29th Aug 2007 07:02
Anglo Pacific Group PLC29 August 2007 Anglo Pacific Group PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30th JUNE 2007 Anglo Pacific Group PLC, the natural resources royalties company, todayannounces its interim results for the six months ended 30th June 2007. In thehalf year under review the Group has again produced record results with bothearnings and net asset value increasing significantly. Financial Highlights • Cash and strategic investments increase by 77% to £99.8 million (2006: £56.5 million) • Australian coal royalty independent valuation of £59.0 million • Realised profits from mature mining interests increased by 38% to £11.2 million (2006: £8.1 million) • Earnings increased by 26% to 13.90p per share (2006: 11.06p) • Profit before tax increased by 22% to £15,099,000 (2006: £12,411,000) • Profit after tax increased by 27% to £14,151,000 (2006: £11,109,000) • Cash of £12.7 million (2006: £6.3 million) • Coal royalties for the half year of £4.2 million (2006: £5.0 million) Operational Highlights • New royalty package acquired in Canada • Substantial increase in value of strategic quoted interests • Increased cash position • Increased exposure to coal energy and uranium projects • Increase in gold, base metal and PGM projects • The Group remains debt free Commenting on the interim results, Peter Boycott, Chairman of Anglo Pacific,said: "I am pleased to report record results for the first six months of 2007 and goodprogress in expanding the Group's resource projects in all sectors. The Boardexpects steady royalty receipts in the second half of 2007 and with increasingcoking coal prices is optimistic about future royalty flows." "Recent record high prices for oil and gas confirm the Board's positive stanceon uranium and coal energy products. The Board's continued commitment to theresource sector is also reflected in the Group's substantial exposure to baseand precious metals." "The Group's policy remains to pay a substantial proportion of its earnings asdividends to shareholders. I am delighted to report the recent acquisition of apackage of royalties to bolster future cashflows. The Board's strategy remainsto increase the Group's royalty flow profile either by acquisition or by organicdevelopment from its wide range of resource interests and coal explorationproperties." Enquiries: Brian Wides/Peter Boycott/Matthew Tack Anglo Pacific Group PLC 020 7318 6360Stephen Scott/James Harris Scott Harris 020 7653 0030 Anglo Pacific Group PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30th JUNE 2007 CHAIRMAN'S STATEMENT Review and Results for six months ended 30th June 2007 During the first half of 2007, the economies of India and China have continuedto show strong rates of growth and demand for both metals and energy remainedbuoyant. The prices of both coking and steaming coal have risen sharply in thelast few months. Recent reported sales of spot coking coal have been atconsiderably higher levels than the long term contract rates of circa US$100 perton used in the past two years. This price rise is reflected in the Group's coal royalty interests beingindependently valued at 30th June 2007 at £59 million compared to £48 million at31st December 2006. During the first six months of 2007 metal prices reached high and in some casesrecord levels with stockpiles of most metals remaining low. This caused asubstantial strengthening of the mining markets, which were further supported byconsolidation and takeover activity amongst the mining majors. Junior miningmarkets reached new highs in the first quarter of the year, although towards theend of the period prices were more subdued. Uranium prices, however, rose substantially, recently reaching US$135 per lbcompared to US$46 a year ago. Even after taking account of dollar weakness, goldand PGM prices have remained high and the price of oil continues to hold at nearrecord levels. It is against this background that the Group has realised record capital gainsof £11.2 million for the period which together with buoyant royalty receipts hasproduced record earnings of 13.90p per share for the half year. The Group's private mining interests and quoted stakes in mining projects werevalued at 30th June 2007 at £87.1 million compared to £50.2 million a