16 May 07 Hambledon Mining
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Research Alert Contacts
Wednesday 16 May 2007
Vice Chairman Richard Ratner 020 7107 8037 [email protected]
Stocks covered in this note Stock/sector
Analyst
Mkt cap (£m)
Hambledon Mining 1,3,4,5,F
Charles Kernot
60.5
Recommendation
Page
BUY
2
Research Team Head of Research Jim McCafferty 020 7107 8070 [email protected]
FTSE All Share – recent performance
Deputy Head of Research
3450
3400
3350
Close
Daily % chge
6568.65
0.2
FTSE All Share
3413.75
0.23
Asa Bridle 020 7107 8034 [email protected]
FTSE Mid 250
12092.22
0.45
Derek J. Brown 020 7107 8068 [email protected]
1202.1
0.11
3300
3250
3200
3150
FTSE AIM
3100 19 26 5 12 19 26 FEB MAR FT SE ALL SHAR E - PR IC E IND EX
2
9
16 23 APR
30
7 14 M AY
Sourc e: D AT ASTREAM
Earnings Monitor Company Hardide
Date
2007E
15.05.07
(06)
European Goldfields
15.05.07
Sage
15.05.07 3,5
11.05.07
0.4
2008E (07)
15.1 22.0
(06)
-0.79
37.1
(07)
(06)
16.9
-0.2
16.0
13.8
15.9 (07)
2008E
11.4
19.0
13.9 (06)
1.5
2007E
15.3 (07)
26.0
Debenhams
10.05.07
11.8
14.4
10.4
13.5
N Brown
10.05.07
15.5
17.1
16.7
19.0
Antofagasta (US¢)
08.05.07
Blacks Leisure
03.05.07
na
11.9
Aquarius Platinum
03.05.07
169.0
219.7
Rentokil
03.05.07
(06)
143.8
(06E)
9.4
(07)
124.2
(07)
11.5
(06)
138.2 9.2 =
189.86 (06E)
Forthcoming Events 2007 May
June
16 16 31 12
Company 3,4,5 Networkers International 3,5 Geong 3,5 Titan Europe 3,5 Focus Solutions
Event Final results Final results Field trip Final results
If you wish to arrange a meeting, please ring your Sales contact. F
Jon Dunningham 020 7107 8042 [email protected]
Charles Kernot 020 7107 8069 [email protected]
EPS (p) NEW
EPS (p) OLD
Oakdene Homes
Research Analysts
Gerald Farr 020 7107 8332 [email protected]
Source: Datastream
3,5
Alan Matthews 020 7107 8021 [email protected]
Key Indices UK FTSE 100
Forecast change
Please see regulatory disclosure notes at the end of this document
10.4
(07)
144.2 14.5
208.30 (07E) 9.7
Kevin Lapwood 020 7107 8337 [email protected] Charles Peacock 020 7107 8001 [email protected] Amit Thakar 020 7107 8022 [email protected] Andrew Wade 020 7107 8049 [email protected]
Research Alert Wednesday 16 May 2007
Hambledon Mining
1,3,4,5, F
Metals & Mining
BUY 14.25p
Severely mispriced
AIM HMB.L
• Hambledon Mining has updated the market on the progress that it has been making at the Sekisovskoye gold mine in East Kazakhstan. It suggests that the mine is within two to three months of production. Work on the rehabilitation of the Ognyovka process plant has also commenced.
No of shares (m)
425
Market cap (£m)
60.5
• The key area of concern at Sekisovskoye has been the ball mills, which were subject to about nine months of delays. The first mill is now on site and being fitted into the process plant. The second mill has been built and is now being shipped to site. When completed, the plant will need to apply for local operating approvals to ensure compliance with health and safety legislation. The length of time that this process will take is uncertain but it should not delay the start of the process plant for long.
Net cash (£m)
• Recent grade control drilling on the first bench that is scheduled to be mined has confirmed that overall tonnes and estimated grade has increased above that of the original resource. The 18% uplift to contained gold is in line with the earlier work which suggested that the Soviet results underestimated the grade by approximately 17%.
