Goldplat preliminary results ($GDP:LN)

Goldplat ($GDP:LN) released very positive preliminary results yesterday which I think are noteworthy given the share price barely moved. This is quite a sizeable position for me and the results were very positive in relation to the market cap of £10.3m.

Goldplat plc is an AIM-listed, profitable gold recovery services company with two market leading operations in South Africa and Ghana.

Results highlights:

  • 140% increase in operating profit from continuing operations to £2,910,000 (2016: £1,212,000)
  • 43% increase in profit before tax from continuing operations to £2,836,000 (2016: £1,988,000
  • Kilimapesa Gold (Pty) Limited reported a net loss of £1,100,000 for the year (2016: loss of £711,000) as the benefits of increased production capacity were only realised during the second half of FY 2017. In FY 2017 revenue increased to £3,150,000 (2016: £156,000), with operating profit achieved towards the end of the year
  • Nyieme exploration project discontinued and development cost of £955,000 written-off, with no cashflow impact in current period.
  • Net cash position of £2,650,000 as at 30 June 2017 (£2,056,000 as at 30 June 2016)

In the interim results, they recorded £1.3m profit before tax, which means H2 profit was £1.6m before tax.

The gold price in 2017 has been on an upward trend, but from a low starting point. Still, upwards trends help Goldplat, but also its increased profits come from increased production and processing. The mine made a net loss of £1.1m but was breaking even at the end of the year given a decent gold price (compared to the last few years anyway). If break even can continue then that gives the company a run rate PBT of about £4m. This from a company trading at a market cap of £8m exc cash.

Even if we say that 2017 is exceptional, in 2016 the company made £1.9m before tax.

That said, some of the last few years have been rocky which shows the company is risky. But I think these strong results show the potential of this company. Not only is it yielding good earnings, but it profits from gold price increases which typically move inversely to the economy.

Disclosure: Author is long GDP

Founder of Investing Sidekick. Works as a research analyst and is an avid value investor, always searching for undervalued shares.

2 thoughts on “Goldplat preliminary results ($GDP:LN)”

  1. I am pleased to see that you are long on GOLDPLAT as I feel it will take some considerable time for market confidence to be regained.

    Also they have a number of other serious issues to over come before moving on. This fact could, as well as a lack of market confidence, be behind the fall in the SP after GOLDPLAT issued their best results for some time. Assuming of course you can believe this company.

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