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Tharisa (THS) 152p
Gain to date: 96%
Original entry price: Buy at 77.5p, 29 September 2016
Shares in chrome and platinum producer Tharisa (THS) have surged after the miner said it expects earnings per share (EPS) for the 2016 financial year to more than double versus the previous year. It also said debt costs would fall after proving to financiers that its mine works properly.
Tharisa says it expects to report 5c (+/- 10% range) for its 2016 results on 29 November. This is much lower than Peel Hunt’s 10.7c forecast. ‘In a conversation with management we suspect that some of the miss comes from assuming stronger revenues than is actually the case,’ says the broker. ‘It seems some sales we expected in 2016 financial year have been held over until 2017 financial year.’
Peel Hunt says its forecasts exclude the impact of foreign exchange movements and UK stock market listing costs.
Metallurgical chrome prices have raced ahead in 2016 and continue to rise – implying a good start to Tharisa’s new financial year.
Tharisa has sold November and December deliveries at $295 per tonne, according to the broker. In comparison, it achieved an average price of $125 per tonne in its 2016 financial year.
Spot pricing has risen beyond $350 per tonne since the miner locked in prices for the remainder of calendar 2016, adds Peel Hunt. (DC)
We remain bullish given the positive outlook for metal prices and Tharisa's focus on improving operational efficiency.
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