TIDMAPF
RNS Number : 1166E
Anglo Pacific Group PLC
07 February 2018
News Release
February 7, 2018
Anglo Pacific Group PLC
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)
Anglo Pacific Group PLC ("Anglo Pacific", the "Company" or the
"Group") (LSE: APF, TSX: APY), the London and Toronto listed
royalty company, issues the following trading update for the period
October 1 to February 7, 2018, which includes certain information
for the year ended December 31, 2017. This update is ahead of the
release of the full year results on March 28, 2018. Unless
otherwise stated, all unaudited financial information is for the
quarter or year ended December 31, 2017.
Highlights
-- 90% increase in royalty income year-on-year to GBP37.0m -
GBP37.5m (2016: GBP19.7m); a record for the Company
-- Cash received from Denison/McClean Lake of GBP4.7m - GBP5.0m
in addition to the above royalty income (GBP1.8m of which relates
to H2 2016)
-- Royalty income for Q4 2017 in the range of GBP12.0m -
GBP12.6m (Q3 2017: GBP8.9m, Q4 2016: GBP12.3m)
-- 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
Anglo Pacific's private royalty lands for the immediate future
-- 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 GBP8.1m at December 31, 2017 compared to net debt of
GBP1.0m at the same time in 2016
-- Expansion of the Group's borrowing facility by US$10m to
US$40m, which is undrawn and fully available providing significant
internal resources to fund future acquisitions
-- Non-cash fair value reductions of up to GBP7.0m on royalty
assets (2016: GBP5.0m)
-- 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
Julian Treger, Chief Executive Officer of the Company,
commented:
"2017 has been a record year for Anglo Pacific with headline
royalty income up 90% to GBP37.0m - GBP37.5m. Adding the Denison
financing receipts, the Group's portfolio made a total contribution
of GBP41.7m - GBP42.5m.
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 May
15, 2018. We have also decided to increase the level of our interim
dividends from 1.5p to 1.625p during 2018, with any changes to the
total dividend being reflected in the last quarter.
The significant increase in our revenue in 2017 directly
translated to cash flow, and we ended the year with GBP8.1m (over
US$10m) in cash - even after paying over GBP15.8m in dividends and
investing over GBP29m. With an undrawn US$40m bank facility and a
fully covered dividend, the Group has immediate access to over
US$50m for royalty acquisitions.
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 May 15, 2018 to shareholders
on the register on April 6, 2018. The shares will be quoted
ex-dividend on the London Stock Exchange on April 5, 2018 and on
the Toronto Stock Exchange on April 4, 2018.
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 August 15, 2018. The following table outlines the
forthcoming dividend schedule.
Q3 2017 Q4 2017 * Q1 2018 Q2 2018
---------------- ---------- ---------- ---------- ----------
Amount (pence) 1.50p 2.50p 1.625p 1.625p
---------------- ---------- ---------- ---------- ----------
Payment date 15-Feb-18 15-May-18 15-Aug-18 15-Nov-18
---------------- ---------- ---------- ---------- ----------
Record date 05-Jan-18 06-Apr-18 06-Jul-18 05-Oct-18
---------------- ---------- ---------- ---------- ----------
Ex-div date 04-Jan-18 05-Apr-18 05-Jul-18 04-Oct-18
(LSE)
---------------- ---------- ---------- ---------- ----------
Ex-div date 03-Jan-18 04-Apr-18 04-Jul-18 03-Oct-18
(TSX)
---------------- ---------- ---------- ---------- ----------
* subject to shareholder approval at the 2018 AGM
----------------------------------------------------------------
For further information:
Anglo Pacific Group PLC +44 (0) 20 3435 7400
Julian Treger - Chief Executive Officer
Kevin Flynn - Chief Financial Officer and
Company Secretary
Website: www.anglopacificgroup.com
BMO Capital Markets Limited +44 (0) 20 7664 8020
Jeffrey Couch / Neil Haycock / Tom Rider
Canaccord Genuity Limited +44 (0) 20 7523 8000
Martin Davison / James Asensio
Peel Hunt LLP +44 (0) 20 7418 8900
Ross Allister / James Bavister / David McKeown
Redleaf Communications +44 (0) 20 3757 6880
Charlie Geller / Fiona Norman / Ian Silvera
Notes to Editors
About Anglo Pacific
Anglo Pacific Group PLC is a global natural resources royalty
company. The Company's strategy is to develop a leading
international diversified royalty company with a portfolio centred
on base metals and bulk materials, focusing on accelerating income
growth mainly through acquiring royalties on projects that are
currently cash flow generating or are expected to be within the
next 24 months, as well as investment in earlier stage royalties.
It is a continuing policy of the Company to pay a substantial
portion of these royalties to shareholders as dividends.
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 Kestrel Coal Pty
Ltd ("KCPL"), the accuracy of which KCPL does not warrant and on
which readers may not rely. The material assumptions and risks
relevant to the forward-looking statements in this announcement
include, but are not limited to: stability of the global economy;
stability of local government and legislative background;
continuing of ongoing operations at the properties underlying the
Group's portfolio of royalties in a manner consistent with past
practice; accuracy of public statements and disclosures (including
feasibility studies and estimates of reserve, resource, production,
grades, mine life, and cash cost) made by the owners and operators
of such underlying properties; accuracy of the information provided
to the Group by the owners and operators of such underlying
properties; no material adverse change in the price of the
commodities produced from the properties underlying the Group's
portfolio of royalties and investments; no material adverse change
in foreign exchange exposure; no adverse
development in respect of any property in which the Group holds
a royalty or other interest, including but not limited to unusual
or unexpected geological formations and natural disasters;
successful completion of new development projects; planned
expansions or additional projects being within the timelines
anticipated and at anticipated production levels; and maintenance
of mining title. If any such risks actually occur, they could
materially adversely affect the Group's business, financial
condition or results of operations. For additional information with
respect to such risks and uncertainties, please refer to the
"Principal Risks and Uncertainties" section of our most recent
Annual Report on the Group's website www.anglopacificgroup.com.
Readers are cautioned to consider these and other factors,
uncertainties and potential events carefully and not to put undue
reliance on forward-looking statements. The forward-looking
statements contained in this announcement are made as of the date
of this announcement only and the Group undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise, after
the date on which the statements are made or to reflect the
occurrence of unanticipated events.
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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