Bushveld Minerals (BMN) has become one of the most closely watched Aim resource stocks. The integrated vanadium producer has benefited from increased interest in the element’s potential application in rechargeable flow batteries, the development of which is intertwined with the expansion of renewable power generation. But the South Africa-focussed group has also benefited from the metal’s use in the construction industry.
A cursory glance at the table points to a sea change in 2018, primarily a reflection of the acquisition of a controlling stake in the Vametco Mine & Processing Plant in December 2017. Profits and cash flows were propelled by the underlying vanadium price, which hit a 10-year high in November 2018. And an existing structural deficit has been exacerbated by regulatory issues, as China’s steelmakers had to increase the vanadium content required in structural steel products to keep buildings more stable in earthquakes. This new ‘rebar’ standard, governing the reinforced steel used as rods in concrete, is expected to increase China's vanadium demand by 30 per cent.
The pricing environment underpinned cash profit of $101m (£79.5m), but it wasn’t all plain sailing. The miner had a poor year in terms of production, with output down 3.4 per cent due to lengthy industrial stoppages at the Vametco operation.
Bloomberg consensus gives adjusted EPS of 6.5¢ for the December 2019 year-end, falling to 4.2p the following year.
| BUSHVELD MINERALS (BMN) | ||||
| ORD PRICE: | 24.5p | MARKET VALUE: | £274m | |
| TOUCH: | 24-25 | 12-MONTH HIGH: | 50p | LOW: 17p |
| DIVIDEND YIELD: | nil | PE RATIO: | 11 | |
| NET ASSET VALUE: | 12¢^ | NET CASH: | $42m | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | nil | -1.8 | -0.39 | nil |
| 2016 | nil | -1.7 | -0.28 | nil |
| Year to 31 Dec** | Turnover ($m) | Pre-tax profits ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017* | 2.8 | -0.9 | -0.20 | nil |
| 2018 | 192 | 86.6 | 2.90 | nil |
| % change | +6761 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *10-month period **Bushveld changed reported currency to dollars for 2018 ^Includes intangible assets of $57m, or 5.1¢ a share. £1 = $1.27. | ||||
