viewAnglo Pacific Group PLC

Anglo Pacific shares are cheap says Berenberg

An improvement in coal pricing will drive a share re-rating in the near-term, the analysts said

Anglo Pacific Group PLC -

Anglo Pacific Group PLC (LON:APF) shares are “cheap” at less than 0.7 times net asset value, analysts at Berenberg said in a note on Monday, expecting the company to maintain its quarterly dividend.

The German bank reiterated a ‘buy’ recommendation on the company as it updated its forecasts for the royalty group after recent events, including publication of results from Adaro Energy, the operator of Queensland’s Kestrel mine, over which Anglo Pacific holds a royalty.

Adaro’s second quarter production and sales of 1.21mln tonnes and 1.27mln tonnes were both higher than expected, though Adaro reduced 2020 production guidance for the mine to 6mt from 7.2mt. 

While the reduction will hit estimates for this year, it pushed up forecast attributable production and revenue assumptions for 2022, as mining will stay in the Anglo Pacific royalty area for longer.

Recent results and guidance from Labrador Iron Ore Royalty Corporation (LIORC) were weaker than expected, which together with Kestrel results in a reduction to 2020 royalty income to £39mln from £47mln, but Berenberg still forecasts earnings per share of 13p for this coronavirus-affected year, rising to 19p for 2021. 

Analysts said: “We believe that the company will maintain its quarterly dividend of 1.75p per share, with the stock currently yielding 8%, given its balance sheet flexibility and expectations of improving commodity prices.”

They added that an improvement in coal pricing will drive a share re-rating in the near-term, with measures to address 2022 revenues being “the key catalyst for a material re-rating”. 

Berenberg’s price target moved to 160p per share, versus the latest close price of 112.2p, after a strengthening of sterling.

The shares were up over 1% to 113.84p on Monday afternoon.

Quick facts: Anglo Pacific Group PLC


Price: 121 GBX

Market Cap: £258.67 m

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of named herein, including the promotion by the Company of in any Content on the Site, the Company receives from said issuer annual cash...


Anglo Pacific Group announce CEO is stepping down as the firm gears up for...

Anglo Pacific Group PLC (LSE:APF, TSX:APY, OTC:AGPIF, FRA:HGR)'s (LON:APF, TSE:APY) Chief Financial Officer Kevin Flynn joins Proactive London's Katie Pilbeam after announcing Julian Treger is stepping down as chief executive in due course and that it has started a search for his...

3 weeks, 6 days ago

2 min read