Next news Finals - 5 June
• Exploration elsewhere in the licence area has so far not yielded much success, albeit that some drilling has intersected low-grade mineralization. Additional work is scheduled here in order to determine if more consistent mineralization can be intersected at depth and further results should be available later in the year.
Enterprise value (£m) (%) FTA relative
Year end 31 Dec
2005A 2006E 2007E 2008E
Sales (£m)
0.0 0.0 10.7 35.7
Pre-tax Normalised (£m) Net (£m)
-0.6 -0.7 3.5 17.5
-0.6 -0.7 3.5 17.5
3m -13.0
12m -17.1
17.75/12.25
Business Developing gold mines and other production facilities in Kazakhstan www.hambledon-mining.com Price and price relative (-2y) HAMBLE DON MINING
15/5/07
20
18
16
14
12
10
8
6 M J J A S O N D J F M A M J J A PRICE PRICE REL. T O FT SE ALL SHA RE - PRICE INDEX
S
O N
D
J
F
M A
Source: DATASTREAM
Source : Datastream
Contact Charles Kernot Research Analyst 020 7107 8069 [email protected]
PER (x)
DPS (p)
Yield (%)
EV/Sales (x)
EV/EBITDA (x)
-0.2 -0.2 0.8 4.1
nm nm 17.8 3.5
0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0
nm nm 5.2 1.6
nm nm 10.4 2.8
Please see regulatory disclosure notes at the end of this document
Seymour Pierce Research
1m -4.9
EPS (p)
Source: Seymour Pierce Limited full year forecasts 1,3,4,5
56.1
12 month high/low (p)
• While Sekisovskoye will be coming to production behind schedule, this should be offset by the start of output at the Ognyovka plant. Indeed, we estimate that the additional earnings that should be generated from that operation will more than offset the lower earnings from the mine. This means that the stock is trading on a prospective 2008 PER of only 3.5. • Against the US$138/oz of resource and US$5,778/oz of annual production paid by Kazakhmys for Eurasia Gold we estimate that Hambledon is currently on values US$34/oz and US$1,677/oz, respectively. While Eurasia’s rating reflected its restricted free float we believe that Hambledon should be trading at least at 3 times its current level. BUY.
4.4
2
Research Alert Wednesday 16 May 2007
Hambledon Mining – production and earnings summary estimates Year end 31 December
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Gold production (000oz)
0.0
0.0
0.0
0.0
14.7
71.5
118.4
137.4
149.2
Gold price (US$/oz)
364
410
445
604
620
485
412
420
429
Profit & loss (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
0.0
0.0
0.0
0.0
10.7
35.7
40.2
43.1
44.5
Turnover Operating costs
0.0
0.0
0.0
0.0
4.3
14.3
18.0
21.3
23.9
Depreciation
0.0
0.0
0.0
0.0
1.8
2.9
2.7
2.7
2.8
Admin and other
0.2
0.4
0.8
0.9
0.9
0.9
1.6
2.0
2.2
-0.2
-0.4
-0.8
-0.9
3.6
17.5
17.8
17.1
15.7
0.0
0.0
0.2
0.2
-0.2
0.0
0.9
1.5
2.1
-0.2
-0.4
-0.6
-0.7
3.5
17.5
18.7
18.6
17.7
0.0
0.0
0.0
0.0
0.0
0.0
4.2
4.6
4.3
Attributable profit
-0.2
-0.4
-0.6
-0.7
3.5
17.5
14.5
14.0
13.5
Normalised earnings
-0.2
-0.4
-0.6
-0.7
3.5
17.5
14.5
14.0
13.5
Normalised EPS
-0.1
-0.2
-0.2
-0.2
0.8
4.1
3.4
3.3
3.2
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.4
0.4
PBIT Net interest Pre-tax Tax
DPS Balance sheet (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Fixed assets
0.2
0.7
3.1
13.6
22.0
20.6
20.4
20.8
21.6
Stocks
0.0
0.0
0.0
1.0
1.0
2.0
2.2
2.4
2.5
Trade Debtors
0.0
0.0
0.2
1.2
1.5
3.0
3.4
3.6
3.7
Cash
0.0
1.3
4.0
6.8
10.6
29.6
41.5
53.8
65.3
Other
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Current assets
0.0
1.3
4.2
9.0
13.1
34.6
47.2
59.8
71.5
Short-term debt
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
Trade creditors
0.0
0.0
0.0
0.0
0.5
3.0
2.6
3.3
3.8
Tax and other
0.1
0.1
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Current liabilities
