In our full-year review for Pan African Resources (PAF) we wondered how the gold miner would fare given it exited FY2018 with £18.2m in cash, inventory and receivables as a buffer. Credit goes to management. Not only have Cobus Loots and his team increased the cash element, partly on the back of improved working capital management, but operating cash flow of £17m was equivalent to 112 per cent of mining profits, a marked improvement from the year-end even allowing for discontinued dividends.
The cessation of large-scale underground mining operations at Evander Mines not only significantly cut the capex drag, but reduced all-in sustaining costs by 23 per cent since the 2017 half year to $975 (£748). As the workings were being wound down, the Elikhulu tailings retreatment plant was coming online, feeding into the group’s continuing output, which came in at 81,014 ounces, a 54.2 per cent increase on the corresponding half year.
Peel Hunt gives adjusted profits of £42.4m for the June 2019 year-end, leading to EPS of 1.7p, rising to £62.7m and 2.7p in FY2020.
| PAN AFRICAN RESOURCES (PAF) | ||||
| ORD PRICE: | 10.6p | MARKET VALUE: | £237m | |
| TOUCH: | 10.6-10.64p | 12-MONTH HIGH: | 11p | LOW: 6.5p |
| DIVIDEND YIELD: | nil | PE RATIO: | 13 | |
| NET ASSET VALUE: | 5.6p | NET DEBT: | 82% | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 51.3 | 7.2 | 0.18 | nil |
| 2018 | 75.3 | 9.3 | 0.39 | nil |
| % change | +47 | +29 | +117 | - |
| Ex-div: | na | |||
| Payment: | na | |||
