In a move billed as “in line” with a shift from expansion to steady state production, Johan Dippenaar is to step down as chief executive of Petra Diamonds (PDL). If that sounds like a non-sequitur – particularly after a painful recent rights issue – then investors saw through any confusion, and responded by pushing up Petra's shares on the news, which accompanied full-year results.
The miner’s numbers were complicated by two factors. The first was the KEM joint venture, which is soon to be disposed, but nonetheless compounded the statutory loss due to a further $40.7m-worth (£31m) of impairments. The second was June’s emergency capital raise, which has only gone as far as reducing net debt from 3.9 to 2.7 times consolidated cash profits.
Finance director Jacques Breytenbach, who declined to comment on his potential candidacy for the top job, summed up recent trading in contrite terms. “We understand well that we’ve let ourselves down, along with stakeholders and shareholders, in the ramp-up,” he told us.
Some shareholders were also disappointed at the conservatism of the group’s long-term foreign exchange forecasts, a view that has been vindicated by the rand’s depreciation against the dollar since the fundraising, and which has prompted Petra to consider hedging some of its currency exposure.
On average, analysts expect adjusted earnings per share of 8¢ in the year to June 2019, against consensus forecasts for 5¢ in FY2018.
| PETRA DIAMONDS (PDL) | ||||
| ORD PRICE: | 37.4p | MARKET VALUE: | £323m | |
| TOUCH: | 37.4-37.6p | 12-MONTH HIGH: | 76p | LOW: 33p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 64¢ | NET DEBT: | 94% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2014* | 472 | 124 | 9.8 | nil |
| 2015* | 425 | 85.0 | 7.7 | 2.5 |
| 2016* | 431 | 75.4 | 8.5 | nil |
| 2017 (restated) | 395 | 43.0 | 3.1 | nil |
| 2018 | 495 | -85.0 | -15.9 | nil |
| % change | +25 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| £1=$1.31. *2014-2016 EPS and DPS adjusted for issue of 333m shares in Jun 2018. | ||||
