Anglo Pacific Group PLC (“Anglo Pacific”, the “Company” or the “Group”) (LSE: APF, TSX: APY), the London and Toronto listed royalty company, is pleased to announce that its interim results for the six months ended June 30, 2017 will be released on August 23, 2017.
Anglo Pacific also issues the following trading update for the period April 1, 2017 to July 31, 2017. Unless otherwise stated, all unaudited financial information is for the quarter ended June 30, 2017.
H1 2017 Highlights
- Free cash flow of £18.5-19.0m generated in H1 2017 (H1 2016: £4.7m) which includes the £3.1-3.4m received as part of the Denison financing arrangement (£1.7m of which related to H2 2016)
- ~290% increase in royalty income to £15.9-16.3m in H1 2017 compared to the equivalent 2016 period (H1 2016: £4.1m; FY 2016: £19.7m)
- Increase in royalty income mostly attributable to ~88% of sales from Kestrel within the Group’s private royalty land compared to 38% in H1 2016, along with a ~10% increase in total sales volumes
- Significant milestone achieved at Kestrel in Q2 2017 with a royalty paid on ~95% of sales which we expect to remain around these levels for the foreseeable future
- Fair value decline of £10.5-11.5m in relation to Kestrel, largely as a result of resource depletion
- Net debt of £0.8m at June 30, 2017 (December 31, 2016: £1.0m) including repayment, within six months, of the C$12.75m drawn as part of the Denison finance arrangement
- Cash generated in July resulted in the Group returning to a net cash position
- New dividend schedule with intention to pay quarterly instalments in even tranches, although the fourth quarter dividend may be adjusted to reflect the actual level of income earned during the year
Julian Treger, Chief Executive Officer of the Company, commented:
“We are encouraged by the level of royalty income received in the first half of the year, and expect this trend to continue into the second half now that we anticipate being paid a royalty on almost all sales by Rio Tinto at Kestrel. Royalty income for 2017 is already ~80% of that reported for 2016 as a whole.
However on the flip side of such strong revenue from Kestrel is that it will impact on the valuation of the asset through resource depletion.
The level of cash generated during the first six months is also pleasing, and is already ahead of that generated in 2016 as a whole. This will allow us to repay in full the amount of borrowings drawn as part of our Denison transaction. With spot coking coal prices running higher than we had anticipated so far in Q3 2017, we will review the absolute level of the final dividend as part of our Q4 2017 trading update and will communicate this to the market in February 2018.
With the full availability of our US$30m revolving credit facility, a recent strengthening of the spot coking coal price, further weakening of the pound against our income currencies and a comfortably covered dividend expected in 2017, we are in a healthy financial position with good liquidity to pursue further royalty acquisitions and provide meaningful returns to our shareholders.”
There will be an analyst presentation on the Company’s interim results at 9:30am (BST) on August 23, 2017 at the offices of Redleaf Communications. To register your attendance or for further information, please contact Redleaf Communications on +44 (0) 20 7382 4746 or by emailing firstname.lastname@example.org.
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