Fitzroy River Corporation Limited (ASX: FZR) has a 47.76% shareholding and voting interest in Royalco Resources Limited (ASX: RCO). Fitzroy has announced today, on 9th April 2019, that it has signed an agreement related to sale with Royal Energy Pty Ltd, whereby the whole royalty Interest held by Royalco will be acquired by Royal Energy for a cash price of $5.8 million.
The royalty interest is a 1% interest in the Weeks Petroleum Royalty, a royalty which dates back to 1960, representing a 2.5% overriding royalty on hydrocarbon production from the Bass Strait region of Australia.
The sale is subject to the conditions that Royal Energy complete its funding arrangements for the acquisition and Royalco shareholders approving the sale at an extraordinary general meeting. Fitzroy has advised Royalco that it currently intends to vote in favour of the various resolutions at the EGM in the absence of a superior proposal.
In the recent past, the company has reported its activities during the quarter ended 31 December 2018. The company made a significant progress during the quarter, under its on-market share buy-back announced to the ASX on 9 August 2018, in which Fitzroy aims to acquire up to 8,845,000 shares, which represent approximately 10% of all shares on issue prior to the commencement of the buy-back.
Moreover, the company bought back a total of 707,662 shares and has purchased further 285,110 shares since the end of the quarter. Total shares purchased under the buy-back till 30 January 2019 were 992,772 for a total consideration of just under $185,000.
The buy-back remains in place until 28 August 2019, unless it is terminated earlier. The buy-back gives the company the flexibility to buy back its ordinary shares if it is beneficial to the efficient capital management. Hence, the buy-back is dependent on the market conditions, volumes, price and other relevant conditions from time-to-time.
Further, during the half-year period till 31st December 2018, the company reported royalty income of $176,000 as compared to $79,000 in the prior corresponding half of 2017. The company has also reported a loss of $726,000 in 1HFY19 as compared to a profit after tax of $480,000 in the 1H FY18. During the financial half year, the company bought back 707,662 fully paid ordinary shares at a cost of $132,112.
On the price-performance front, the stock of Fitzroy River Corporation Limited, at market close on 9th April 2019, was trading at A$0.210, an increase of 10.526% during the day’s trade with a market capitalisation of A$16.57 million. The stock has generated a negative YTD return of 5.0% with a return of 2.70% over the past six-month period. Its 52-week high price stands at A$0.275, and 52-week low price stands at A$0.150, with an average trading volume of 33,365.
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