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Research: Metals & Mining
Wheaton is to release its Q321 results on Thursday 4 November, after the market close in Toronto. Ahead of the publication of its actual results, we have revised our earnings forecast for the quarter to reflect actual versus estimated precious metals prices (especially palladium, which has fallen from a high in the quarter of US$2,859/oz on 12 July to US$1,811/oz currently) and a slightly delayed ramp in production from lingering coronavirus-induced disruptions at Salobo in Brazil.
Wheaton Precious Metals |
Honing Q321 forecasts |
Q321 results preview |
Metals & mining |
8 October 2021 |
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Wheaton Precious Metals is a research client of Edison Investment Research Limited |
Wheaton is to release its Q321 results on Thursday 4 November, after the market close in Toronto. Ahead of the publication of its actual results, we have revised our earnings forecast for the quarter to reflect actual versus estimated precious metals prices (especially palladium, which has fallen from a high in the quarter of US$2,859/oz on 12 July to US$1,811/oz currently) and a slightly delayed ramp in production from lingering coronavirus-induced disruptions at Salobo in Brazil.
Year end |
Revenue (US$m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
861.3 |
242.7 |
54 |
36 |
68.9 |
1.0 |
12/20 |
1,096.2 |
503.2 |
112 |
42 |
33.2 |
1.1 |
12/21e |
1,266.6 |
612.8 |
136 |
56 |
27.4 |
1.5 |
12/22e |
1,621.0 |
922.6 |
205 |
77 |
18.2 |
2.1 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Silver production makes up for gold
All told, the changes to our forecasts for the rest of FY21 have reduced our group production estimate by 10koz gold equivalent (or only 1.3%) for the full year (using WPM’s standardised metals’ prices) to 748koz AuE. Despite our forecast for gold production being slightly below the bottom of the guided range, this is counterbalanced by a silver production forecast that is above the top of the range, such that gold equivalent production is on track to meet almost exactly the middle of the company’s guided range of 720–780koz AuE for the full year (see Exhibit 4).
FY21 to mark start of a period of production growth
After FY21 (748koz AuE estimated), gold equivalent production is expected by Wheaton to increase by c 8.3% to 810koz per year AuE in the period FY22–25 and by 11.0% (from FY21) to 830koz per year AuE in the five-year period FY26–30.
Valuation: C$78.32/share
Changes to our precious metal pricing assumptions reduced our EPS forecast for FY21 by 5.0c (or 3.5%), while changes to our output assumptions reduced it by another 2.0c (or 1.4%). In normal circumstances and assuming no material purchases of additional streams in the foreseeable future (which we think unlikely), we forecast a value per share for WPM of US$61.99 or C$78.32 or £45.66 in FY23 (cf US$64.92 previously). In the meantime, WPM’s shares are trading on near-term financial ratios that are cheaper than those of its peers on at least 72% of common valuation measures regardless of whether Edison or consensus forecasts are used. Hence, if WPM’s shares were to trade at the same level as the average of its peers, then we calculate that its year 1 share price should be US$45.74 (C$57.79 or £33.69), based on our forecasts for FY21. Alternatively, if precious metals return to favour and WPM to a premium rating, we believe an US$84.06 (C$106.22 or £78.24) per share valuation is still achievable (see page 5).
Q321 forecast adjustments
Wheaton is to release its Q321 results on Thursday 4 November after the market close in Toronto. A conference call to discuss the results will then be held on Friday 5 November, starting at 11:00am ET (8:00am PT, 3:00pm GMT).
Ahead of the publication of the actual results, we have adjusted our forecasts for the quarter to reflect both updated commodity prices plus a number of operating considerations that we understand to have been the case at Wheaton’s partners’ mines. A summary of the commodity price changes (which have also affected our forecasts for Q421), is as follows:
Exhibit 1: Metal price changes vs prior forecasts
Metal |
Prior Q321 forecast |
Actual Q321 average price |
Change |
Current spot price |
Change (spot vs Q321) |
Gold (US$/oz) |
1,792 |
1,790 |
-0.1 |
1,749 |
-2.3 |
Silver (US$/oz) |
24.59 |
24.30 |
-1.2 |
22.23 |
-8.5 |
Palladium (US$/oz) |
2,623 |
2,452 |
-6.5 |
1,811 |
-26.1 |
Cobalt (US$/lb) |
23.15 |
23.54 |
+1.7 |
24.21 |
+2.8 |
Average |
-1.5 |
-8.5 |
Source: Edison Investment Research, Bloomberg. Note: Priced on 6 October 2021.
