Western Areas Limited (WSA)

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General Information
Company Name: Western Areas Limited
Stock Code: WSA
Website: www.westernareas.com.au
GICS Sub-Industry: Diversified Metals & Mining
Market Cap ($M): 1,000
Equiv. Shares (M): 233

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 4.300 $ 4.300 $ 4.315 $ 4.230 $ 4.330 834,707 $ -0.030  -0.693 %

Current Broker Consensus Recommendation more
Recommendation: Buy (2.2)
Recommendation Date: 26th Nov 2014
Brokers Surveyed: 5

Company Overview

Business Description:
Western Areas Limited (WSA, formerly Western Areas NL) is an Australian-based nickel sulphide explorer and producer. The core asset is the 100% owned Forrestania NickelOperation which comprises two operating mines, producing approx 25,000tpa nickel in ore. WSA also has interest in projects overseas through investments in Mustang Minerals (Canada) and FinnAust Mining (Finland), and 100% interest in Bioheap Ltd, a patented bacterial leaching technology.

Strategy Analysis:
Western Areas is engaged in the acquisition, exploration and development of nickel sulphide deposits in established mineral provinces in Australia and Canada. The company´s main focus is exploring for and developing high grade massive nickel sulphide deposits at the Forrestania Project in Western Australia and exploring for nickel, copper and platinum group element deposits elsewhere. Western Areas reported NPAT down 91% to $2.13m for the half-year ended 31 December 2012. The decrease was primarily due to a fall in commodity prices and a non-cash impairment of $6m. Revenues from ordinary activities were $158.96m, up 7% from the same period last year. Diluted EPS was 1.1 cents compared to 13.4 cents last year. Net operating cash flow was $48.08m compared to $64.41m last year. The interim dividend declared was 2 cents compared with 4 cents last year.

Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 119.5 51.0 44.2 8.4 25.0 5.8 100.0
2015  F 82.9 35.3 191.6 12.2 20.0 4.7 100.0
2014  A 25.5 12.1 -475.0 26.2 5.0 1.6 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
BHP Billiton (BHP) $104,476 M 0.1223 -0.1577 0.0963 12.1653 14.4437 13.1748 3.95 4.45 4.62
Iluka Resources (ILU) $2,943 M -0.6600 -0.9279 11.0995 22.9214 318.0995 26.2902 1.28 1.97 3.69
Rio Tinto (RIO) $25,444 M 0.5848 -0.2966 0.0923 7.6043 10.8104 9.8964 3.67 4.11 4.39
Sims Metal Management (SGM) $2,185 M 3.0215 1.0051 0.3254 31.7291 15.8246 11.9396 0.94 2.58 3.92
Western Areas (WSA) $1,007 M 4.5758 1.2189 0.5608 26.7780 12.0680 7.7321 1.15 3.23 5.39

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
WSA 0.36 17.7 2.68 0.21 2.82
Market 0.92 15.3 1.20 1.77 1.54
Sector 0.65 12.2 0.74 0.97 2.51

Name Position Start Date
Mr David Clifford Southam Finance Director 15 November 2010
Mr Daniel Richard Lougher Managing Director 19 May 2008
Mr Julian Philip Hanna Non-Executive Director 24 December 1999
Mr Craig Leslie Readhead Non-Executive Director 26 June 2014
Mr Robin Edward Dunbar Non-Executive Director 12 December 2005
Mr Timothy Carl Netscher Non-Executive Director 01 August 2014
Mr Richard James Yeates Non-Executive Director 01 October 2009
Mr Ian Alexander Macliver Non-Executive Director,Non-Executive Chairman 01 October 2011

Name Position
Joe Belladonna Chief Financial Officer,Company Secretary
G Marshall General Manager Commercial
C Wilkinson General Manager Exploration
W Jones General Manager Operations

Substantial Shareholders
Holding Name
12,477,922 (5.40%) Schroder Investment Management Australia Limited
16,789,858 (7.20%) Jungle Creek Gold Mines Pty Ltd

Calendar of Events
Date Event
16 October 2015 Report (Annual)
16 October 2015 Report (Quarterly)
24 August 2015 Report (Prelim)
21 July 2015 Report (Quarterly)
28 April 2015 Report (Quarterly)
17 February 2015 Report (Interim)
27 January 2015 Report (Quarterly)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.


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