Quarterly Report March 2018

Transcription

1 Quarterly Report March 2018 AUSMINCON HOLDINGS LIMITED ABN

2 1 Message from the Managing Director Ausmincon Holdings Limited (AHL or the Group of companies) is pleased to announce its results for the third quarter ending 31 March Group performance for the March quarter was a pre-tax net operating profit of A$970k. This profit was sufficient to reverse the losses recorded in the September and December quarters and deliver a YTD net operating profit of A$160k. Quarterly profit was more than forecast in the budget. This is due to project value exceeding budget that rebuilt work in hand and led to consultant utilization and revenue greater than planned. All offices were busy and productive in March quarter reflecting the success of the Group s business initiatives and an improving market for mining advisory services. The WIN SMART approach was implemented in November to increase revenue. The phase one objective was achieved, win a greater proportion of competitive proposals and rebuild work in hand. Phase two is underway with a complementary focus on lifting profit margin per consulting hour. Forecasts of utilization and revenue show continued strong performance next quarter. The Adelaide, Brisbane, Melbourne, Perth, Canadian, and Maidenhead offices forecast profitability in the June quarter. An official opening ceremony of the Moscow office is planned for October, timed to coincide with MINEX Russia The office was open throughout March. Initial feedback indicates that the in-country presence is promoting improved local recognition of the AMC Consultants brand. 2 Key quarter information AMC s global operations averaged utilization of 70% (up from 57% in the December quarter). The March quarter gross income, including subcontractors and disbursements, was A$10.0m, which is A$1.3m more than budget. YTD gross income was A$25.2m, which is A$560k less than budget. The March quarter net operating profit before tax across the Group was A$970k, which is A$360k more than budget. YTD net operating profit was A$160k, which is A$1.1m less than budget. More details are shown in Section 10. New projects with an estimated budget of more than A$100,000 won during the quarter were: Abosso Goldfields Limited (Unconstrained Damang Pre-feasibility Study) BHP Billiton Nickel West Pty Ltd (BHP Nickel West B11 Definitive Phase Study) BHP Billiton Nickel West Pty Ltd (BHP Nickel West Secondment) Eldorado Gold Corporation (Eldorado Olympias Gold Mine Preliminary Studies) Gold Fields Australia Pty Limited (Cerro Corona Pre-feasibility Study Report) Gold Fields La Cima S.A. (Gold Fields Cerro Corona Mining Fleet Trade-off Study) Hindustan Zinc Limited (HZL Ore Production Expansion Project) JSC Matrosova Mine (Natalka Mining Geotechnical Study) KAZ Minerals Aktogay LLC (Aktogay Expansion Project Detailed Engineering Mine Planning) Konkola Copper Mines Plc (KCM High-level Strategic Review) LLC GDK Baimskaya (Peschanka Drilling Programme and Technical Support) Oyu Tolgoi LLC (Oyu Tolgoi Secondment- C Homewood and L Morris) PJSC MMC Norilsk Nickel" (Oktyabrsky Mining Study) PJSC Polyus (Polyus 2017 Mineral Resources and Ore Reserves) Polimetal Madencilik San. Tic. A.Ş. (Gediktepe Resource Modelling, Mine Planning, Preparing FS and Technical Re- 2