year ago. Furthermore the Group had no borrowings and nearly £13 million of cash in thebank at 30th June 2007. These results again reflect the Group's continuing successful active managementof its quoted and private mining interests. Strategy and Progress The Group's overall corporate strategy remains the same. It is to continue toincrease the total value of the Group's mining interests in order to maximiseshareholder value and develop new royalty flows. In this respect the Group's cash and strategic investments have increased invalue by 29% in the last six months. Together with the recent valuation of theGroup's coal royalty at £59 million, the Group's total assets are now thereforenearly £160 million with no debt. Furthermore, this does not include any excessover cost attributable to the real value of the Group's substantial private coaland other mining interests in British Columbia and Australia. The return on investment over the last four years is equivalent to a compoundrate of over 76% per annum. Anglo Pacific Group PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30th JUNE 2007 CHAIRMAN'S STATEMENT The Group's quoted equity interests disclosed on the LSE, ASX and TSX, whereinitial equity stake disclosure levels are 3%, 5% and 10% respectively, amountto £63 million in nineteen different holdings. The balance of quoted holdings of£22 million is made up of a further thirty incubator investments. The split ofthe Group's strategic interests by commodity is now on the Group's website atwww.anglopacificgroup.com where all the equity disclosures can also be accessed. This Group's policy of maintaining a substantial level of liquidity will enableit to provide finance for smaller early-stage mining developments when required. These opportunities will be at more attractive levels when credit availabilityin the international financial markets is tighter than usual. On 23rd August 2007 the Group announced the acquisition of a package of uraniumroyalty interests in the Athabasca Basin in Canada. The properties covered bythe royalty interests total approximately 4.8 million acres and are currentlyoperated by a number of listed Canadian companies. The Athabasca Basin isconsidered to be highly prospective for uranium exploration and production andcurrently hosts large, high grade uranium mines and deposits. The Group isissuing 3.125 million new shares in consideration for these assets. The group's strategy of paying a substantial proportion of its earnings asdividends to shareholders continues. On 3rd August 2007 a final dividend of 3.75p per share for the year ended 31stDecember 2006 was paid. Shareholders owning 27.5% of the issued share capitalopted to take further shares in the Company under the scrip dividendalternative. The Directors increased their investment in the Group by opting totake shares rather than cash on a substantial proportion of their holdings. As in previous years the Group will announce its interim dividend for the yearending 31st December 2007 in November 2007, when a scrip dividend alternativewill again be available to shareholders. Outlook The Group expects steady royalty flows in the second half of 2007 and isconfident that the recent increases in underlying coking coal prices will bemaintained for some time. Following the recent turmoil in the equity marketsthe outlook for the mining sector is dependent on the demand for metals drivenby the continued expansion of the emerging Chinese and Indian economies. TheBoard remains confident that opportunities will continue to arise for thefurther profitable development of the Group's current and future mininginterests. P.M.BoycottChairman29th August 2007 Anglo Pacific Group PLC CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 30th JUNE 2007 Six months Six months Year ended ended 30th ended 30th 31st December June 2007 June 2006 2006 £'000 £'000 £'000 Royalty income 4,176 5,047 10,472Other operating income 80 145 266Profit on sale of mining and exploration 11,202 8,107 13,322interestsFinance income 204 93 232 15,662 13,392 24,292 Net operating expenses (563) (981) (2,183)Profit before tax 15,099 12,411 22,109 Tax (948) (1,302) (2,811)Profit attributable to equity holders 14,151 11,109 19,298 Basic earnings per share 13.90p 11.06p 19.12p Fully diluted