Tre­bles all round

Financial Mail - - DIAMONDS & DOGS -

The fes­tive sea­son seems well and truly to have ar­rived over at Carl­ton House Ter­race, with Mark Cu­ti­fani’s in­vestor brief­ing stop­ping just short of putting on the red suit and white beard.

It’s clearly mince pies and tre­bles all round for in­vestors who were brave enough to pile in at the bot­tom of the cy­cle back in Jan­u­ary 2016, when the share price ap­peared to be tum­bling to­wards the deck at a ver­tig­i­nous rate and the only ques­tion was just how low could it go.

A five-year view paints a rather dif­fer­ent pic­ture, with the price now back to ap­prox­i­mately where it was be­fore it went into free fall. Yet Cu­ti­fani picks five years as the time frame in which he states they have com­pletely trans­formed the qual­ity of the as­set port­fo­lio and the com­pany’s per­for­mance as a whole. This is now a highly com­pet­i­tive busi­ness, with mar­gins among the best in the in­dus­try, and Cu­ti­fani is aim­ing to add $3bn-$4bn of in­cre­men­tal an­nual earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion by 2022.

The bal­ance sheet is look­ing a lot health­ier, with net debt re­duced over the past three years by $9bn, and some $2bn of div­i­dends hav­ing been paid to share­hold­ers over the past 18 months. The com­pany is ex­pect­ing the next step change in its per­for­mance to be driven by the de­ploy­ment of its Fu­tures­mart Min­ing tech­nolo­gies and dig­i­tal­i­sa­tion, which will trans­form the way it mines, pro­cesses and mar­kets its prod­ucts.

This is a far cry from the wail­ing and gnash­ing of teeth that was heard three years ago, and it’s been a re­mark­ably strong re­cov­ery.

This is now a highly com­pet­i­tive busi­ness, with mar­gins among the best in the in­dus­try

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