Pan African Resources (PAF) AI Stock Analysis

• Market Cap: £734.84M
• Dividend Yield: 2.25%
• Average Volume (3M): 8.18M
• Price to Earnings (P/E): 12.8
• Beta (1Y): 1.40
• Revenue Growth: 0.07%
• EPS Growth: 6.71%
• Country: UK
• Employees: 2,700
• Sector: Basic Materials
• Sector Strength: 65
• Industry: Mining
• EPS (TTM): 0.03
• Shares Outstanding: 2,029,317,300
• 10 Day Avg. Volume: 11,687,041
• 30 Day Avg. Volume: 8,181,928
• PEG Ratio: 1.90
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.78
• Price to Cash Flow (P/CF): -44.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 47.00p
• Price Target Upside: 13.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Pan African Resources presents a balanced investment case with strengths in financial stability and valuation. The company's strategic growth initiatives and moderate technical indicators offer a positive outlook, though potential risks in cash flow management and recent production challenges should be monitored. The stock's reasonable valuation and dividend yield add to its appeal, making it an attractive option for investors seeking exposure in the mining industry.

Pan African Resources Business Overview & Revenue Model

Company Description

Pan African Resources (PAF) is a mid-tier African-focused gold producer listed on the London Stock Exchange and the Johannesburg Stock Exchange. The company operates a portfolio of high-quality, low-cost operations and projects across South Africa. Its core activities involve the exploration, development, and production of precious metals, primarily gold, with a focus on sustainable and responsible mining practices.

How the Company Makes Money

Pan African Resources generates revenue primarily through the extraction and sale of gold. The company's key revenue streams include gold production from its various mining operations, such as the Barberton Mines and the Evander Gold Mining operations. Revenues are driven by the volume of gold produced and the prevailing market prices for gold. Additionally, the company may engage in the sale of by-products recovered during the gold extraction process, such as silver. Significant factors contributing to its earnings include efficient cost management, optimizing production processes, and potential strategic partnerships for exploration and development projects.

Pan African Resources Financial Statement Overview

Summary

Pan African Resources is financially stable with strong profitability and a solid balance sheet. Revenue and profit growth are healthy, though some volatility exists. The company maintains a conservative debt level, but recent increases warrant monitoring. Cash flow management needs improvement, especially regarding free cash flow.

Income Statement

Pan African Resources has demonstrated a commendable revenue growth rate of 16.22% in the latest year, with a strong net profit margin of 21.23%. The gross profit margin is at 35.15%, indicating efficient cost management relative to revenue. However, revenue has shown volatility over the years, notably decreasing from 2022 to 2023. The EBIT and EBITDA margins are strong, reflecting healthy operating and overall profitability.

Balance Sheet

The company's debt-to-equity ratio is 0.36, which suggests a conservative level of leverage. The return on equity (ROE) is robust at 21.73%, indicating effective use of equity to generate profits. The equity ratio stands at 53.23%, showing a balanced use of debt and equity in financing assets. However, the increase in total debt in recent years poses a potential risk if not managed properly.

Cash Flow

Operating cash flow covers net income well, with an operating cash flow to net income ratio of 1.14. However, the company has experienced negative free cash flow growth due to significant capital expenditures, which can strain liquidity if it continues. The free cash flow to net income ratio is negative, indicating cash outflows exceeding the net income, which could be concerning if sustained.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
435.09M	373.80M	321.61M	376.37M	368.91M	274.11M
	Gross Profit
150.13M	131.37M	102.42M	121.40M	124.57M	93.67M
	EBIT
153.41M	115.59M	95.19M	112.67M	112.51M	65.45M
	EBITDA
170.13M	143.01M	115.17M	105.22M	144.90M	69.36M
	Net Income Common Stockholders
90.43M	79.38M	61.14M	75.14M	74.69M	44.29M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
―	26.33M	34.77M	26.99M	35.13M	33.53M
	Total Assets
498.20M	686.07M	500.94M	457.09M	483.09M	368.62M
	Total Debt
182.71M	130.73M	56.84M	38.96M	58.69M	89.25M
	Net Debt
178.11M	104.40M	22.07M	11.97M	23.55M	55.72M
	Total Liabilities
285.32M	321.97M	206.34M	162.48M	199.46M	185.00M
	Stockholders Equity
212.88M	365.22M	295.12M	294.78M	283.63M	183.62M
Cash Flow		Free Cash Flow
10.63M	-75.44M	-12.70M	27.32M	37.80M	19.10M
	Operating Cash Flow
164.79M	90.80M	100.12M	110.01M	82.24M	53.83M
	Investing Cash Flow
-150.32M	-169.38M	-112.73M	-81.39M	-44.15M	-30.64M
	Financing Cash Flow
-15.49M	68.98M	24.87M	-32.36M	-44.47M	3.34M