earnings per share 13.90p 10.98p 19.11p Anglo Pacific Group PLC CONSOLIDATED BALANCE SHEET AS AT 30th JUNE 2007 30th June 2007 30th June 2006 31st December 2006 £'000 £'000 £'000 £'000 £'000 £'000 Non-current assetsProperty plant and equipment 835 842 838Coal royalties (at valuation) 59,012 52,661 47,868Mining and exploration 87,081 50,240 67,317interests 146,928 103,743 116,023Current assetsTrade and other receivables 2,659 3,146 1,834Cash at bank 12,726 6,266 9,836 15,385 9,412 11,670 Total assets 162,313 113,155 127,693 Current liabilitiesTaxation 720 538 1,414Trade and other payables 629 588 255Dividends payable 3,818 3,264 - 5,167 4,390 1,669 Non-current liabilitiesDeferred tax 18,641 14,356 14,530 18,641 14,356 14,530 Total liabilities 23,808 18,746 16,199 Capital and reservesattributable to shareholdersShare capital 2,037 2,008 2,032Share premium 12,427 11,575 12,112Coal royalty revaluation 41,583 39,893 35,403reserveInvestment revaluation reserve 37,371 13,741 27,078Share based payment reserve 33 18 27Foreign currency translation 591 (1,410) (1,930)reserveSpecial reserve 632 632 632Retained Earnings 43,831 27,952 36,140 138,505 94,409 111,494 Total equity and liabilities 162,313 113,155 127,693 Anglo Pacific Group PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30th JUNE 2007 Share Share Coal Investment Share Foreign Special Retained Total based capital premium royalty revaluation payment currency reserve earnings equity revaluation reserve reserve translation reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st January 2006 2,005 11,338 41,211 5,180 12 1,321 632 22,361 84,060Coal Royalties: Royalties valuation - - (965) - - (3,089) - - (4,054) movement taken to equity Deferred tax on valuation - - (353) - - 734 - - 381Available-for-sale investments: Valuation movement taken - - - 10,655 - (300) - - 10,355 to equity Deferred tax on valuation - - - (505) - 3 - - (502) Transferred to income - - - (1,589) - - - - (1,589) statement on disposalForeign currency translation - - - - - (79) - - (79)Net income recognised direct - - (1,318) 8,561 - (2,731) - - 4,512into equityProfit for the period - - - - - - - 11,109 11,109Total recognised income and - - (1,318) 8,561 - (2,731) - 11,109 15,621expensesDividends paid - - - - - - - (5,518) (5,518)Scrip Dividend 3 237 - - - - - - 240Equity share options issued - - - - 6 - - - 6Balance at 30th June 2006 2,008 11,575 39,893 13,741 18 (1,410) 632 27,952 94,409Coal Royalties: Royalties valuation - - (4,827) - - 35 - - (4,792) movement taken to equity Deferred tax on valuation - - 337 - - (8) - - 329Available-for-sale investments: Valuation movement taken - - - 17,694 - (276) - - 17,418to equity Deferred tax on valuation - - - (877) - (66) - - (943) Transferred to income - - - (3,480) - - - - (3,480) statement on disposalForeign currency translation - - - - - (205) - - (205)Net income recognised direct - - (4,490) 13,337 - (520) - - 8,327into equityProfit for the period - - - - - - - 8,188 8,188Total recognised income and - - (4,490) 13,337 - (520) - 8,188 16,515expensesDividends paid - - - - - - - - -Issue of share capital on 18 194 - - - - - - 212exercise of optionsScrip Dividend 6 343 - - - - - - 349Equity share options issued - - - - 9 - - - 9Balance at 31st December 2006 2,032 12,112 35,403 27,078 27 (1,930) 632 36,140 111,494 Anglo Pacific Group PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30th JUNE 2007 Share Share Coal Investment Share Foreign Special Retained Total based capital premium royalty revaluation payment currency reserve earnings equity revaluation reserve reserve translation reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Balance at 1st January 2007 2,032 12,112 35,403 27,078 27 (1,930) 632 36,140 111,494Coal Royalties: Royalties valuation - - 8,600 - - 2,545 - - 11,145 movement taken to equity Deferred tax on valuation - - (2,420) - - (680) - - (3,100)Available-for-sale investments: Valuation movement taken - - - 17,972 - 606 - - 18,578 to equity Deferred tax on valuation - - - (781) - 23 - - (758) Transferred to income - - - (6,898) - - - - (6,898) statement on disposalForeign currency translation - - - - - 27 - - 27Net income recognised direct - - 6,180 10,293 - 2,521 - - 18,994into equityProfit for the period - - - - - - - 