Anglo Pacific Group increases dividend despite fall in profits

Anglo Pacific Group increased its final dividend by 4.5 per cent to 5.75p per share despite a fall in annual operating profits.

Anglo Pacific Group increased its final dividend by 4.5 per cent to 5.75p per share despite a fall in annual operating profits.

The natural resources company reported £9.3m in operating profits, a 70% drop from £31.8m the previous year.

Results were hit by production problems and delays at the firm's Kestrel coking coal mine in Australia due to a longwall changeover and adverse weather during the period. Commissioning setbacks also impacted output.

Despite the difficulties, Acting Chairman Brian Wides said the group achieved solid performance throughout the year.

He said a rise in coal royalty rates in the Australian state of Queensland offset impact of weaker commodity prices.

The Queensland Government raised royalty rates by 25% to 12.5% above AU$100 and 50% to 15% above AU$150 sales price per tonne. The company believes it will directly benefit future sales from the Kestrel mine.

The group subsequently acquired two new royalty interests during the year, bringing its total up to 22.

"We have been particularly encouraged by the progress across a number of the Group's development royalties, which we believe will bring forward future royalty cash flows," Wides said.

Royalty entitlements for the year, however, came to £15.2m, down from £35m the year earlier.

Anglo's cash position was at £24m by the end of the year, a drop from £32.2m in 2011.

The firm expects results to pick up this year as production at Kestrel recovers and the world economy improves in markets including China, the US, Japan, India and South Korea.

"This confidence has produced better mining markets and a more optimistic outlook for metal prices and in particular iron ore," the company said.

"As Rio Tinto continues to progress with the Kestrel expansion project, we remain confident of a recovery in production from Kestrel in 2013.

"This together with, the substantial increase in royalty rates announced by the Queensland Government in September last year [...] should impact positively on royalty receipts from Kestrel in 2013."

Shares rose 2.39% to 267.50p at 9:34 Wednesday.

RD

Recommended

Which assets will benefit as the “jam tomorrow” bubble pops?
Investment strategy

Which assets will benefit as the “jam tomorrow” bubble pops?

With tech stocks, cryptocurrencies and many other “long duration” investments crashing hard, the “jam tomorrow” bubble looks to be bursting. John Step…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022

Most Popular

Shareholder capitalism: why we must return power to listed companies’ ultimate owners
Investment strategy

Shareholder capitalism: why we must return power to listed companies’ ultimate owners

Under our system of shareholder capitalism it's not fund managers, it‘s the individual investors – the company's ultimate owners – who should be telli…
24 Jan 2022
Three innovative Asian stocks to buy now
Share tips

Three innovative Asian stocks to buy now

Professional investor Fay Ren of the Cerno Pacific Fund highlights three of her favourite Asian stocks to buy now
24 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022