0.4
0.4
0.4
0.4
1.0
3.4
3.0
3.8
4.3
Long term liabilities
0.0
0.0
1.1
7.1
7.1
7.1
7.1
7.1
7.1
Net Assets
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
Shareholders' funds
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Equity Interests
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
Cash Flow (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Operating profit
-0.2
-0.4
-0.8
-0.9
3.6
17.5
17.8
17.1
15.7
Dep'n and Amortisation
0.0
0.0
0.0
0.0
1.8
2.9
2.7
2.7
2.8
Other non-cash
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
Minorities
Change in working cap
0.3
0.0
-0.2
-2.0
0.2
0.0
-1.0
0.3
0.3
Operating cash flow
0.1
-0.4
-0.9
-2.9
5.7
20.4
19.5
20.1
18.8
Net interest and dividends
0.0
0.0
0.1
0.2
-0.2
0.0
-0.8
-0.2
0.5
Taxation
0.0
0.0
0.0
0.0
0.0
0.0
-4.2
-4.6
-4.3
Net capital expenditure
-0.1
-0.5
-1.3
-10.5
-7.2
-1.5
-2.6
-3.1
-3.5
Acquisitions/disposals
0.0
0.0
0.0
0.0
-3.0
0.0
0.0
0.0
0.0
0.0
-0.9
-2.0
-13.2
-4.7
18.9
11.9
12.2
11.5
Debt raised
0.0
0.0
0.0
6.0
0.0
0.0
0.0
0.0
0.0
Shares issued
0.0
2.1
4.8
10.0
8.5
0.0
0.0
0.0
0.0
Cash flow
0.0
1.2
2.8
2.8
3.8
18.9
12.0
12.2
11.5
Cash at end of year
0.0
1.3
4.0
6.8
10.6
29.6
41.5
53.8
65.3
Source: Company data and Seymour Pierce Limited estimates
3
Seymour Pierce Research
Key to material interests 1. The analyst has a personal holding of the securities issued by the company, or of derivatives related to such securities. 2. Seymour Pierce Limited or an affiliate owns more than 5% of the issued share capital of the company. 3. Seymour Pierce Limited or an affiliate is party to an agreement with the company relating to the provision of investment banking services, or has been party to such an agreement within the past 12 months. Our corporate broking agreements include a provision that we will prepare and publish research at such times as we consider appropriate. 4. Seymour Pierce or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities for the company within the past 12 months. 5. Seymour Pierce is a market maker or liquidity provider in the securities issued by the company. 6. Seymour Pierce is party to an agreement with the company relating to the production of research recommendations. Distribution of ratings Our research ratings are defined with reference to the amount by which we expect the absolute return to change over the next 12 months: Rating
Definition
Buy
Absolute return expected to increase by more than 10%
Outperform
Absolute return expected to increase by between 5% and 10%
Hold
Absolute return expected to change by between -5% and +5%
Underperform
Absolute return expected to decrease by between 5% and 10%
Sell
Absolute return expected to decrease by more than 10%
As at 31 March 2007 the distribution of all our published recommendations is as follows:
Rating
Proportion of recommendations
Proportion of these provided with investment banking services
Buy
36%
58%
Outperform
24%
19%
Hold
27%
28%
Underperform
7%
6%
Sell
1%
0%
Important Notes Our research recommendations are issued and approved for distribution within the United Kingdom by Seymour Pierce Limited only to market counterparties and intermediate customers as defined under the FSA rules. Our research is not directed at, may not be suitable for and should not be relied upon by any other person. The information contained in our research is compiled from a number of sources and is believed to be correct, but cannot be guaranteed. It is not to be construed as an offer, invitation or solicitation to buy or sell any securities of any of the companies referred to within