Energybuild Share Discussion Threads

[lasata] 16/6/2010 09:33

Buy EBG as cheap way into WTN............


Western Coal shows ambitious growth plans while GlaxoSmithKline shares show a good entry point, Questor says buy.

By Garry White, Questor editor
Published: 6:00AM BST 16 Jun 2010

Here's a US stock you can really get your teeth intoQuestor says BUY

Speak to any mining analyst in the City and they will all say a similar thing about bulk commodities such as iron ore and coal. The demand and price outlook is extremely positive - much more positive than base metals.

Questor remains a bull of the coal price – and Aim-listed Canadian group Western Coal has one of the best production growth prospects around.

The company plans to increase its output from 3m tonnes a year to 10m tonnes over the next four to five years. It plans to do this organically and without raising new money. It should be able to do this from cashflow.

The company has also made some strategic acquisitions in the UK. Last week, the company bought the rest of the shares it didn't own in Energybuild, which produces deep-mined anthracite coal and coal from open-pit mining in Wales at Aberpergwm. Western hopes to increase production here too.

The group also bought Aim-listed mining investment group Cambrian last year in an all-share deal.

Western's main assets are found in north-east British Columbia in Canada and West Virginia in the US. The group has a 20-year coal reserve base.

The company offers exposure to the seaborne coking coal market and the US thermal and metallurgical coal markets – the price of all these products is likely to rise as the global recovery takes place.

Last year was not a great year for the company as prices for all types of coal plunged. Revenues fell 25pc to C$438.6m (£290m), which caused profits to slump by about 80pc.

Coal contract prices fell to $126 (£85) per tonne for hard coking coal and $90 per tonne for ultra-low volatile pulverised injection coal, compared with $300 and $248 respectively in the previous year.

Keith Calder, president and chief executive, expects prices will be higher in the upcoming quarter – and it certainly does look like the market has reached a bottom.

Indeed, coal's share of global energy consumption rose last year to its highest level since 1970, according to BP's recently issued Statistical Review of World Energy. The report also noted that China's coal consumption last year rose by 10pc and India's by 7pc, exceeding growth in GDP. This trend is likely to continue.

Western ended last year with C$136.1m of cash and C$82.6m of debt, so the balance sheet is strong. The bulk of the debt is in the form of equipment leases.

In 2011, the group expects to produce between 3.7m and 3.9m tonnes of metallurgical coal from its Canadian operations – a 75pc rise on 2010 production. It expects to increase US coal production by 70pc this year to 1.7m tonnes. This is an ambitious target, but the group believes it is achievable.

For a company that has low debt and a strong growth profile, the shares appear undervalued. They are trading on a March 2011 earnings multiple of just 5 times, falling to 4.3 in 2012.

The analyst community is unanimous in the view that the group is undervalued. Of the eight City analysts that cover the company and are monitored by Bloomberg, all of them have a buy stance and the average price target is 506.6p a share, which is some 60pc above the current share price.

The Aim listing is the company's secondary listing, with the main listing being in Toronto, where the company has a market capitalisation of C$1.6bn. The shares are a buy for their growth prospects.

[lasata] 14/6/2010 14:41

Sold too cheaply by the management - inside job?

Anyway WTN share price rise will now benefit EBG holders and this could be cheap way into the new owners.........

[ian77] 10/6/2010 00:00

Why sell up? I hold 15965 shares worth £3817 at todays close. By my reckoning 1 will own 1330 western worth £4139 also at todays close.

[saucepan] 09/6/2010 09:07

I thought the results were "disappointing" (the Chairman's word) and the offer even more so. Sold up for a small profit.

[daicaprice] 09/6/2010 07:51

24p a share, they got it on the cheap I fear. Not currently holding.

DC

[lasata] 28/5/2010 08:22

Good news in that RNS today

[lasata] 19/5/2010 09:02

3% dividend would be nice.......

There will be plenty of markets for their coal as imported supplies are getting more expensive by the day as £ weakens.

[lasata] 18/5/2010 14:10

Good move and welcome back......

[saucepan] 18/5/2010 10:28

Added a few more this morning

[lasata] 12/5/2010 16:31

FT:

Energybuild added 4.9 per cent to 21½p after the Welsh mining group said a trial with Corus had been successful and it was now in talks with the steelmaker about a deal to supply more coal.

"Energybuild had already announced that it was supplying 15,000 tonnes of coal in a trial to Corus's Port Talbot plant, and on condition of a successful trial it had contracted to supply a further 45,000 tonnes and then 100,000 tonnes," noted Arbuthnot Securities.

[lasata] 26/4/2010 10:02

Soon to break out on chart......

Someone bought 5% of company this a.m. looking at volumes traded

[lasata] 26/4/2010 08:58

Hefty buys at full price............

[moosh2] 19/4/2010 17:54

i agrees with the chart breakout. macd weekly +ve and bullish, and monthly macd could go above the ichi cloud any month! (a good thing, a very good thing!!!!). woooooooooooo!!!

[saucepan] 15/4/2010 17:32

Cheers, lasata; let's hope so.

[lasata] 15/4/2010 13:54

Keep it there Saucy and you will get a pleasant surprise in years to come. About to break out on charts too. Not sure about any broker's notes but coal mining is the place to be at present.

[saucepan] 15/4/2010 13:30

Strong rise today. Is this just value coming out or has there been a broker note or share tip?

(Holding since January - and one in my bottom drawer)

[lasata] 15/4/2010 12:06

Time for EBG to join the coal mining share price rise bonanza........

[lasata] 09/4/2010 09:55

Reading the bulllish article on thermal coal on page 32 of today's FT would suggest EBG are a bargain at this level............

[lasata] 29/3/2010 14:43

I stand corrected and thank you for pointing this out.

Still too cheap if they are to produce 750,000 tonnes p.a.of coal and beyond over next couple of years. Imports will be hard to find - see article above i posted

[jonwig] 29/3/2010 14:38

Lasata - I'd never trust the ADVFN calculation of total no of shares. In my experience, Digital Look gets it right, and says 226.67m which gives a current MCap of £54.4m.

Companies usually update the market though EBG is a bit slow on this. However, they state the no of shares here (Dec 09):

[lasata] 29/3/2010 14:26

I was looking at "fundamental data" at top of this thread

Market Cap: £31.20 M

[kombimatec] 29/3/2010 14:18

226,666,667 @ 23p = £ 52M