw its income from the Maracás Menchen mine fall by half, to £2.8m.
The company’s major new copper royalty is also in a less-than-ideal price situation. While the red metal’s price will be supported somewhat by production cuts due to Covid-19, demand has also fallen significantly and it has settled well under $5,000 a tonne.
| ANGLO PACIFIC (APF) | ||||
| ORD PRICE: | 138p | MARKET VALUE: | £ 249m | |
| TOUCH: | 135-140p | 12-MONTH HIGH: | 229p | LOW: 99p |
| DIVIDEND YIELD: | 6.5% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 125p | NET DEBT: | 13% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 8.7 | -30.5 | -14.1 | 7.0 |
| 2016 | 19.7 | 28.3 | 15.6 | 6.0 |
| 2017 | 39.6 | 11.8 | 5.9 | 7.0 |
| 2018 | 46.1 | 44.5 | 16.0 | 8.0 |
| 2019 | 55.7 | 37.6 | 16.1 | 9.0 |
| % change | +21 | -16 | +1 | +13 |
| Ex-div: | 04 Jun | |||
| Payment: | 18 Jun | |||