it. All statements made and opinions expressed are made as at the date on the face of the material and are subject to change without notice. Where prices of securities are mentioned, these are the mid-market prices as at the close-of-business on the business day immediately preceding the date of the research. The meanings of our research ratings, together with the proportion of our recommendations issued during the previous quarter carrying each rating, is set out on our website at www.seymourpierce.com. Seymour Pierce Limited and/or its associated companies and ultimate holding company may from time-to-time provide investment or other services to, or solicit such business from, any of the companies referred to in research material. In addition, they and/or their directors and employees and/or any connected persons may have an interest in the securities of any of the companies in the report and may from time-to-time add to or dispose of such interests. Details of the significant conflicts relating to the companies that we research are set out on our website www.seymourpierce.com, together with a summary of our policies for managing conflicts of interest. Seymour Pierce does not meet all of the FSA standards for managing conflicts of interest, as a result our research should not be regarded as an impartial or objective assessment of the value or prospects of its subject matter, though of course we will always ensure that it remains clear, fair and not misleading. Seymour Pierce Limited is authorised and regulated by the Financial Services Authority, and is a member of the London Stock Exchange.
Seymour Pierce Limited
Bucklersbury House 3 Queen Victoria Street London EC4N 8EL
Switchboard: 020 7107 8000 Corporate Finance fax: 020 7107 8100 Research + Sales fax: 020 7107 8102
www.seymourpierce.com
Wednesday 16 May 2007
Vice Chairman Richard Ratner 020 7107 8037 [email protected]
Stocks covered in this note Stock/sector
Analyst
Mkt cap (£m)
Hambledon Mining 1,3,4,5,F
Charles Kernot
60.5
Recommendation
Page
BUY
2
Research Team Head of Research Jim McCafferty 020 7107 8070 [email protected]
FTSE All Share – recent performance
Deputy Head of Research
3450
3400
3350
Close
Daily % chge
6568.65
0.2
FTSE All Share
3413.75
0.23
Asa Bridle 020 7107 8034 [email protected]
FTSE Mid 250
12092.22
0.45
Derek J. Brown 020 7107 8068 [email protected]
1202.1
0.11
3300
3250
3200
3150
FTSE AIM
3100 19 26 5 12 19 26 FEB MAR FT SE ALL SHAR E - PR IC E IND EX
2
9
16 23 APR
30
7 14 M AY
Sourc e: D AT ASTREAM
Earnings Monitor Company Hardide
Date
2007E
15.05.07
(06)
European Goldfields
15.05.07
Sage
15.05.07 3,5
11.05.07
0.4
2008E (07)
15.1 22.0
(06)
-0.79
37.1
(07)
(06)
16.9
-0.2
16.0
13.8
15.9 (07)
2008E
11.4
19.0
13.9 (06)
1.5
2007E
15.3 (07)
26.0
Debenhams
10.05.07
11.8
14.4
10.4
13.5
N Brown
10.05.07
15.5
17.1
16.7
19.0
Antofagasta (US¢)
08.05.07
Blacks Leisure
03.05.07
na
11.9
Aquarius Platinum
03.05.07
169.0
219.7
Rentokil
03.05.07
(06)
143.8
(06E)
9.4
(07)
124.2
(07)
11.5
(06)
138.2 9.2 =
189.86 (06E)
Forthcoming Events 2007 May
June
16 16 31 12
Company 3,4,5 Networkers International 3,5 Geong 3,5 Titan Europe 3,5 Focus Solutions
Event Final results Final results Field trip Final results
If you wish to arrange a meeting, please ring your Sales contact. F
Jon Dunningham 020 7107 8042 [email protected]
Charles Kernot 020 7107 8069 [email protected]
EPS (p) NEW
EPS (p) OLD
Oakdene Homes
Research Analysts
Gerald Farr 020 7107 8332 [email protected]
Source: Datastream
3,5
Alan Matthews 020 7107 8021 [email protected]
Key Indices UK FTSE 100
Forecast change