A summary of the operating conditions we understand to have been the case at Wheaton’s partners’ mines is as follows:
■
After a review in Q121 that limited equipment availability, we had previously expected throughput at Salobo to increase as maintenance workshops ramped up quickly at end-Q2/early Q3. In the event, we believe that the persistence of the coronavirus in Brazil (including the newer delta variant and a spike in infections in September) may have delayed the ramp-up, with the mine reaching budgeted throughput rates only towards the end of the quarter. In addition (and partially as a consequence), we suspect that sales of metal at Salobo (which were higher than production in Q1 and Q2) may now have moved to normalise with respect to output.
■
Despite signing an agreement with the new Greek government in March that would open the way for restarting major mining investment at its Skouries, Olympias and Stratoni projects (which have been stalled for years over licensing and environmental concerns), we understand that Eldorado’s Stratoni mine in particular (which had contributed 1.1% to sales in H121) remained offline in Q321.
By contrast, we do not expect the recent incident at the Totten mine at Sudbury, in which 39 miners were trapped underground after a scoop bucket detached and blocked the main transport shaft, to have had any material or longstanding effect on either production or sales. In addition, we had already anticipated a modest tapering of performance at Antamina and Penasquito (to do with moving the primary crusher and pit sequencing, respectively) after each reported unexpectedly strong performances in H1.
We have also adjusted our general and administrative (G&A) charge for the quarter to reflect WPM’s shares finishing the quarter at a price of C$47.68 (or US$37.60) compared with US$44.04 at the end of the previous quarter – a decline of US$6.43 – which alters our estimate of stock-based G&A (see our note Solid Q221 results set up H221, published on 18 August 2021, for more details).
In the light of the above developments, our updated forecasts for WPM for FY21 are as shown in Exhibit 2. The forecasts assume operations will continue throughout the remainder of the year without major interruptions. Apart from precious metals prices, the principal remaining risk to our forecasts relates to the extent to which sales differ from production and therefore the extent to which inventory (in the form of ounces produced but not yet delivered to WPM) either increases or decreases throughout the remainder of the year.
Exhibit 2: WPM FY21 forecast, by quarter*
US$000s |
FY20 |
Q121 |
Q221 |
Q321e |
Q321e |
Q421e |
Q421e |
FY21e |
FY21e |
Silver production (koz) |
22,892 |
6,754 |
6,720 |
5,939 |
5,757 |
5,955 |
5,773 |
25,004 |
25,368 |
Gold production (oz) |
367,419 |
77,733 |
90,290 |
88,175 |
85,735 |
95,225 |
95,225 |
348,983 |
351,423 |
Palladium production (koz) |
22,187 |
5,769 |
5,301 |
5,561 |
5,561 |
5,561 |
5,561 |
22,192 |
22,192 |
Cobalt production (klb) |
1,161 |
380 |
525 |
390 |
525 |
400 |
2,331 |
2,591 |
|
Silver sales (koz) |
19,232 |
6,657 |
5,600 |
5,923 |
5,741 |
5,955 |
5,773 |
23,771 |
24,135 |
Gold sales (oz) |
369,553 |
75,104 |
90,090 |
87,159 |
78,212 |
95,192 |
95,192 |
338,598 |
347,545 |
Palladium sales (oz) |
20,051 |
5,131 |
