Coverage in today's Independent25 Sep 2008 22:58
Energybuild Our view: BUY Share price: 22p (+2.5p)
Here is a story to warm the cockles of every Welshman's heart: coal mining in the principality is thriving. Yes, you read it correctly, coal coal mining is flourishing – at least if Energybuild's full-year results, published yesterday, are anything to go by.
The Neath-based group posted a pre-tax profit of £954,000, an improvement on last year's loss, and the stock jumped by 12.8 per cent after the announcement. It is true that burning coal for power is one of the worst ways you can pollute the environment but, for investors without such qualms, the group could well be a banker.
The Government is increasingly keen on securing Britain's energy supplies and coal is the cheapest and most plentiful way of doing it, which cannot be bad for Energybuild and its investors.
Analysts at house broker Panmure Gordon are keen: they argue that the next year is an "exciting" time for the company. They suggest that its net profit will rise to £3.5m and its share price will leap to 41p, just about double yesterday's opening level.
There are more established coal groups such as UK Coal and AHT, both of which are bigger and therefore safer. However, the sector is on the up and with production targets of 750,000 tonnes by 2011, Energybuild is a decent bet for those looking for a growth story. BUY.