Please see regulatory disclosure notes at the end of this document
10.4
(07)
144.2 14.5
208.30 (07E) 9.7
Kevin Lapwood 020 7107 8337 [email protected] Charles Peacock 020 7107 8001 [email protected] Amit Thakar 020 7107 8022 [email protected] Andrew Wade 020 7107 8049 [email protected]
Research Alert Wednesday 16 May 2007
Hambledon Mining
1,3,4,5, F
Metals & Mining
BUY 14.25p
Severely mispriced
AIM HMB.L
• Hambledon Mining has updated the market on the progress that it has been making at the Sekisovskoye gold mine in East Kazakhstan. It suggests that the mine is within two to three months of production. Work on the rehabilitation of the Ognyovka process plant has also commenced.
No of shares (m)
425
Market cap (£m)
60.5
• The key area of concern at Sekisovskoye has been the ball mills, which were subject to about nine months of delays. The first mill is now on site and being fitted into the process plant. The second mill has been built and is now being shipped to site. When completed, the plant will need to apply for local operating approvals to ensure compliance with health and safety legislation. The length of time that this process will take is uncertain but it should not delay the start of the process plant for long.
Net cash (£m)
• Recent grade control drilling on the first bench that is scheduled to be mined has confirmed that overall tonnes and estimated grade has increased above that of the original resource. The 18% uplift to contained gold is in line with the earlier work which suggested that the Soviet results underestimated the grade by approximately 17%.
Next news Finals - 5 June
• Exploration elsewhere in the licence area has so far not yielded much success, albeit that some drilling has intersected low-grade mineralization. Additional work is scheduled here in order to determine if more consistent mineralization can be intersected at depth and further results should be available later in the year.
Enterprise value (£m) (%) FTA relative
Year end 31 Dec
2005A 2006E 2007E 2008E
Sales (£m)
0.0 0.0 10.7 35.7
Pre-tax Normalised (£m) Net (£m)
-0.6 -0.7 3.5 17.5
-0.6 -0.7 3.5 17.5
3m -13.0
12m -17.1
17.75/12.25
Business Developing gold mines and other production facilities in Kazakhstan www.hambledon-mining.com Price and price relative (-2y) HAMBLE DON MINING
15/5/07
20
18
16
14
12
10
8
6 M J J A S O N D J F M A M J J A PRICE PRICE REL. T O FT SE ALL SHA RE - PRICE INDEX
S
O N
D
J
F
M A
Source: DATASTREAM
Source : Datastream
Contact Charles Kernot Research Analyst 020 7107 8069 [email protected]
PER (x)
DPS (p)
Yield (%)
EV/Sales (x)
EV/EBITDA (x)
-0.2 -0.2 0.8 4.1
nm nm 17.8 3.5
0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0
nm nm 5.2 1.6
nm nm 10.4 2.8
Please see regulatory disclosure notes at the end of this document
Seymour Pierce Research
1m -4.9
EPS (p)
Source: Seymour Pierce Limited full year forecasts 1,3,4,5
56.1
12 month high/low (p)
• While Sekisovskoye will be coming to production behind schedule, this should be offset by the start of output at the Ognyovka plant. Indeed, we estimate that the additional earnings that should be generated from that operation will more than offset the lower earnings from the mine. This means that the stock is trading on a prospective 2008 PER of only 3.5. • Against the US$138/oz of resource and US$5,778/oz of annual production paid by Kazakhmys for Eurasia Gold we estimate that Hambledon is currently on values US$34/oz and US$1,677/oz, respectively. While Eurasia’s rating reflected its restricted free float we believe that Hambledon should be trading at least at 3 times its current level. BUY.
