Jubilee Metals reports strong growth in revenue, earnings

Metals processing company Jubilee reported a 133% improvement in total revenue in its audited results on Thursday, to £133m.

The AIM-traded firm said attributable operational earnings grew by 183% to £71m, while its return on equity increased to 35.4% for the year ended 30 June, from 21.2% in the prior year.

Adjusted profit before tax was ahead 324% at £52m, while profit after tax, adjusted for non-cash expenses including impairments, gain on bargain purchase and share based payments, jumped 194% to £49m.

The company said adjusted earnings per share were 163% higher year-on-year at 2.25p.

Its board said the growth in revenue and earnings was achieved during a period of “substantial” infrastructure investment, integration and planned operational downtime, providing a “tremendous platform” for further future growth.

Jubilee said it delivered strong cash flows from operating activities of £23.8m, up from £19.4m in the 2020 financial year.

During the period, a total of £19.8m was invested in acquisitions and purchases of property, plant and equipment, compared with the previous year's total investment of £26.1m, while a further £1.8m of external debt obligations were repaid, compared to £4.2m in 2020.

Earnings per share were 93% higher at 1.81p, while the group boosted its operating profit by a “strong” 189% to £45.9m, with its operating margin rising to 35% from 29%.

The group's balance sheet strengthened “substantially”, the board said, with total assets increasing by 49% to £195m, while total equity increased to £136.5m from £94.2m year-on-year.

Jubilee said its gearing remained low, with the net cash position and current assets covering 147% of total liabilities, compared to 92.7% at the end of the 2020 financial year.

“During the year we have seen the pandemic biting into everyone's lives in various ways, showing no respite and reproducing itself in new forms and the uncertainty of pandemic management still exists,” said non-executive chairman Colin Bird.

“Against this uncertain environment stock markets have advanced to all-time highs and commodity prices have seen unprecedented growth.

“Any and all metals which will be required for future clean energy generation or storage have seen significant price increases.”

Bird said the outlook for copper in particular remained “buoyant”, with many predictions that the 2030 calendar year would see a doubling in demand for the metal.

I see the supply side being severely challenged, with Chile as a major contributor to the copper supply being challenged technically and socially.

“The large copper systems that are now in favour are few and far between and have a gestation period of some 12 years.

“The lack of big projects being developed will, to me, facilitate smaller copper production from both surface and underground mines.”

Colin Bird said the reason for that was that the period to bring smaller projects into production was much shorter.

“The inability of supply to keep up the demand should keep the price of copper above $8,500 per tonne.

“We do, however, anticipate that prices may exceed $11,000 per tonne during the 2023 calendar year and beyond.

“The possession of copper secondaries, mined and on surface, gives Jubilee a very good position in tomorrow's copper production and promises superior returns to its shareholders.”

In the platinum group metals space, meanwhile, Bird said the company saw the emergence of the fuel cell, particularly in China, as underpinning and increasing prices as demand for fuel cell energy increased over the coming years.

“Your company is well-positioned in the new energy space and has a style of doing business which is both unique and transferable.”

At 1034 GMT, shares in Jubilee Metals Group were up 7.82% at 17.09p.