A brief update on this coal mining related stock which I have written up before - see categories list to the side of the blog for more details. If the thought of anything to do with coal puts you off then click away now.
In brief they have made a good looking disposal in terms of the price they got for their Imperial Tankers operation.
They expect to receive £26.9 million in cash which does represent about 10% of their market cap. These proceeds are for a business that had turnover of £29.7 million and a book value of £9.5 million and which they estimate made EBITDA of £4 million and net profits of £1.6m in the year to 31 May 2014.
Elsewhere in the statement, which you should probably read if you are interested in this one, they talk about a strategy review to:
"...maximising the quality of future earnings by exiting profit streams that are deemed to represent the lowest risk-weighted returns and weakest prospects for sustainable long term growth whilst strengthening the Group's longer-term position in its core markets.
As the review progresses and the outcome of the current strategic initiatives take shape, the Board will consider the optimal capital structure and distribution policy for the Group, ensuring that they are properly aligned to the long term expectations and requirements of both shareholders and the Group. With regard to the capital that is liberated by the review, consideration will be given to reducing debt, distributing it to shareholders or re-investing it in the business. Any re-investment would be focussed on attractive and value enhancing projects related to the Group's core business activities."
This was all being done on the back of on going price weakness in the coal price and difficulties at their Monkton coking facility. None of which read particularly well but they seem to be in the process of managing the business for cash and the inevitable (?) decline of coal in the energy mix longer term.
So overall a mixed bag which to be honest didn't read that well and I'm a bit surprised the stock isn't off more than about 1% first this morning. Having said that though I guess the valuation of about 5.5x with a 4% yield for next year are probably providing some support?