07:00 Wed 07 Feb 2018
Anglo Pacific Group - Q4 2017 and year end 2017 Trading Update
News Release
Q4 2017 and year end 2017 Trading Update
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 (as amended)
Highlights
§ ~90% increase in royalty income year-on-year to
§ Cash received from
§ Royalty income for Q4 2017 in the range of
§ 93% of Kestrel's saleable tonnes in 2017 mined from within the Group's private royalty land, a significant increase on the 67% earned in 2016
§ 90%+ of Kestrel's saleable tonnes expected to be derived from
§ Royalty income from Maracás Menchen more than doubled in the year, reflecting significant production improvements and a strong vanadium price
§ Higher thermal coal prices resulted in an overall increase in royalty revenue for the year from Narrabri of ~15%, despite lower sales volumes
§ Cash of
§ Expansion of the Group's borrowing facility by
§ Non-cash fair value reductions of up to
§ Recommended increase in the final dividend from 1.5p to 2.5p, which would result in a total dividend of 7p for 2017, a 16.67% increase on the 6p in 2016 with dividend cover for 2017 expected to be in excess of 2.0x
§ 8.3% increase in quarterly dividend instalments from 1.5p to 1.625p commencing with the Q1 2018 interim dividend
"2017 has been a record year for
This significant increase in royalty income is a result of a substantial rise in sale volumes coming from within the Group's private royalty land at Kestrel, combined with higher sales prices. The average price realised at Kestrel was ~40% higher in 2017 vs. the previous year which meant that the weighted average royalty rate also increased from ~8.5% to ~10.5%. The Group's other producing royalties also performed strongly during the year, with a record year of royalty income from Maracás Menchen being particularly noteworthy.
The outlook for the year ahead, assuming consistent volumes, remains positive, with 90%+ of production at Kestrel expected to come from within our lands, and with commodity prices remaining resilient. Prices for both coking and thermal coal are being buoyed by Chinese environmental restrictions on low quality coal. It has long been our view that, over time, high quality lower polluting coal would start to become more desirable. It appears that this is now happening.
On the back of this strong performance, and taking into account our view for the year ahead, we are recommending an increase in the final dividend of 1p to bring the full year dividend for 2017 to 7p from 6p. If approved by shareholders, the final will be paid on
The significant increase in our revenue in 2017 directly translated to cash flow, and we ended the year with
With a strong cash generative portfolio and no debt, we feel we are now well placed to accelerate growth through further value enhancing acquisitions, whilst continuing to reward our shareholders with an attractive dividend yield."
Dividend
The Board is proposing a final dividend for the year of 2.5p per share, which will bring the total dividend for 2017 to 7p per share compared to 6p per share for 2016. This dividend will be subject to shareholder approval at the 2018 AGM. Subject to shareholder approval, the dividend will be paid on
The Board is also announcing an increase in the level of the quarterly interim dividend from 1.5p to 1.625p. The first such instalment will be the Q1 2018 dividend which is intended to be paid on or around
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Q3 2017 |
Q4 2017 * |
Q1 2018 |
Q2 2018 |
Amount (pence) |
1.50p |
2.50p |
1.625p |
1.625p |
Payment date |
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Record date |
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Ex-div date (LSE) |
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Ex-div date (TSX) |
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* subject to shareholder approval at the 2018 AGM |
For further information:
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+44 (0) 20 3435 7400 |
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Website: |
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+44 (0) 20 7664 8020 |
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+44 (0) 20 7523 8000 |
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+44 (0) 20 7418 8900 |
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+44 (0) 20 3757 6880 |
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Notes to Editors
About
Cautionary statement on forward-looking statements and related information
Certain information contained in this announcement, including any information as to future financial or operating performance and other statements that express management's expectation or estimates of future performance, constitute "forward looking statements". The words "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts", or negative versions thereof and other similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Further, forward-looking statements are not guarantees of future performance and involve risks and uncertainties which could cause actual results to differ materially from those anticipated, estimated or intended in the forward-looking statements. Furthermore, this announcement contains information and statements that are based on certain estimates and forecasts that have been provided to the Group by
Third party information
As a royalty holder, the Group often has limited, if any, access to non-public scientific and technical information in respect of the properties underlying its portfolio of royalties, or such information is subject to confidentiality provisions. As such, in preparing this announcement, the Group has largely relied upon the public disclosures of the owners and operators of the properties underlying its portfolio of royalties, as available at the date of this announcement.
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