4.4
2
Research Alert Wednesday 16 May 2007
Hambledon Mining – production and earnings summary estimates Year end 31 December
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Gold production (000oz)
0.0
0.0
0.0
0.0
14.7
71.5
118.4
137.4
149.2
Gold price (US$/oz)
364
410
445
604
620
485
412
420
429
Profit & loss (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
0.0
0.0
0.0
0.0
10.7
35.7
40.2
43.1
44.5
Turnover Operating costs
0.0
0.0
0.0
0.0
4.3
14.3
18.0
21.3
23.9
Depreciation
0.0
0.0
0.0
0.0
1.8
2.9
2.7
2.7
2.8
Admin and other
0.2
0.4
0.8
0.9
0.9
0.9
1.6
2.0
2.2
-0.2
-0.4
-0.8
-0.9
3.6
17.5
17.8
17.1
15.7
0.0
0.0
0.2
0.2
-0.2
0.0
0.9
1.5
2.1
-0.2
-0.4
-0.6
-0.7
3.5
17.5
18.7
18.6
17.7
0.0
0.0
0.0
0.0
0.0
0.0
4.2
4.6
4.3
Attributable profit
-0.2
-0.4
-0.6
-0.7
3.5
17.5
14.5
14.0
13.5
Normalised earnings
-0.2
-0.4
-0.6
-0.7
3.5
17.5
14.5
14.0
13.5
Normalised EPS
-0.1
-0.2
-0.2
-0.2
0.8
4.1
3.4
3.3
3.2
0.0
0.0
0.0
0.0
0.0
0.0
0.4
0.4
0.4
PBIT Net interest Pre-tax Tax
DPS Balance sheet (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Fixed assets
0.2
0.7
3.1
13.6
22.0
20.6
20.4
20.8
21.6
Stocks
0.0
0.0
0.0
1.0
1.0
2.0
2.2
2.4
2.5
Trade Debtors
0.0
0.0
0.2
1.2
1.5
3.0
3.4
3.6
3.7
Cash
0.0
1.3
4.0
6.8
10.6
29.6
41.5
53.8
65.3
Other
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Current assets
0.0
1.3
4.2
9.0
13.1
34.6
47.2
59.8
71.5
Short-term debt
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
0.3
Trade creditors
0.0
0.0
0.0
0.0
0.5
3.0
2.6
3.3
3.8
Tax and other
0.1
0.1
0.2
0.2
0.2
0.2
0.2
0.2
0.2
Current liabilities
0.4
0.4
0.4
0.4
1.0
3.4
3.0
3.8
4.3
Long term liabilities
0.0
0.0
1.1
7.1
7.1
7.1
7.1
7.1
7.1
Net Assets
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
Shareholders' funds
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Equity Interests
-0.1
1.5
5.8
15.1
27.0
44.6
57.4
69.8
81.7
Cash Flow (£m)
2003
2004
2005
2006E
2007E
2008E
2009E
2010E
2011E
Operating profit
-0.2
-0.4
-0.8
-0.9
3.6
17.5
17.8
17.1
15.7
Dep'n and Amortisation
0.0
0.0
0.0
0.0
1.8
2.9
2.7
2.7
2.8
Other non-cash
0.0
0.0
0.1
0.0
0.0
0.0
0.0
0.0
0.0
Minorities
Change in working cap
0.3
0.0
-0.2
-2.0
0.2
0.0
-1.0
0.3
0.3
Operating cash flow
0.1
-0.4
-0.9
-2.9
5.7
20.4
19.5
20.1
18.8
Net interest and dividends
0.0
0.0
0.1
0.2
-0.2
0.0
-0.8
-0.2
0.5
Taxation
0.0
0.0
0.0
0.0
0.0
0.0
-4.2
-4.6
-4.3
Net capital expenditure
-0.1
-0.5
-1.3
-10.5
-7.2
-1.5
-2.6
-3.1
-3.5
Acquisitions/disposals
0.0
0.0
0.0
0.0
-3.0
0.0
0.0
0.0
0.0
0.0
-0.9
-2.0
-13.2
-4.7
18.9
11.9
12.2
11.5
Debt raised
0.0
0.0
0.0
6.0
0.0
0.0
0.0
0.0
0.0
Shares issued
0.0
2.1
4.8
10.0
8.5
0.0
0.0
0.0
0.0
Cash flow
0.0
1.2
2.8
2.8
3.8
18.9
12.0
12.2
11.5
Cash at end of year
0.0
1.3
4.0
6.8
10.6
29.6
41.5
53.8
65.3
Source: Company data and Seymour Pierce Limited estimates
3
Seymour Pierce Research
Key to material interests 1. The analyst has a personal holding of the securities issued by the company, or of derivatives related to such securities. 2. Seymour Pierce Limited or an affiliate owns more than 5% of the issued share capital of the company. 3. Seymour Pierce Limited or an affiliate is party to an agreement with the company relating to the provision of investment banking services, or has been party to such an agreement within the past 12 months. Our corporate broking agreements include a provision that we will prepare and publish research at such times as we consider appropriate. 