23rd Mar 2016 09:18
LONDON (Alliance News) - Anglo Pacific Group PLC Wednesday said it has cut its dividend for 2015 and warned its payout to shareholders is likely to fall again next year after the company revised its policy to ensure it can sustain the payouts and protect its balance sheet.
The company, which collects royalties connected to the mining of natural resources, said its pretax loss in 2015 was significantly narrower year-on-year at GBP30.5 million from USD42.4 million, after the amount of royalties collected increased to GBP8.7 million from GBP3.5 million.
Anglo Pacific said it will pay a total dividend of 7.0 pence for the year, lower than the 8.45 pence paid in 2014.
The new dividend policy, originally outlined in January, is to pay "at least" 65% of adjusted earnings, which amounted to GBP6.2 million in 2015 compared to a GBP4.0 million loss the year before.
Anglo Pacific said it intends to pay a "minimum" total annual dividend of 6.0 pence per share "in the medium-term".
"Despite the progress we have made in the year, Anglo Pacific has not been immune to the declines which have beset the mining sector over the past year. The indiscriminate selling which has affected commodity stocks has also impacted our share price, to an extent that we trade well below our net asset value per share and at a very high dividend yield," said Chief Executive Julian Treger.
"Ordinarily such a yield would suggest to the market a further dividend cut. However, following...a revision to our dividend policy, we have now made the cuts we believe are necessary to protect our balance sheet, subject to ongoing market conditions being relatively stable," he added.
Importantly, the rise in royalties led the company to an operating profit before items of GBP2.1 million, swinging from the GBP2.8 million loss last year.
Impairments in 2015 amounted to GBP5.3 million, significantly less than the GBP31.6 million booked in 2014. However, that was offset as the company booked a GBP27.2 million loss from the revaluation of its coal royalties from the Kestrel mine compared to the GBP11.8 million loss reported in 2014.
The company's cash balance at the end of the year stood at GBP5.7 million, with a net debt position of GBP1.8 million. That compares to the cash balance of GBP8.8 million at the end of 2014 and zero debt at the end of 2014.
Anglo Pacific shares were up 6.3% to 68.0 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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