26th Aug 2015 09:11
LONDON (Alliance News) - Anglo Pacific Group PLC Wednesday said its pretax loss narrowed in the first half of 2015, and the company said it expects to derive much more income from royalties in the second half of the year.
The natural resource investment company reported a GBP11.4 million pretax loss in the first half of 2015, narrowing from a GBP20.9 million loss a year earlier. That narrower loss resulted from the company booking a GBP9.1 million loss after re-evaluating the value of its assets, which was only half the GBP18.1 million charge booked in the previous year.
Specifically, it re-evaluated its coal royalties from the Kestrel mine and its royalty from the Narrabi mine, both in Australia.
Anglo Pacific's income, derived solely from royalties, rose to GBP3.8 million from GBP2.6 million.
Despite that, the company slashed its interim dividend to 4.0 pence from 4.45p, but said this was "consistent with previously announced dividend policy of 8.0 pence per annum".
"The first six months of 2015 have been encouraging. Income has increased significantly and royalty income in the first half of the year is now ahead of what we received for the whole of 2014. This increase is largely driven by new sources of income from Narrabri and Maracás, which further demonstrates the progress we are making on executing our strategy of adding to, and diversifying, our royalty income," said Chief Executive Julian Treger.
Going forward, the company is expecting its income from royalties to significantly improve in the second half, driven by the Narrabri and Kestrel mines.
The Narrabri mine is currently producing more than Anglo Pacific's estimates when it acquired the royalty earlier in 2015, and Rio Tinto PLC will be mining more land at the Kestrel mine in the second half that falls under the company's royalty.
"The latest forecasts which we have received from Rio Tinto confirm that our previous guidance of 70% to 75% of production at Kestrel should be within the group's private royalty land. This should result in income from Kestrel for 2015 being significantly higher than in 2014 when only GBP100,000 of income was earned in the second half of 2014," it said.
"Our income will also benefit from the current production levels being achieved at Narrabri, which are running ahead of our estimates," it added.
At the end of June, the company reported a cash balance of GBP4.0 million and net cash of GBP1.2 million in addition to the GBP16.2 million available under its revolving credit facility.
In a separate statement on Wednesday, Anglo Pacific said it is seeking to transfer the company's listing category from a premium listing as a commercial company on the official list of the London Stock Exchange to a standard listing.
That is mainly a corporate governance issue as a premium listing is only available to equity shares issued by trading companies and closed and open-ended investment entities and means the company is required to meet the UK's super-equivalent rules which are higher than the EU minimum requirements.
A standard listing allows issuers to access the Main Market by meeting EU harmonised standards only rather than the UK ?super-equivalent? requirements.
"We have been in discussions with major shareholders about the move to a Standard Listing since early 2015 and have a clear commitment, following the move, to ensure Anglo Pacific will continue to maintain high standards of corporate governance," said Treger in a statement.
"The move will provide us with greater flexibility as we continue to grow the business, whilst still providing all current and future shareholders with a high standard of protection from being a London-listed company. As a shareholder myself, I support this move and believe it is the right thing for the next stage of Anglo Pacific's development," Treger added.
Anglo Pacific Group shares were trading down 2.6% to 82.25 pence per share on Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
APF.L