When economists talk of the massive present shock to demand, they often talk in aggregate terms. People still need to eat, after all. The effects on electricity demand are likely to be more uneven, although the portfolio of power plants operated by ContourGlobal (GLO) have so far been unaffected.
Management used the full-year results to assure the market that material disruption is not currently forecast in 2020. Investors hunting for a lifeboat promptly bid up the shares by 17 per cent, despite a solid but broadly in line set of numbers, in which income from operations climbed 11.5 per cent to $292m (£241m) and cash conversion dipped from 50 to 48 per cent.
Stock-pickers had another reason to cheer. Following rising political opposition, a coal power plant development in Kosovo has been abandoned, meaning the company will no longer pursue projects or acquisitions involving the fossil fuel in the future.
The hit – aside from a foregone (and somewhat paradoxical) reduction in CO2 emissions in the country – will be a $12m impairment and recoverable costs of $22m. The bonus could be the stock’s growing attraction to ESG-themed funds, which would have hitherto screened out a developer of coal assets. “If anything, it increases the addressable investor base,” acknowledged chief financial officer Stefan Schellinger.
Analysts at Investec expect adjusted earnings per share of 22.7¢ in 2020, dropping to 14.9¢ next year.
| CONTOURGLOBAL (GLO) | ||||
| ORD PRICE: | 160p | MARKET VALUE: | £1.07bn | |
| TOUCH: | 159.6-160.2p | 12-MONTH HIGH: | 227p | LOW: 120p |
| DIVIDEND YIELD: | 7.6% | PE RATIO: | 48 | |
| NET ASSET VALUE: | 57.4¢* | NET DEBT: | $3.53bn | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2015** | 0.84 | -31.5 | na | nil |
| 2016** | 0.91 | 42.9 | 6.0 | nil |
| 2017 | 1.02 | 40.6 | 3.0 | 2.6 |
| 2018 | 1.25 | 27.8 | 2.0 | 13.4 |
| 2019 | 1.33 | 59.4 | 4.0 | 14.8 |
| % change | +6 | +114 | +100 | +10 |
| Ex-div: | 26 Mar | |||
| Payment: | 9 Apr | |||
| £=$1.21. *Includes intangible assets of $353m, or 52.6¢ a share **Pre-IPO figures | ||||
