Pan African Resources (PAF) exited its financial year in June, bloodied but unbowed. Gold production – already sagging at the halfway mark – continued to drop, and ended 15.4 per cent down on 2016’s output of 204,928 ounces. And although the miner reshaped its portfolio of assets, took a scythe to net borrowings, and is set to see a marked increase in sales from next year, there can be no escaping the massive year-on-year jump in all-in sustaining costs. In 2016-17, it was 26.8 per cent in rand terms, or 35.3 per cent when accounted in dollars.
Full-year figures spelled out the operational challenges: eight weeks of suspended production at Evander, community unrest, regulatory inspections and lower grades from Barberton all coalesced to squash mining profits. Indeed, the £10.9m drop in pre-tax profit would have been worse had Pan African not made a ZAR91.3m (£5.39m) return on its disposal of the Uitkomst Colliery to Coal of Africa at the period end, after just 15 months of ownership.
Broker Peel Hunt expects adjusted pre-tax profit of £53.1m and EPS of 2.4p in the year to June 2018, rising to £74.2m and 2.9p in 2019.
| PAN AFRICAN RESOURCES (PAF) | ||||
| ORD PRICE: | 13p | MARKET VALUE: | £291m | |
| TOUCH: | 13-13.3p | 12-MONTH HIGH: | 23p | LOW: 12p |
| DIVIDEND YIELD: | 3.7% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 9.7p | NET DEBT: | 2% | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 134 | 54.7 | 2.60 | 0.80 |
| 2014 | 154 | 33.9 | 1.50 | 0.81 |
| 2015 | 141 | 15.8 | 0.60 | 0.53 |
| 2016 | 161 | 33.9 | 1.41 | 0.88 |
| 2017 | 170 | 23.0 | 1.14 | 0.49 |
| % change | +5 | -32 | -19 | -45 |
| Ex-div: | 7 Dec | |||
| Payment: | 21 Dec | |||