3,869 |
5,539 |
5,539 |
5,539 |
5,539 |
20,078 |
20,078 |
Cobalt sales (klb) |
132.3 |
395 |
525 |
400 |
525 |
400 |
1,317 |
1,577 |
|
Avg realised Ag price (US$/oz) |
20.78 |
26.12 |
26.69 |
24.59 |
24.30 |
23.72 |
22.23 |
24.87 |
25.29 |
Avg realised Au price (US$/oz) |
1,767 |
1,798 |
1,801 |
1,792 |
1,790 |
1,787 |
1,749 |
1,783 |
1,794 |
Avg realised Pd price (US$/oz) |
2,183 |
2,392 |
2,797 |
2,623 |
2,452 |
2,519 |
1,811 |
2,326 |
2,569 |
Avg realised Co price (US$/lb) |
20.90 |
19.82 |
23.15 |
17.65 |
23.58 |
18.16 |
18.91 |
22.38 |
|
Avg Ag cash cost (US$/oz) |
5.28 |
6.33 |
6.11 |
6.23 |
6.15 |
6.21 |
6.09 |
6.18 |
6.23 |
Avg Au cash cost (US$/oz) |
426 |
450 |
450 |
430 |
433 |
428 |
428 |
440 |
439 |
Avg Pd cash cost (US$/oz) |
389 |
427 |
503 |
472 |
441 |
453 |
326 |
418 |
461 |
Avg Co cash cost (US$/lb) |
4.98 |
4.41 |
4.17 |
4.24 |
4.24 |
4.36 |
4.40 |
4.32 |
|
Sales |
1,096,224 |
324,119 |
330,393 |
328,533 |
299,971 |
337,705 |
312,129 |
1,266,612 |
1,320,750 |
Cost of sales |
|||||||||
Cost of sales, excluding depletion |
266,763 |
78,783 |
78,445 |
79,247 |
73,259 |
82,502 |
79,415 |
309,902 |
318,978 |
Depletion |
243,889 |
70,173 |
70,308 |
68,995 |
63,599 |
77,390 |
75,422 |
279,502 |
286,866 |
Total cost of sales |
510,652 |
148,956 |
148,753 |
148,242 |
136,858 |
159,892 |
154,837 |
589,404 |
605,843 |
Earnings from operations |
585,572 |
175,164 |
181,640 |
180,291 |
163,113 |
177,813 |
157,292 |
677,207 |
714,906 |
Expenses and other income |
|||||||||
– General and administrative** |
65,698 |
11,971 |
18,465 |
16,169 |
12,765 |
16,101 |
15,891 |
59,092 |
62,705 |
– Foreign exchange (gain)/loss |
0 |
0 |
|||||||
– Net interest paid/(received) |
16,715 |
1,573 |
1,357 |
1,240 |
1,240 |
1,137 |
1,147 |
5,316 |
5,307 |
– Other (income)/expense |
(387) |
420 |
136 |
556 |
556 |
||||
Total expenses and other income |
82,026 |
13,964 |
19,958 |
17,408 |
14,004 |
17,238 |
17,038 |
64,964 |
68,568 |
Earnings before income taxes |
503,546 |
161,199 |
161,682 |
162,882 |
149,109 |
160,576 |
140,254 |
612,243 |
646,338 |
Income tax expense/(recovery) |
211 |
67 |
56 |
250 |
250 |
250 |
250 |
623 |
623 |
Marginal tax rate (%) |
0.0 |
0.0 |
0.0 |
0.2 |
0.2 |
0.2 |
0.2 |
0.1 |
0.1 |
Net earnings |
503,335 |
161,132 |
161,626 |
162,632 |
148,859 |
160,326 |
140,004 |
611,620 |
645,715 |
Average no. shares in issue (000s) |
448,964 |
449,509 |
450,088 |
450,271 |
450,271 |
450,271 |
450,271 |
450,035 |
450,035 |
Basic EPS (US$) |
1.12 |
0.358 |
0.359 |
0.361 |
0.331 |
0.356 |
0.311 |
1.36 |
1.43 |
Diluted EPS (US$) |
1.12 |
0.358 |
0.358 |
0.360 |
0.330 |
0.355 |
0.310 |
1.36 |
1.43 |
DPS (US$) |
0.42 |
0.13 |
0.14 |
0.15 |
0.15 |
0.15 |
0.14 |
0.56 |
0.57 |
Source: WPM, Edison Investment Research. Note: *Excluding impairments and exceptional items. **Forecasts now include stock-based compensation costs. Totals may not add up owing to rounding.
Readers should note that, consistent with past practice, for the purposes of FY21 we are assuming production and sales are closely aligned and there is little or no change in the level of ounces produced but not yet delivered. Within this context, our basic EPS forecast of US$1.36/share for FY21 is towards the bottom of the range of analysts’ estimates of US$1.36–1.58/share (source: Refinitiv, 6 October 2021).
