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Anglo Pacific Group reports surge in 2016 royalty income, to reconsider its dividend levels with interims
Coal firm Anglo Pacific Group PLC (LON:APF, TSE:APY) has reported a surge in royalty income in full-year 2016, mainly thanks to a significant increase in overall saleable tonnes from its Kestrel mine in Australia and is to reconsider its dividend levels with its 2017 interims.
The group reported a 127% increase in royalty income for the full-year to December 31 to £19.7mln, up from £8.7mln in 2015.
The group also saw a significant increase in basic earnings per share to 15.60p, after a loss of 14.06p in 2015, with adjusted earnings per share jumping to 9.76p from 2.47p.
It pointed out that its earnings benefitted from upward revisions to coal prices and the weakening of the pound following June’s EU Referendum Brexit vote.
The firm said the improved earnings translated into free cash flow generation of £13.2mln in 2016, up from £4.7mln a year earlier, with net debt reduced to £1.0mln as at December 31 2016.
Julian Treger, Anglo Pacific’s chief executive officer of Anglo Pacific, said: “2017 should be a year of significant organic growth for Anglo Pacific as production at Kestrel moves increasingly into our royalty lands and we benefit from planned production increases at Narrabri.
“Coal prices remain much higher than in the previous year and this, we believe, has set a new base level for prices above those forecast this time last year”.
He added: “Our focus continues to be on adding further royalties to the portfolio. We see a number of prospective opportunities in the mid-tier and development arena where the lack of recent M&A activity, combined with underinvestment in growth, should spur renewed interest in developing the next wave of projects that will be required to meet expected supply deficits in the future.”
Dividend focus …
The group has recommended a final dividend of 3.00p per share resulting in a total dividend for 2016 of 6.00p, albeit down from the 7.00p paid in 2015.
Treger concluded: “The strong results reported today means that we will reconsider dividend levels at the time of the interims, when we have greater visibility as to coal price movements for the year and the outlook for the next few years.”
In an initial reaction to the Anglo Pacific numbers, analysts at Shore Capital said: “2016 financials significantly improved, profits ahead of our expectations.”
In early trading, Anglo Pacific shares were 4%, or 4.5p higher at 117.0p.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/175665/anglo-pacific-group-reports-surge-in-2016-royalty-income-to-reconsider-its-dividend-levels-with-interims-175665.html
