MP Evans (MPE) reported "record production” of crude palm oil during 2018, up 25 per cent to 192,500 tonnes. Other palm oil companies, along with producers of substitutable vegetable oils, also saw a surge in yields in the second half, resulting in a 16 per cent fall in the average price to $598 (£458) per tonne. Chief executive Tristan Price expects a recovery in the price during the current financial year due to underlying demand trends, although the March price – admittedly well in advance of November's low point – was still 13 per cent adrift of the 2018 average.
The company did manage to cut costs by 14 per cent to $320 a tonne, which finance director Matthew Coulson said was partly due to increased benefits of scale. That expansion is also evident in the cash flow statement, although MP Evans is expecting to build further capacity, with plans to double the number of mills it operates to six by 2023. It’s also aiming to have nearly all of its production classified as "certified sustainable palm oil”, compared with 77 per cent at the period-end, although that certification has drawn the ire of environmental groups.
Peel Hunt expects adjusted pre-tax profits of $35.7m in 2019, giving adjusted EPS of 38.4¢, up from $19.1m and 18¢ in 2018.
| MP EVANS (MPE) | ||||
| ORD PRICE: | 658p | MARKET VALUE: | £359m | |
| TOUCH: | 632-658p | 12-MONTH HIGH: | 800p | LOW: 616p |
| DIVIDEND YIELD: | 2.1% | PE RATIO: | 87 | |
| NET ASSET VALUE: | 695¢ | NET DEBT: | 2% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014 | 90.0 | 24.1 | 49.1 | 8.8 |
| 2015 | 72.5 | 6.8 | 11.7 | 8.8 |
| 2016 | 83.9 | 19.2 | 22.3 | 15.0 |
| 2017* | 117 | 35.1 | 41.8 | 17.8 |
| 2018 | 109 | 18.3 | 9.9 | 17.8 |
| % change | -7 | -48 | -76 | - |
| Ex-div: | 18 Apr | |||
| Payment: | 21 Jun | |||
| *Re-stated to reflect IFRS 15 accounting £1=$1.31 | ||||
