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Anglo Pacific Group PLC
Symbol APY
Shares Issued 181,470,392
Close 2019-08-19 C$ 3.11
Market Cap C$ 564,372,919
Recent Sedar Documents

Anglo Pacific's H1 royalty revenue at 31.25M pounds

2019-08-22 06:43 ET - News Release

Mr. Julian Treger reports

ANGLO PACIFIC GROUP PLC ANNOUNCES INTERIM RESULTS H1 2019

Anglo Pacific Group PLC has released interim results for the six months ended June 30, 2019, which are available on both the group's website and on SEDAR.

 
                       RESULTS 
            (in thousands of British pounds)

                                   H1 2019      H1 2018

Kestrel                             22,692       14,225
Maracas Menchen                      1,783        2,125
Narrabri                             2,273        1,456
Denison -- interest                    975        1,079
Royalty-related dividends            3,420          141
Four Mile                              110           51
Royalty-related revenue             31,253       19,077
EVBC -- royalty receipts             1,021        1,003
Denison -- principal                 1,015          741
Total portfolio contribution        33,289       20,821

  • 64-per-cent increase in revenue in the first half of 2019 of 31.3 million British pounds (first half of 2018: 19.1 million British pounds);
  • 60-per-cent increase in portfolio contribution (which includes EVBC and Denison principal) of 33.3 million British pounds (H1 2018: 20.8 million British pounds);
  • Record half yearly Kestrel revenue -- in line with the owners target to increase volumes in 2019 by 40 per cent;
  • Higher-than-expected revenue from LIORC, representing an annualized yield of about 16 per cent on the company's investment, reflecting the distribution of retained cash and the pellet price premium achieved during H1 2019;
  • Strong recovery at Narrabri as geotechnical issues are being overcome, with 56-per-cent increase in revenue in H1 2019 of 2.3 million British pounds (H1 2018: 1.5 million British pounds);
  • Maracas Menchen is on track to deliver on its expansion plans, but revenue has been impacted by a significant decline in the vanadium price from the record levels achieved in 2018;
  • 42-per-cent increase in adjusted earnings per share to 12.13 pence (H1 2018: 8.56 pence) basic earnings per share more than doubled to 16.76 pence (H1 2018: 7.24 pence);
  • 78-per-cent increase in cash generated from operating activities to 26.6 million British pounds (H1 2018: 15.1 million British pounds) with free cash flow generated in H1 2019 of 27.4 million British pounds -- a 53-per-cent increase on the 17.9-million-British-pound equivalent in H1 2018;
  • Borrowings repaid in full during the period, with 14.5 million British pounds of cash on hand at June 30, 2019 (year-end 2018: net debt of 3.1 million British pounds) and access to $90-million (U.S.) of borrowings;
  • 19-per-cent increase in net assets to 260.1 million British pounds (year-end 2018: 218.1 million British pounds) translating into net assets per share of 144 pence (year-end 2018: 121 pence);
  • The strong results for the first half should lead to an increase in the full-year dividend for 2019 to a minimum of nine pence per share, subject to market conditions and the impact of further global volatility during H2 2019.

Other highlights:

  • About 10-million-British-pound additional investment in LIORC year to date, of which 1.0 million British pounds had been deployed during the six months ended June 30, 2019, bringing the company's current position to about 5.2 per cent at an average price of $24.50/share;
  • Volatility in exchange rates has had a positive impact thus far in Q3 2019, and the group has entered into further forward contracts to protect a portion of expected revenue, which should benefit the group when translating full-year revenue at the end of the year.

Julian Treger, chief executive officer, commented: "We are pleased to report another period of strong organic growth in H1 2019, with record revenue from Kestrel as the new owners appear to be on track to deliver their ambitions to increase production in 2019 by 40 per cent.

"Although Kestrel accounted for the majority of our revenue in H1 2019, we were also pleased to see the revenue from our most recent acquisition, LIORC, outperform our expectations. The 3.2 million British pounds received in H1 2019 alone represented an underlying yield of about 16 per cent on an annualized basis. We have increased our investment in LIORC by a further about 10 million British pounds in the year to date, taking advantage of the recent decline in global equities in identifying an attractive entry point based on the current yield and our confidence in the iron ore pellet premium in the near term.

"We continued to generate significant free cash flow during the period, which allowed us to repay our borrowings in full. The cash on hand at the end of the period, when added to our available facilities, provides about $100-million (U.S.) of liquidity to us, which is even more important in the context of short-term volatility in the capital markets.

"Given the strength of our results in the first half of the year, we would expect to increase the full-year dividend from eight pence per share to a minimum of nine pence per share, depending on market conditions and outlook in H2 2019."

Analyst presentation

There will be an analyst presentation via conference call at 9 a.m. British Summer Time on Aug. 22, 2019. The presentation will be hosted by Mr. Treger, Kevin Flynn, chief financial officer, and Juan Alvarez, head of investments.

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