For the second year in a row, Anglo Pacific Group (APF) set a record for royalty-related income in 2018, thanks in large part to a £32.6m contribution from its Kestrel coal tenement. That was up 13 per cent on 2017, and looks set to rise should operator Adaro get anywhere near a target to increase volumes by 40 per cent this year.
The mark-to-market accounting of Kestrel, listed as £110m in these accounts, suggests that half of Anglo’s book value still lies in coal. But chief executive Julian Treger, who has been keen to diversify the income stream since he joined in 2013, reckons Kestrel would command a quarter of group net asset value if other royalties were accounted for on the same basis.
Either way, those alternative streams are bearing fruit. Vanadium prices continued their rally in the second half of 2018, causing income from Maracás Menchen to almost triple to £5.9m. In the process, it became the second-most lucrative royalty in the portfolio, after a fault at the Narrabri mine caused a drop in sales volumes.
Offsetting this was a maiden £1.9m contribution from Anglo’s £38.4m stake in the Labrador Iron Ore Royalty Corporation, and a £2m positive revaluation of the El Valle-Boinàs/Carlés royalty.
This year, consensus forecasts are for revenues of £51.8m and earnings of 20.7p per share.
| ANGLO PACIFIC GROUP (APF) | ||||
| ORD PRICE: | 165p | MARKET VALUE: | £299m | |
| TOUCH: | 162.5-166p | 12-MONTH HIGH: | 185p | LOW: 122p |
| DIVIDEND YIELD: | 4.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 120p* | NET DEBT: | 1% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 3.5 | -42.4 | -42.1 | 8.5 |
| 2015 | 8.7 | -30.5 | -14.1 | 7.0 |
| 2016 | 19.7 | 28.3 | 15.6 | 6.0 |
| 2017 | 39.6 | 11.8 | 5.9 | 7.0 |
| 2018 | 46.1 | 44.5 | 16.0 | 8.0 |
| % change | +17 | +276 | +172 | +14 |
| Ex-div: | 16 May | |||
| Payment: | 30 May | |||
| *Includes intangible assets of £71.2m, or 39.2p a share. | ||||