Exhibit 3: WPM FY21e consensus EPS forecasts (US$/share), by quarter
Q121 |
Q221 |
Q321e |
Q421e |
Sum Q1–Q421e |
FY21e |
|
Edison forecasts |
0.358 |
0.359 |
0.331 |
0.311 |
1.359 |
1.36 |
Mean consensus |
0.358 |
0.359 |
0.38 |
0.39 |
1.487 |
1.48 |
High consensus |
0.358 |
0.359 |
0.42 |
0.46 |
1.597 |
1.58 |
Low consensus |
0.358 |
0.359 |
0.33 |
0.32 |
1.367 |
1.36 |
Source: Refinitiv, Edison Investment Research. Note: As at 6 October 2021.
In the meantime, our basic EPS forecast of US$2.05/share for FY22 (cf US$2.14/share previously) compares with a consensus of US$1.56/share within a range of US$0.57–2.14/share (source: Refinitiv, 6 October 2021). In this case, our estimate is, once again, predicated on an average gold price during the year of US$1,892/oz and an average silver price of US$30.78/oz, which assumes, among other things, the silver price will revert to the long-term correlation that it has exhibited with gold since the latter was demonetised in 1971. If both metals remain at current levels (US$22.23/oz Ag and US$1,749/oz Au at the time of writing), our forecast for WPM’s EPS in FY22 then moderates to US$1.48 per share and our forecast for its DPS to US$0.64/share (from US$0.77 current FY22 DPS forecast).
FY21 and five- and 10-year guidance
At the time of its Q420/FY20 results, WPM provided production guidance of 720–780koz AuE for FY21 and five-year average (2021–25) production guidance of 810,000oz AuE per year and maiden 10-year average (2021–30) guidance of 830,000oz AuE per year. This compares with our updated forecasts, as follows:
Exhibit 4: WPM precious metals production – Edison forecasts vs guidance
FY21e |
*FY22–25 average |
FY26–30 average |
|
Previous Edison forecast |
|||
Silver production (Moz) |
25.4 |
||
Gold production (koz) |
351.4 |
||
Cobalt production (klb) |
2,591 |
||
Palladium production (koz) |
22.2 |
||
Gold equivalent (koz) |
758 |
824 |
804 |
Current Edison forecast |
|||
Silver production (Moz) |
25.0 |
||
Gold production (koz) |
349.0 |
||
Cobalt production (klb) |
2,331 |
||
Palladium production (koz) |
22.2 |
||
Gold equivalent (koz) |
748 |
819 |
804 |
WPM guidance |
|||
Silver production (Moz) |
22.5–24.0 |
||
Gold production (koz) |
370–400 |
||
Cobalt & palladium production (koz AuE) |
40–45 |
||
Palladium production (koz) |
N/A |
||
Gold equivalent (koz) |
720–780 |
810 |
830 |
Source: WPM, Edison Investment Research forecasts. Note: *Edison forecasts include a contribution from Salobo III from FY23e and Rosemont from FY25e.
WPM’s updated five-year guidance and its 10-year guidance are based on standardised pricing assumptions of US$1,800/oz gold (Au), US$25.00/oz silver (Ag), US$2,300/oz palladium (Pd) and US$17.75/lb cobalt (Co). Of note in this context is an implied gold/silver ratio of 72.0x, which compares with its current ratio of 78.7x and a long-term average of 61.5x since gold was demonetised in August 1971.
Readers will note that our FY21 silver production forecast remains above the top end of WPM’s guidance range. After producing 13.5Moz Ag in H121, WPM’s mines will only be required to produce at a rate of 5.3Moz Ag per quarter for the remaining two quarters of the year to achieve the top end of WPM’s guidance range of 22.5–24.0Moz Ag for FY21. This compares with a long-term average quarterly production rate of 6.6Moz per quarter since Q112. Conversely, our gold production forecast remains slightly below the bottom end of WPM’s guidance range. After producing 168.0koz Au in H121, WPM’s mines would have to produce at a rate of 101.0koz Au per quarter for the remaining two quarters of the year to achieve the bottom end of WPM’s guidance range of 370–400koz Au for FY21. While this is certainly possible (WPM’s gold mines produced at an average rate of 102.4koz per quarter in the period Q318–Q419), we think it may prove demanding, given the strike action at Sudbury in Q3 (see our note, Solid Q221 results set up H221, published on 18 August 2021) and the delay in Salobo’s recovery from lingering coronavirus-induced disruptions, in particular. Self-evidently, however, at the standardised prices indicated, our gold equivalent production forecast of 748koz gold equivalent (AuE) is close to the middle of WPM’s guidance of 720–780koz AuE.
