RE: Q3 Results30 Apr 2021 09:41
I would expect Simon (IC) to update his target price on the back of these Q3 results. This was part of his update in Feb 21;
First-half results this week highlight these factors. Buoyed by 74 per cent increase in its average basket price to US$3,184 per ounce, Sylvania’s first half post-tax profit of US$40m was up 69 per cent higher year-on-year on 44 per cent higher revenue of US$85m. Net cash doubled to US$67m and is set to hit US$83m by 30 June 2021 after factoring in the payment of April’s US$10.7m (3.75p a share) windfall dividend.
On this basis, the £320m market capitalisation company is rated on a miserly price/earnings (PE) ratio of 4.4. Strip out forecast net cash and the cash-adjusted PE ratio is only 3.5. If that’s not a compelling enough valuation, Liberum expects net cash to swell to US$188m (£134m) by 30 June 2022 after factoring in net profits of US$117m (£83m) in the 2021/22 financial year, implying the cash-adjusted PE ratio drops to 2.2.
I would expect his update after market closes today in time for reopening on Tuesday. GLA