LONDON (Alliance News) - Anglo Pacific Group PLC on Thursday said it is in a "very strong" position as it swung to a profit thanks to higher commodity prices and a revaluation of coal royalties.
The resources royalty firm posted a pretax profit of GBP18.6 million for the six months to June-end from a GBP3.0 million loss in the same period a year prior.
Revenue from royalties rose 12% to GBP19.1 million, while total portfolio income was up 20% to GBP20.8 million. Its large investment, the Kestrel coal mine in Australia, increased income by 13% to GBP14.2 million.
Net cash was GBP5.2 million at the end of June, from GBP8.1 million at the end of 2017, following dividend payments and investments. Cash from operating activities was GBP14.6 million from GBP16.8 million a year prior.
Anglo Pacific is to review its dividend for 2018 in the first quarter of 2019, with its quarterly payments of 1.625 pence per share unchanged.
Anglo Pacific said it was a period of "significant" growth for the company, with higher commodity prices pushing revenue higher, and it said growing trade issues are not hurting its operations.
The core Kestrel investment did well, it said, though production was hit by a longer than usual longwall changeout. The outlook remains encouraging, and it believes the sale of the mine by Rio Tinto PLC to a new joint venture is a positive development despite Rio Tinto's "very good job".
Elsewhere, its Maracas Machen investment in Brazil was "the standout performer", with vanadium pentoxide production rising 10% year-on-year, and the outlook for the rest of 2018 is positive.
Anglo Pacific said it is overall "very pleased" with its interim performance, and it is very confident going forward, with the company looking to increase its banking facility to fund further acquisitions.
Chief Executive Julian Treger said: "Anglo Pacific has enjoyed a very successful start to 2018 with our overall income continuing to grow principally due to higher commodity prices."
"We have invested USD51.0 million in growth opportunities which complement and diversify our existing portfolio. In the short-term the sale of Kestrel suggests volumes could double in the coming years as the new owners look to maximise their return."
Treger continued: "We have entered the second half of 2018 in a very strong position, with significant liquidity available to us, and we continue to actively pursue and appraise other royalty opportunities to add to the two acquisitions we have completed so far this year."
Shares were 5.7% lower on Thursday at a price of 141.39p each.