Otherwise, readers will note that our (updated) production forecasts are within 3.1% of WPM’s guidance for the period FY22–30.
Valuation
Excluding FY04 (part-year), WPM’s shares have historically traded on an average P/E multiple of 30.0x current year basic underlying EPS, excluding impairments (cf 27.4x Edison or 25.4x Refinitiv consensus FY21e, see Exhibit 6).
Exhibit 5: WPM’s historical current year P/E multiples, 2005–20 |
Source: Edison Investment Research |
Applying this 30.0x multiple to our EPS forecast of US$2.06 in FY23 (previously US$2.16) would ordinarily imply a potential value per share for WPM of US$61.99 or C$78.32 in that year (cf US$64.92 or C$81.86 previously). However, the graph above suggests the current year multiple has been on a broadly upward trend between FY12 and FY19, on which basis we would argue that a multiple in excess of 40x (as evidenced by FY18 and FY19) could be supported in the event of a return to favour of precious metals and precious metals stocks (not least given the fact that these years were not subject to the extraordinary trials and tribulations experienced in FY20). In this case, applying a 40.7x earnings multiple (the average of FY18, FY19 and FY20) to our updated EPS forecast of US$2.06 in FY23 implies a potential value per share for WPM of US$84.06 or C$106.22 in that year (cf US$88.03 or C$111.24 previously). Note this analysis implicitly assumes metals prices in FY24 would be experiencing the same sort of increases relative to FY23 that they did in FY20 relative to FY19 and the average multiple would probably then contract again in FY24 as EPS ‘catch up’ with the share price. Even at such share price levels, however, a multiple of over 40.7x would put WPM’s shares on little more than peers such as Franco-Nevada (currently trading on 36.08x current year earnings, see Exhibit 6).
In the meantime, from a relative perspective, it is notable that WPM has a lower valuation than the average of its royalty/streaming ‘peers’ on eight out of nine valuation measures if our forecasts are used or seven out of nine valuation measures if consensus forecasts are used. On an individual basis, WPM is cheaper than its peers on 83% (30 out of 36) of the valuation measures used in Exhibit 6 if our estimates are adopted or 72% (26 out of 36) of the same valuation measures if consensus forecasts are adopted. Among other things, this could possibly indicate the market has more conservative precious metal pricing expectations than we do in FY22 and FY23, in particular.
Exhibit 6: WPM comparative valuation vs a sample of operating and royalty/streaming companies
P/E (x) |
Yield (%) |
P/CF (x) |
|||||||
Year 1 |
Year 2 |
Year 3 |
Year 1 |
Year 2 |
Year 3 |
Year 1 |
Year 2 |
Year 3 |
|
Royalty companies |
|||||||||
Franco-Nevada |
36.1 |
34.9 |
33.8 |
0.9 |
0.9 |
0.9 |
24.9 |
23.9 |
23.0 |
Royal Gold |
22.4 |
24.4 |
23.6 |
1.3 |
1.3 |
1.3 |
12.7 |
13.8 |
13.6 |
Sandstorm Gold |
32.2 |
27.1 |
38.6 |
0.0 |
0.0 |
0.0 |
12.9 |
12.0 |
15.6 |
Osisko |
30.1 |
27.3 |
23.5 |
1.5 |
1.4 |
1.5 |
16.7 |
14.6 |
11.9 |
Average |
30.2 |
28.4 |
29.9 |
0.9 |
0.9 |
0.9 |
16.8 |
16.1 |
16.0 |
WPM (Edison forecasts) |
27.4 |
18.2 |
18.0 |
1.5 |
2.1 |
2.2 |
18.4 |
13.6 |
13.4 |
WPM (consensus) |
25.4 |
22.6 |
22.4 |
1.5 |
1.7 |
1.9 |
17.9 |
16.6 |
15.7 |
Implied WPM share price (US$)* |
41.01 |
58.23 |
61.71 |
62.19 |
84.56 |
90.33 |
34.01 |
43.90 |
44.43 |
Source: Refinitiv, Edison Investment Research. Note: Peers priced on 6 October 2021. *Derived using Edison forecasts and average consensus multiples.