3 port) Pretium Resources Inc (Pretivm Brucejack Paste Plant Upgrade) Prolific Mining Corporation (Prolific Mineral Resource Estimate and NI Technical Report) PT Agincourt Resources (PTAR Martabe 2018 Technical Advice) PT Amman Minerals Nusa Tenggara (Batu Hijau Underground Pre-Feasibility Study) PT Amman Minerals Nusa Tenggara (Elang UG Pre-Feasibility Study) Rockhaven Resources Ltd (Rockhaven Klaza Mineral Resource Update and NI ) Roy Hill Iron Ore Pty Ltd (Roy Hill Secondment - Ross Richardson) SilverCorp Metals Inc (SilverCorp Gaocheng NI Technical Report Update) VHM Exploration Pty Ltd (Goshen Feasibility Stage 1b and 2) 3 Staffing Table 1 shows staff changes over the last quarter and the last year as full-time equivalent employees (based upon payroll records and includes casuals and excludes unpaid maternity leave, for example). Table 1 AMC Consultants boards effective 9 February. Accepting the recommendations of a review of AHL Group board practices, which included: The AHL and AMC boards to comprise the same directors. With Martin s retirement from the boards, Mo Molavi and Patrick Smith were appointed to the AHL Board until the AGM on 21 November 2018, and Lawrie Gillett, Daniel Kahler and Mike Sandy were appointed to the board of AMC Consultants Pty Ltd. The number of meetings to be reduced as much as practicable. The AHL Remuneration and Nominations Committee to be disbanded and its chartered responsibilities to be taken over by the AMC Remuneration and Nominations Committee. After reviewing the December quarter results and the cash forecast, the Board agreed that we are not able to pay a December quarter dividend. The Board noted, however, that a small dividend is forecast in April and budgeted on the third quarter results, and a larger dividend is forecast for August and budgeted on the fourth quarter results. The Board looks forward to being able to declare a dividend for the March quarter if the current upturn in revenue continues. The AMC Consultants Board met on Wednesday 31 January and Tuesday 27 March. 4 Board matters The AHL Board (the Board) met once during the quarter on Tuesday 27 February. The outcomes of that meeting were reported to all shareholders on 6 and 7 March, and included: Noting with regret that Martin Staples has decided to step down from the AHL and The boards plan to meet in Melbourne in May to determine business guidance and direction to the management team. 5 Share trading During this reporting period, one current shareholder purchased 35 shares from two ex -employee shareholders, completely extinguishing those two ex-employee shareholdings. 3

4 A share trading period was held from 1 February to 15 March. One new and one current shareholder purchased a total of six shares from an ex-employee shareholder. The Ausmincon Share Trust does not hold any shares. The two regular share trading periods each year are: 1 February to 15 March 1 August to 15 September 6 Dividends After reviewing the March quarter results and the cash forecast, the Board resolved to declare a A$10 per share dividend for the March quarter. A small dividend has been budgeted for the June quarter but declaration of a dividend is always governed by Board guidelines that are linked to available and forecast cash levels. 7 Registered office Ausmincon Holdings Limited Level 29, 140 William Street MELBOURNE VIC 3000 AUSTRALIA Phone ACN Board personnel Board of Directors Rob Hogarth, Non-executive Chair Lawrie Gillett Andrew Hall Daniel Kahler Mo Molavi Mike Sandy Patrick Smith Secretaries Joy Rollason Victoria Kladchenko 9 Share registry information Number of shares on issue: 24,863 Number of shareholders: 96 Current value of each share: A$500 Capitalization: A$12,431,500 Last dividend paid: 27 April 2018 Last dividend value: A$10 per share 10 Financials 4

5 11 Directors Rob Hogarth Chairman since 10 December 2015 Non-executive Director since 1 July 2012 Lawrie Gillett 28 October 1992 Andrew Hall 19 November 2014 Daniel Kahler 18 November 2015 Mo Molavi 1 February 2018 Mike Sandy 23 October 2009 Patrick Smith 1 February 2018 AMC CEO since 7 April 2014 AMC MD since 2 February

6 AHL Strategic Statement FY2018-FY2020 Vision Investment vehicle for employee shareholders Purpose To unearth a smarter way Strategic priorities Our Portfolio Our Ownership Our Performance Our Customer Care Strategic differentiation Mining Services Employee Based Market Rates Shareholder Customers Execution Maintain a single focus Maintain a deliberate lack of spread across sectors Acknowledge that specialization builds expertise Provide the vehicle for employee ownership that supports attracting, developing and retaining the best expertise in our field Only consider alternative ownership models on a reactive basis in line with shareholder sentiment Shareholder return is measured by dividends and capital gains Maintain a shareholder medium-term return that is above the bank lending rate Shareholders are exposed to upside and downside of the industry Shareholders are treated as customers Shareholder interests are the primary driving force Actions are transparent Active continuous disclosure regime Any new investments must meet: Portfolio objectives Return objectives Financial objectives 1. Free cash from operations at A$1.5m in FY2018, A$2.0m in FY2019, and A$2.5m in FY Sustainably deliver a 10% to 15% per annum return on investment to our shareholders over a rolling five-year period