Pan African Resources Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 41.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:PAF, the sentiment is Positive. The current price of 41.35 is above the 20-day moving average (MA) of 36.88, above the 50-day MA of 37.49, and above the 200-day MA of 32.75, indicating a bullish trend. The MACD of 1.19 indicates Negative momentum. The RSI at 62.74 is Neutral, neither overbought nor oversold. The STOCH value of 90.12 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:PAF.

Pan African Resources Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAF	71 Outperform	£734.84M	12.77	21.65%	2.25%	0.07%	6.71%
HOC	68 Neutral	£1.29B	17.31	15.70%	―	31.84%	―
Sector *	47 Neutral	$2.68B	-3.93	-26.14%	3.26%	2.31%	-28.79%

Pan African Resources Corporate Events

Pan African Resources Sees Major Shareholder Increase Stake

Pan African Resources PLC, a UK-based company, has announced a significant change in its shareholder structure. The Public Investment Corporation SOC Limited, based in Pretoria, South Africa, has increased its voting rights in the company from 9.980% to 12.393% as of March 3, 2025. This acquisition of voting rights may impact the company’s decision-making processes and influence its strategic direction.

Pan African Resources Anticipates Growth Amid Operational Challenges

Pan African Resources reported a slight 3.3% decrease in gold production for the six months ending 31 December 2024, primarily due to operational challenges at Evander Mines. However, the company anticipates significant production improvements in H2FY2025 and FY2026, backed by the full commissioning of the Evander Mines subvertical shaft and the accelerated Mogale Tailings Retreatment operation. Financially, the company’s revenue remained robust despite a decrease in production, with a 10% increase in profit attributed to a gain on acquisition from the TCMG transaction. The company faces increased costs due to operational disruptions and exchange rate effects but expects cost reductions in H2FY2025. Looking ahead, strategic growth projects such as the expansion of the Mogale Tailings Retreatment and the Barberton Tailings Retreatment Plant are underway, alongside the accelerated construction of the Nobles Gold processing plant in Australia, aiming to significantly boost future production capacity.

Pan African Resources Reports Mixed Earnings for H2 2024

Pan African Resources PLC has announced its trading statement for the six months ending December 31, 2024. The company reported an increase in earnings per share (EPS) by 5% to 15% compared to the same period last year, while headline earnings per share (HEPS) saw a significant decrease of 38% to 49%, attributed to an 18% drop in gold sales and costs associated with a synthetic forward transaction. Despite these challenges, the company is optimistic about improved production in the second half of FY2025 and FY2026, with new projects ramping up and contributing to future growth.

Pan African Resources Notified of Change in Major Shareholder Holdings

Pan African Resources has been notified of a change in major holdings by Allan Gray Proprietary Limited, a significant shareholder registered in South Africa, which has adjusted its voting rights in the company. The voting rights have decreased from 15.28% to 14.97%, indicating a minor reduction in their stake, potentially impacting voting dynamics and shareholder influence.

Pan African Resources Sees Changes in Major Holdings

Pan African Resources PLC has announced a change in major holdings, as Van Eck Associates Corporation, based in New York, USA, has adjusted its voting rights from 5.901% to 4.765%. This adjustment reflects a change in the ownership breakdown through various financial instruments and may impact the company’s governance and stakeholder interest.