Exhibit 7: Financial summary
US$'000s |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
2023e |
||
Dec |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||||
Revenue |
|
|
891,557 |
843,215 |
794,012 |
861,332 |
1,096,224 |
1,266,612 |
1,621,004 |
1,648,167 |
Cost of Sales |
(254,434) |
(243,801) |
(245,794) |
(258,559) |
(266,763) |
(309,902) |
(330,648) |
(343,380) |
||
Gross Profit |
637,123 |
599,414 |
548,218 |
602,773 |
829,461 |
956,710 |
1,290,356 |
1,304,787 |
||
EBITDA |
|
|
602,684 |
564,741 |
496,568 |
548,266 |
763,763 |
897,618 |
1,231,265 |
1,245,695 |
Operating Profit (before amort. and except.) |
|
|
293,982 |
302,361 |
244,281 |
291,440 |
519,874 |
618,116 |
921,679 |
928,547 |
Exceptionals |
(71,000) |
(228,680) |
245,715 |
(156,608) |
4,469 |
5,368 |
0 |
0 |
||
Other |
(4,982) |
8,129 |
(5,826) |
217 |
387 |
(556) |
0 |
0 |
||
Operating Profit |
218,000 |
81,810 |
484,170 |
135,049 |
524,730 |
622,928 |
921,679 |
928,547 |
||
Net Interest |
(24,193) |
(24,993) |
(41,187) |
(48,730) |
(16,715) |
(5,316) |
965 |
2,258 |
||
Profit Before Tax (norm) |
|
|
269,789 |
277,368 |
203,094 |
242,710 |
503,159 |
612,799 |
922,644 |
930,805 |
Profit Before Tax (FRS 3) |
|
|
193,807 |
56,817 |
442,983 |
86,319 |
508,015 |
617,611 |
922,644 |
930,805 |
Tax |
1,330 |
886 |
(15,868) |
(181) |
(211) |
(623) |
(1,000) |
(1,000) |
||
Profit After Tax (norm) |
266,137 |
286,383 |
181,400 |
242,746 |
503,335 |
611,620 |
921,644 |
929,805 |
||
Profit After Tax (FRS 3) |
195,137 |
57,703 |
427,115 |
86,138 |
507,804 |
616,988 |
921,644 |
929,805 |
||
Average Number of Shares Outstanding (m) |
430.5 |
442.0 |
443.4 |
446.0 |
448.7 |
450.0 |
450.3 |
450.3 |
||
EPS - normalised (c) |
|
|
62 |
63 |
48 |
54 |
112 |
136 |
205 |
206 |
EPS - normalised and fully diluted (c) |
|
62 |
63 |
48 |
54 |
112 |
136 |
199 |
201 |
|
EPS - (IFRS) (c) |
|
|
45 |
13 |
96 |
19 |
113 |
137 |
205 |
206 |
Dividend per share (c) |
21 |
33 |
36 |
36 |
42 |
56 |
77 |
83 |
||
Gross Margin (%) |
71.5 |
71.1 |
69.0 |
70.0 |
75.7 |
75.5 |
79.6 |
79.2 |
||
EBITDA Margin (%) |
67.6 |
67.0 |
62.5 |
63.7 |
69.7 |
70.9 |
76.0 |
75.6 |
||
Operating Margin (before GW and except.) (%) |
33.0 |
35.9 |
30.8 |
33.8 |
47.4 |
48.8 |
56.9 |
56.3 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
6,025,227 |
5,579,898 |
6,390,342 |
6,123,255 |
5,755,441 |
5,592,969 |
5,451,383 |
5,919,235 |
Intangible Assets |
5,948,443 |
5,454,106 |
6,196,187 |
5,768,883 |
5,521,632 |
5,356,263 |
5,214,677 |
5,682,529 |
||
Tangible Assets |
12,163 |
30,060 |
29,402 |
44,615 |
33,931 |
34,451 |
34,451 |
34,451 |
||
Investments |
64,621 |
95,732 |
164,753 |
309,757 |
199,878 |
202,255 |
202,255 |
202,255 |
||
Current Assets |
|
|
128,092 |
103,415 |
79,704 |
154,752 |
201,831 |
545,740 |
1,265,485 |
1,355,499 |
Stocks |
1,481 |
1,700 |
1,541 |
43,628 |
3,265 |
2,274 |
2,910 |
2,959 |
||
Debtors |
2,316 |
3,194 |
2,396 |
7,138 |
5,883 |
