Wednesday’s news: Anglo Asian and Strix interims and Games Workshop, update

Anglo Asian Mining (AIM All-Share, Market capitalisation: £197m, 172p and 6.5% of JIC Portfolio and 16.2% of JIC Top 10):

H1 2019 results

Conclusion: It looks like it has made solid progress in H1 2019.  Pre-tax profits rose by 27% to $10.3m and net cash has increased from $6.1m at 31st December to $20.4m at 30th June. It covers its geological exploration programme which it describes as highly encouraging. More concrete news on this will be helpful when it comes. The best news, which demonstrates both the decent results but also its confidence in the future, is the 17.7% increase in the interim dividend to 3.5 cents per share. I think that can be taken as an indication of the likely increase for the full year, suggesting at least 7.0 cents or 5.7p. The share price has done well, helped by the possibility of a bid for the company, (which still rumbles on in the background), which means the stock is on a prospective dividend yield of 3.3%. I have ranked it Medium Risk/High Reward (for me, a 5.0% target weighting) and see no reason to change that. Happy Holder!

Highlights

¬∑¬†¬†¬†¬†Continued improvement in H1 2019 total production expressed as gold equivalent ounces (“GEOs”) with a seven per cent. year-on-year (“y-o-y”) increase to 39,905 GEOs (H1 2018: 37,349 GEOs):

o    Gold production totalled 34,349 ounces (H1 2018: 33,255 ounces)

o    Copper production of 963 tonnes (H1 2018: 587 tonnes)

o    Silver production totalled 84,586 ounces (H1 2018: 84,785 ounces)

·      Gold bullion sales in H1 2019 of 26,588 ounces (H1 2018: 25,778 ounces) completed at the same average price of $1,319 per ounce as H1 2018

·      All-in sustainingcost of gold production of $603 per ounce (H1 2018: $543 per ounce)

·      Total production target for FY 2019 maintained at between 82,000 and 86,000 GEOs when calculated using metal prices at 1 January 2019

·      Growth strategy remains on track with successful H1 2019 results from the geological exploration programme announced on 8 August 2019, continuing to confirm significant upside potential:

o    Significant progress on ZTEM targets at Gedabek

o    Mineralisation at depth confirmed in an area below an existing adit of the Gosha underground mine

o    Very promising drill programme results at Ordubad

Screenshot 2019-09-18 at 07.57.28

 

Strix (KETL.L, Aim 100, Market cap. £313m, 164p, 4.2% of JIC Portfolio and 9.1% of JIC Top 10): 

FINANCIAL SUMMARY

Adjusted results1
H1 2019 H1 2018 Change
£m £m %3
Revenue 43.9 42.9 +2.5%
Gross profit 16.7 16.3 +2.5%
EBITDA2 14.9 14.8 +0.7%
Operating profit 12.2 11.9 +2.1%
Profit before tax 11.5 11.0 +4.6%
Profit after tax 10.9 10.6 +2.6%
Net debt 33.4 37.9 +11.9%4
Net cash generated from operating activities 10.9 15.2 -28.4%5
Basic earnings per share 5.7p 5.6p +2.6% 
Diluted earnings per share 5.4p 5.3p +1.8%
Interim dividend per share 2.6p 2.3p +13.0% 

Conclusion: In its heading, the company describes the results as ‚ÄúAnother resilient trading performance‚ÄĚ. That sounds about right. This will never be the most exciting growth company, but it throws off cash, (hence the fall in net debt to ¬£33.4m from ¬£37.9m) and should prove defensive in a market¬†pull back. The fall in net cash generated was due to the acquisition of HaloSource and increased working capital. It‚Äôs good to see the 13.0% increase in the interim dividend putting it on course to achieve its aim of a 10.0% increase for the full year. A¬†full year¬†dividend of 7.7p puts it on an attractive dividend yield of 4.7%. I have it as Low Risk/Medium Return, (suggesting a 5.0% weighting for me). Worthy but dull. Happy holder!

Screenshot 2019-09-18 at 07.57.18

 

 

Games Workshop; (GAW.L, FTSE Mid 250, Market Cap £1519m, 4674p, 3.3 of JIC Portfolio and 0.0 of JIC Top 10)

A short and sweet trading update:

“Games Workshop Group PLC announces today that trading is in line with the Board’s expectations. Cash generation also remains strong.

The Board has also today declared a dividend of 35 pence per share. This is in line with the Company’s policy to distribute truly surplus cash. This will be paid on 8 November 2019 for shareholders on the register at 27 September 2019, with an ex-dividend date of 26 September 2019. The last date for elections for the dividend¬†re-investment¬†plan is 11 October 2019.”

Conclusion: Good to see another dividend on the way. I rank this as Low Risk/Medium return, (suggesting for me, a 5.0% target weight). I am currently at 3.3% having sold some shares at £51 in June. On a prospective yield of over 3.2%, very strong cash flow and with likely upgrades to come, I am tempted to buy back what I sold and increase my weighting towards my target. I suspect the shares are likely to go through the £ £51 I sold at previously. Very Happy Holder!

 

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