Tharisa (THS) chief executive Phoevos Pouroulis has had a good year, but he’s not entirely happy. “It’s an area of frustration for us - we feel we’ve delivered to the plan we set out,” he tells us, when asked to comment on the platinum and chrome miner’s current market rating, which on an enterprise value to cash profit ratio of three is around half that of comparable stocks.
Executives are hard-wired to talk up their company’s valuation, but Mr Pouroulis might have a point. In the year to September, operating profit nearly tripled to $95.9m (£71.3m) on a 4 per cent increase in run-of-mine production and better chrome prices, which outweighed a flat platinum price and a 9.5 per cent appreciation in the rand against the greenback.
Strong cash generation helped Tharisa clear $47m of net debt, though this latter metric would have looked less rosy had post-period additions to the equipment fleet – for $20.6m cash plus additional financing – been signed a day earlier.
Nonetheless, the outlook has since strengthened. Specifically, China’s 19th National Congress gave management comfort that demand for stainless steel – to which chrome concentrate is a key feedstock – will remain robust in the coming years. Peel Hunt forecasts adjusted pre-tax profits of $99.8m and EPS of 23.5¢ for the year to September 2018 (from $95.5m and 22.8¢ in FY2017).
| THARISA (THS) | ||||
| ORD PRICE: | 103p | MARKET VALUE: | £268m | |
| TOUCH: | 100-105p | 12-MONTH HIGH: | 158p | LOW: 73p |
| DIVIDEND YIELD: | 3.6% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 114¢ | NET CASH: | $0.3m | |
| Year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend share (¢) |
| 2013* | 215 | -63.0 | -20.0 | nil |
| 2014* | 241 | -40.3 | -20.0 | nil |
| 2015* | 247 | 9.6 | 2.0 | nil |
| 2016 | 220 | 22.0 | 5.0 | 1.0 |
| 2017 | 349 | 91.0 | 22.0 | 5.0 |
| % change | +59 | +314 | +340 | +400 |
| Ex-div: | tbc | |||
| Payment: | tbc | |||
| £1=$1.34. *Prior to London listing. | ||||
