StockMarketWire.com - Anglo Pacific Group had a strong first half with further increases in royalty income driven by the performance from its Kestrel royalty, with 95% of sales falling within its land in Q2, combined with higher realised prices.

Highlights include:

- Free cash flow generated in H1 2017 of £18.9m, a 300% increase on the £4.7m in H1 2016 and comfortably in excess of £13.4m generated in FY 2016 This included £3.3m from the Denison financing arrangement, of which £1.7m related to FY 2016. This arrangement generated cash returns of C$0.5m per month on average

- Royalty income in H1 2017 of £16.1m, a 295% increase from £4.1m in H1 2016 and at 82% of the £19.7m earned for 2016 as a whole

- Increase attributable mainly to higher commodity prices, favourable exchange rate and increased mining within the group's private royalty land at Kestrel (88% in H1 2017 and 95% in Q2 2017 vs 38% in H1 2016)

- Record royalty income from Maracas Menchen reflecting strong production and a significant improvement in vanadium prices - H1 2017 average of US$5.46/lbs compared to US$3.15/lbs in H1 2016, and currently in excess of US$9.50/lbs

- Increase in overheads to £3.0m in H1 2017 from £1.8m in the corresponding period, reflecting higher staff costs, including share based payments, and increased investment costs associated with sourcing and appraising royalty transactions

- Adjusted earnings of £12.9m for the first six months of 2017, a 438% increase on the £2.4m equivalent in 2016 translating into adjusted earnings per share of 7.44p (H1 2016: 1.43p)

Chief executive Julian Treger said: "Anglo Pacific has had a very strong start to 2017, which has seen us add to our portfolio with the Denison financing arrangement, report significant further increases in royalty revenue, and become debt free.

"This gave us the confidence to implement the payment of our dividend on a quarterly basis, to match the timing of our quarterly revenue, and also to accelerate the timing of dividend payments post declaration.

"Mining at Kestrel is now firmly back to within the Group's private royalty land. It is pleasing to see that this increased volume in mined coal that is subject to the Group's royalty has coincided with a strong rebound in the coking coal price.

"This, along with the contribution from the rest of the portfolio and the recent Denison financing arrangement, has seen us post a doubling of income over the last two years and a similar outcome is expected this year.

"We have now repaid all of our borrowings, including the amounts drawn down as part of the Denison transaction, and have a fully covered dividend.

"The Group has ready access to between US$30.0-US$40.0m of cash and borrowing facilities for further royalty investments, and this is very much the focus for the second half of the year."




At 9:56am: [LON:APF] Anglo Pacific Group PLC share price was -0.5p at 119p



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