4. Seymour Pierce or an affiliate has been lead manager or co-lead manager of a publicly disclosed offer of securities for the company within the past 12 months. 5. Seymour Pierce is a market maker or liquidity provider in the securities issued by the company. 6. Seymour Pierce is party to an agreement with the company relating to the production of research recommendations. Distribution of ratings Our research ratings are defined with reference to the amount by which we expect the absolute return to change over the next 12 months: Rating
Definition
Buy
Absolute return expected to increase by more than 10%
Outperform
Absolute return expected to increase by between 5% and 10%
Hold
Absolute return expected to change by between -5% and +5%
Underperform
Absolute return expected to decrease by between 5% and 10%
Sell
Absolute return expected to decrease by more than 10%
As at 31 March 2007 the distribution of all our published recommendations is as follows:
Rating
Proportion of recommendations
Proportion of these provided with investment banking services
Buy
36%
58%
Outperform
24%
19%
Hold
27%
28%
Underperform
7%
6%
Sell
1%
0%
Important Notes Our research recommendations are issued and approved for distribution within the United Kingdom by Seymour Pierce Limited only to market counterparties and intermediate customers as defined under the FSA rules. Our research is not directed at, may not be suitable for and should not be relied upon by any other person. The information contained in our research is compiled from a number of sources and is believed to be correct, but cannot be guaranteed. It is not to be construed as an offer, invitation or solicitation to buy or sell any securities of any of the companies referred to within it. All statements made and opinions expressed are made as at the date on the face of the material and are subject to change without notice. Where prices of securities are mentioned, these are the mid-market prices as at the close-of-business on the business day immediately preceding the date of the research. The meanings of our research ratings, together with the proportion of our recommendations issued during the previous quarter carrying each rating, is set out on our website at www.seymourpierce.com. Seymour Pierce Limited and/or its associated companies and ultimate holding company may from time-to-time provide investment or other services to, or solicit such business from, any of the companies referred to in research material. In addition, they and/or their directors and employees and/or any connected persons may have an interest in the securities of any of the companies in the report and may from time-to-time add to or dispose of such interests. Details of the significant conflicts relating to the companies that we research are set out on our website www.seymourpierce.com, together with a summary of our policies for managing conflicts of interest. Seymour Pierce does not meet all of the FSA standards for managing conflicts of interest, as a result our research should not be regarded as an impartial or objective assessment of the value or prospects of its subject matter, though of course we will always ensure that it remains clear, fair and not misleading. Seymour Pierce Limited is authorised and regulated by the Financial Services Authority, and is a member of the London Stock Exchange.
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