3,470 |
4,441 |
4,516 |
||
Cash |
124,295 |
98,521 |
75,767 |
103,986 |
192,683 |
539,996 |
1,258,134 |
1,348,025 |
||
Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Current Liabilities |
|
|
(19,057) |
(12,143) |
(28,841) |
(64,700) |
(31,169) |
(48,712) |
(50,758) |
(52,014) |
Creditors |
(19,057) |
(12,143) |
(28,841) |
(63,976) |
(30,396) |
(47,939) |
(49,985) |
(51,241) |
||
Short term borrowings |
0 |
0 |
0 |
(724) |
(773) |
(773) |
(773) |
(773) |
||
Long Term Liabilities |
|
|
(1,194,274) |
(771,506) |
(1,269,289) |
(887,387) |
(211,532) |
(16,532) |
(16,532) |
(16,532) |
Long term borrowings |
(1,193,000) |
(770,000) |
(1,264,000) |
(878,028) |
(197,864) |
(2,864) |
(2,864) |
(2,864) |
||
Other long term liabilities |
(1,274) |
(1,506) |
(5,289) |
(9,359) |
(13,668) |
(13,668) |
(13,668) |
(13,668) |
||
Net Assets |
|
|
4,939,988 |
4,899,664 |
5,171,916 |
5,325,920 |
5,714,571 |
6,073,465 |
6,649,578 |
7,206,189 |
CASH FLOW |
||||||||||
Operating Cash Flow |
|
|
608,503 |
564,187 |
518,680 |
548,301 |
784,843 |
918,008 |
1,231,704 |
1,246,827 |
Net Interest |
(24,193) |
(24,993) |
(41,187) |
(41,242) |
(16,715) |
(5,316) |
965 |
2,258 |
||
Tax |
28 |
(326) |
0 |
(5,380) |
(2,686) |
(623) |
(1,000) |
(1,000) |
||
Capex |
(805,472) |
(19,633) |
(861,406) |
10,571 |
149,648 |
(117,030) |
(168,000) |
(785,000) |
||
Acquisitions/disposals |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
||
Financing |
595,140 |
1,236 |
1,279 |
37,198 |
22,396 |
0 |
0 |
(0) |
||
Dividends |
(78,708) |
(121,934) |
(132,915) |
(129,986) |
(167,212) |
(252,727) |
(345,531) |
(373,194) |
||
Net Cash Flow |
295,298 |
398,537 |
(515,549) |
419,462 |
770,274 |
542,313 |
718,138 |
89,891 |
||
Opening net debt/(cash) |
|
|
1,362,703 |
1,068,705 |
671,479 |
1,188,233 |
774,766 |
5,954 |
(536,359) |
(1,254,497) |
Other |
(1,300) |
(1,311) |
(1,205) |
(5,995) |
(1,462) |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
1,068,705 |
671,479 |
1,188,233 |
774,766 |
5,954 |
(536,359) |
(1,254,497) |
(1,344,388) |
Source: Company sources, Edison Investment Research
|
|
Research: Investment Companies
Standard Life UK Smaller Companies Trust (SLS) has two managers, Harry Nimmo and Abby Glennie at abrdn (formerly Aberdeen Standard Investments); therefore, a succession plan is in place should Nimmo choose to retire. They are positive on the outlook for UK smaller-cap stocks, which is reflected in the trust’s higher level of debt compared with an ungeared position 12 months ago. The managers are encouraged by SLS’s very strong relative performance in recent months as investors have once again gravitated towards the quality, growth and momentum stocks that are favoured by its disciplined and repeatable investment process. This approach has proved successful over several market cycles; Nimmo and Glennie are essentially delivering ‘what it says on the tin’.
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