Again had to find this by visiting their website. http://www.consminerals.com.au/
Brokers Bell Potter put out a report "Earnings and Dividend Upgrade" 14 October quotes --------------------------------------- Earnings and Dividend Upgrades sp $1.72
Summary We have upgraded our FY05 earnings and dividend forecasts for Consolidated Minerals based on the continuing strength in manganese prices and the positive outlook. We have increased our 12 month price target to $2.14, which equates to a forecast FY05 earnings multiple of eight times and approximately 1.2 times our DCF valuation. Matthew Ward [email protected] CSM ASX 300 We are forecasting FY05 operating cash flows of nearly $60 million that will fund: An expansion in manganese production from 0.6mt to at least 0.8mt including a comprehensive exploration programme at a total cost of $15 million. Ongoing exploration at Coobina targeting an extension to the mine life. Growth strategies to expand and diversify production with a specific focus on carbon steel minerals. Investment in Portman Consolidated has acquired a 14.8% interest in Portman, a WA based iron ore producer. Its investment is currently worth over $55 million and includes an unrealised gain of over $10 million based on the current Portman share price of $2.18. News-flow We expect positive news-flow over the next six months from: Exploration results from an $8 million programme focused on Woodie Woodie (manganese), Coobina (chromite), Mindy Mindy, Mt Finnerty (iron ore) and Nepean (nickel). Expansion of manganese production. New manganese supply contracts. Double digit manganese benchmark price increases. Potential entry into the S&P ASX 200. Recommendation and Valuation We are retaining our ‘Buy 2’ recommendation and have increased our 12 month price target to $2.14. This represents a multiple of eight times forecas t FY05 ear n ings and approximately 1.2 times our DCF valuation, which is common with other resource companies at this stage in the cycle. Key Points We have increased our FY05 benchmark manganese price growth forecast from 3% to 13% as a result of ongoing market tightness. This is due to robust global demand underpinned by strong growth from China combined with supply constraints caused by a lack of mine, rail and port infrastructure investment in recent years. Our forecast FY05 net profit of $51.3 million is now more than double FY04 net profit of $25.1 million. Key drivers are strong manganese and chromite ore prices as supported by the company’s comprehensive currency hedge book with approximately 85% of FY05 US$ revenues currently hedged. Forecast adjusted earnings per share of 26.8 cents is 89% above the previous year and equates to a modest price earnings multiple of 6.4 times at the current share price. We are forecasting an increase of 63% in fully franked dividends to 13.0 cents per share (FY04: 8.0 cents). This represents a 7.6% fully franked yield at the current share price. Return on equity is forecast to increase to a very robust 44% in FY05 based on further margin growth. The balance sheet remains strong despite the implementation of growth strategies and regular dividend payments.
CSM Price at posting:
0.0¢ Sentiment: None Disclosure: Held