14,151 14,151Total recognised income and - - 6,180 10,293 - 2,521 - 14,151 33,145expensesDividends paid - - - - - - - (6,460) (6,460)Scrip Dividend 5 315 - - - - - - 320Equity share options issued - - - - 6 - - - 6Balance at 30th June 2007 2,037 12,427 41,583 37,371 33 591 632 43,831 138,505 Anglo Pacific Group PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30th JUNE 2007 Six months Six months Year ended ended 30th ended 30th 31st December June 2007 June 2006 2006 £'000 £'000 £'000Cashflows from operating activitiesProfit before taxation 15,099 12,411 22,109Adjustments for:Interest received (204) (93) (232)Unrealised foreign currency (gain) / loss 27 84 (284)Depreciation of property, plant and equipment 6 5 10(Gain) on disposal of mining and exploration (11,202) (8,107) (13,322)interestsShare based payments 6 6 15 3,732 4,306 8,296 (Increase) / Decrease in trade and other (826) (597) 715receivablesIncrease / (Decrease) in trade and other 374 (6) (340)payablesCash generated from operations 3,280 3,703 8,671Income taxes paid (1,388) (1,798) (2,990)Net cash from operating activities 1,892 1,905 5,681 Cash flows from investing activitiesProceeds on disposal of mining and exploration 21,485 17,637 30,024interestsPurchase of mining and exploration interests (18,366) (16,911) (27,180)Interest received 204 93 232Net cash used in investing activities 3,323 819 3,076 Cash flows from financing activitiesProceeds from issue of share capital - - 212Dividends paid (2,325) (2,255) (4,930)Net cash used in financing activities (2,325) (2,255) (4,718) Net increase in cash and cash equivalents 2,890 469 4,039 Cash and cash equivalents at beginning of 9,836 5,797 5,797period Cash and cash equivalents at end of period 12,726 6,266 9,836 Anglo Pacific Group PLC NOTES TO THE ACCOUNTS 1. Basis of preparation The interim, condensed consolidated financial statements of Anglo Pacific GroupPLC have been prepared on the basis of the accounting policies set out in theGroup's latest annual financial statements for the year ended 31 December 2006.These accounting policies are drawn up in accordance with InternationalAccounting Standards (IAS) and International Financial Reporting Standards(IFRS) as issued by the International Accounting Standards Board and as adoptedby the European Union (EU). The interim financial statements do not constitutestatutory accounts within the meaning of Section 240 of the Companies Act 1985.The financial statements have been reviewed by the Company's auditors. Thecomparative figures for the year ended 31 December 2006 were derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies. Those accounts received an unqualified audit report which did notcontain statements under section 237(2) or (3) of the Companies Act 1985. Theinterim review report is set out on page 12. 2. Non-current Assets (a) Coal Royalty Investments The Company's coal royalty investments comprise the Kestrel and Crinum coalroyalties in Queensland, Australia. The Company commissioned a valuation of thecoal royalties in June 2007, based on a net present value of the pre-taxcashflow discounted at a rate of 7%, which produced a valuation of A$139.3million (£59 million). At present the net royalty income is taxed in Australiaat a rate of 30%. Were the coal royalties to be realised at the revalued amountthere are £6 million (A$14.3 million) of capital losses potentially available tooffset against taxable gains. These losses have been included in the deferredtax computation. In addition, the Company has UK capital tax losses in theregion of £7 million available for offset against capital gains. (b) Mining and Exploration Interests The investments in securities included above represent investments in listed andunlisted equity securities which present the Group with opportunity for returnsthrough dividends and gains on sale. These investments are acquired as part ofthe Group strategy to acquire new royalties and are not held for the purpose oftrading. Gains may be realised where it is deemed appropriate by the InvestmentCommittee. The fair values of these securities are based on quoted marketprices for listed securities and cost for unlisted securities. During theperiod to 30 June 2007 a number of opportunities arose which allowed the Groupto increase its investment holdings, particularly in listed securities. The market value of the quoted Mining and Exploration Interests at 30th June2007 was £85,518,000. The directors' valuation of the unquoted Mining andExploration Interests was £1,922,000. 