Savannah Resources (LON:SAV) – CORP: Lithium permits granted
Market Cap: £10.8m; Current Price: 2.8p
Acquires two lithium projects located in Finland
Savannah Resources has now been granted the reservation permits over the Somero and Erajarvi projects, both located in Finland.
Savannah is establishing a team to advance the projects.
Savannah will begin data compilation, geological mapping, surface sampling to generate drill targets in 2016.
NORTHLAND CAPITAL PARTNERS VIEW: It is positive that there were no protracted delays in the issuance of these permits and Savannah Resources will now commence initial exploration work the Somero and Erajarvi projects. To date both of the projects have been shown to contain lithium bearing minerals but no geochemical sampling has been completed to give an idea of grades.
Petrel Resources (LON:PET) – CORP: Ghanaian negotiations
Market Cap: £6.4m; Current Price: 6.4p
Clontarf Energy (LON:CLON) – CORP:
Market Cap: £1.4m; Current Price: 0.31p
From yesterday: Negotiations to be held on the Lukoil B Block
Petrel Resources and Clontarf Energy have advised that they have been informed by the Ghanaian Ministry of Petroleum that it is available for negotiations on the Companies proposals for amended coordinates of the Tano 2A Basin Block. The Tano 2A Block was owned by Pan Andean Resources, 30% held by Petrel, 60% by Clontarf and 10% by local Ghanaians.
The Ministry advised that the Lukoil B Block is available for negotiations.
NORTHLAND CAPITAL PARTNERS VIEW: Positive developments for both Petrel Resources and Clontarf Energy with the potential for negotiations on the Lukoil B Block. The Lukoil B Block is located offshore and in deeper water than the Companies previous Tano 2A Block, but is considered highly prospective.
Latham (James) (LON:LTHM) – Buy*: Results
Market Cap: £128m; Current Price: 653p; Target Price: 800p
(Note attached)
Solid set of FY16 results, FY17 dividend upgrade
As per the trading update in March, revenue for the full year to March 2016 was in line with expectations at £186m +6.3% YoY. This was achieved on the back of higher volumes across both panels and timber and ex-warehouse and direct business throughout the year.
Profit before tax (PBT) was £12.9m, c. 17% ahead of our forecasts at £11m and +26% YoY. The business benefitted from a higher gross margin, particularly in the 2H16 where it was 19.5%, as lower prices and exchange rates had a positive impact on margin and this dropped through to the operating profit line. As a result EPS was 53.5p c. 19% ahead of our forecasts and +33% YoY. A final dividend of 10.3p was recommended c. 7% ahead of our forecasts and it takes the full year dividend to 14.3p, which is 3.7x covered. The final dividend goes ex-div on 4 August 2016.
A good start to the new year where like for like revenue was +4% YoY for April and May, both in panels and timber and the gross margin is also higher. Though management are cautioning on growth and the volatility in the value of sterling makes the immediate future difficult to predict.
No changes to our FY17 forecasts as a result, where we look for c. 5% YoY revenue growth to £196m, we maintain a gross margin of 17.5%, we look for PBT of £11.6m, EPS of 47.1p and a progressive dividend points to 15.7p, +5% on our previous 14.7p. We introduce new forecasts for FY18 where we look for similar revenue growth of c. 5% YoY to £206m, again we maintain our 17.5% gross margin, we look for PBT of £12.2m, EPS of 49.6p and a dividend of 17.1p. (Note Attached)
NORTHLAND CAPITAL PARTNERS VIEW: Solid set of FY16 results from Latham today to back up a good 1H16 performance and where revenue was in line but profits well ahead of our forecasts as the business benefitted from higher gross margins which dropped through to operating margins. The balance sheet is in very healthy shape, underpinned by good levels of cash and assets even after the investment into redeveloping the Wigston and Yate sites. The shares trade on 13.9x FY17 earnings, which is not particularly demanding and offers investors a 2.4% prospective dividend yield. We maintain our Buy rating and 800p price target.