3. Earnings per ordinary share The earnings per ordinary share is calculated on the Company's profit after taxof £14,151,000 and 101,806,482 shares. Fully diluted earnings per shares iscalculated on a profit after tax of £14,151,000 and 101,823,220 shares. 4. This statement will be sent to shareholders and will be available at theCompany's registered office at 1st Floor Sentinel House, Brent Street, LondonNW4 2EP. Anglo Pacific Group PLC NOTES TO THE ACCOUNTS 5. Segment Information Six months ended 30th June 2007 Royalty Mining Unallocated Total Interests £'000 £'000 £'000 £'000Revenue 4,176 - 80 4,256Operating profit 4,176 - (478) 3,698 Profit on sale of mining and exploration - 11,202 - 11,202interestsInterest received - - 204 204Depreciation - - (5) (5)Tax - - (948) (948)Segment Result 4,176 11,202 (1,227) 14,151 Segment Assets 59,012 87,081 16,220 162,313Segment Liabilities (18,641) - (5,167) (23,808)Net Segment Assets 40,371 87,081 11,053 138,505 Capital Expenditure - - 1 1 Six months ended 30th June 2006 Royalty Mining Unallocated Total Interests £'000 £'000 £'000 £'000 Revenue 5,047 - 145 5,192Operating profit 5,047 - (831) 4,216 Profit on sale of mining and exploration - 8,107 - 8,107interestsInterest received - - 93 93Depreciation - - (5) (5)Tax - - (1,302) (1,302)Segment Result 5,047 8,107 (2,045) 11,109 Segment Assets 52,661 50,240 10,254 113,155Segment Liabilities (14,356) - (4,390) (18,746)Net Segment Assets 38,305 50,240 5,864 94,409 Capital Expenditure - - - - Anglo Pacific Group PLC NOTES TO THE ACCOUNTS 5. Segment Information (continued) Year ended 31st December 2006 Royalty Mining Unallocated Total Interests £'000 £'000 £'000 £'000 Revenue 10,472 - 266 10,738Operating profit 10,472 - (1,907) 8,565 Profit on sale of mining and exploration - 13,322 - 13,322interestsInterest received - - 232 232Depreciation - - (10) (10)Tax - - (2,811) (2,811)Segment Result 10,472 13,322 (4,496) 19,298 Segment Assets 47,868 67,317 12,508 127,693Segment Liabilities (14,530) - (1,669) (16,199)Net Segment Assets 33,338 67,317 10,839 111,494 Capital Expenditure - - 1 1 Anglo Pacific Group PLC INDEPENDENT REVIEW REPORT TO ANGLO PACIFIC GROUP PLC Introduction We have been instructed by the company to review the financial information forthe six months ended 30 June 2007 which comprises the consolidated incomestatement, consolidated balance sheet, consolidated statement of changes inequity, consolidated cash flow statement and the related notes 1 to 5 set out onpages 9 to 11. We have read the other information contained in the interimreport which comprises the Chairman's statement and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. Our responsibilities do not extend to any otherinformation. This report is made solely to the company in accordance with guidance containedin APB Bulletin 1999/4 "Review of Interim Financial Information". Our reviewwork has been undertaken so that we might state to the company those matters weare required to state to them in a review report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the company for our review work, for this report, or forthe conclusion we have formed. Directors' responsibilities The interim report including the financial information contained therein is theresponsibility of, and has been approved by, the directors. They areresponsible for preparing the interim report and that the accounting policiesand presentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of Interim Financial Information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and, based thereon, assessing whetherthe accounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance withInternational Standards of Auditing (UK & Ireland) and therefore provides alower level of assurance than an audit. Accordingly, we do not express an auditopinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2007. GRANT THORNTON UK LLP CHARTERED ACCOUNTANTS London 29th August 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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