Capital Ltd H1 2022 revenue of $138.1 million, up 39.9%

Capital Ltd (LON:CAPD), a leading mining services company, has announced half year results for the period 1 January to 30 June 2022. 


H1 2022H1 2021% change
Revenue ($ m)138.198.739.9%
EBITDA1 ($ m)41.428.445.8%
EBIT1 ($ m)
Adjusted net profit2 ($ m)19.912.756.7%
Investment (Losses) / Gains ($ m)(10.3)5.7(280.7)%
Net Profit After Tax ($ m)9.718.4(47.3)%
Cash From Operations ($ m)34.95.4546.3%
Capex3 ($ m)22.635.0(35.4)%
Earnings per Share  
Basic (adjusted)2 (cents)10.56.756.7%
Basic (cents)4.79.8(52.0)%
Interim Dividend per Share (cents)
Adjusted ROCE (%) 424.622.59.4%
Net cash / (debt) ($m)(36.4)(32.8)11.0%
Net Debt/Equity (%)16.320.1(18.9)%
Investments ($m)47.331.052.6%
Adjusted Net Cash (Including Investments) ($ m)10.9(1.8)(12.2)%

*All amounts are in US dollars unless otherwise stated

(1) EBITDA, EBIT and Net Cash are non-IFRS financial measures and should not be used in isolation or as a substitute for Capital Limited financial results presented in accordance with IFRS.

(2) Adjusted net profit and adjusted earnings per share are pre investment losses and gains.

(3) Capital expenditure (Capex) consists of purchase of PPE for cash, prepayments for PPE and financed capex.

(4) Adjusted ROCE is calculated utilising annualised half year EBIT and excludes investments at fair value from assets.

Financial Overview

·      H1 2022 revenue of $138.1 million, up 39.9% on H1 2021 ($98.7 million);

·      Full year revenue guidance increased to $280 – $290 million (from $270 – 280 million);

·      Non-drilling revenue contributed 28% of total revenue for H1 2022, compared with H1 2021 (17%), driven by growth YoY in mining services and MSALABS;

·      H1 2022 EBITDA of $41.4 million, up 45.8% on H1 2021 ($28.4 million);

·      EBITDA margins increased to 30.0% from 28.8% in H1 2021;

·      Net losses from equity investments of $10.3 million in H1 2022 (unrealised), decreasing the value of Group strategic investments to $47.3 million, net of cash proceeds, as of 30 June 2022 (31 December 2021: $60.2 million);

·      Adjusted Net Profit After Tax (NPAT) $19.9 million (adjusted for changes in investments), an increase of 56.7% on H1 2021 ($12.7 million);

·      Capex of $22.6 million (H1 2021: $35.0 million) including prepayments and financed capex;

·      Cash generated from operations of $34.9 million (H1 2021: $5.4 million), a significant increase YoY and stronger cash conversion despite a further build in working capital with inventory of $51.5 million, up 35% on FY21 ($37.9 million) to accommodate larger revenues and supply chain constraints;

·      Net debt of $36.4 million (H1 2021: $32.8 million and year end 2021 $31.9 million);

·      Adjusted Net cash (including investments) of $10.9 million (H1 2021: adjusted net debt (including investments) of $1.8 million);

·      Adjusted ROCE of 24.6% (H1 2021: 22.5%); and

·      Declared an interim dividend of 1.3 cents per share, to be paid on 3 October 2022 to shareholders registered on 2 September 2022 (up 8.3% on 2021 interim dividend 1.2 cents per share). 

Operational & Strategic Review 

·      Rig fleet utilisation was 83% in H1 2022, an increase of 13.7% on H1 2021 (73%) and 17.8% on H2 2021 (77%);

·      Rig count increased from 110 to 116 through Q2 2022, net of depletion;

·      Safety performance remains world-class with the Group TRIFR at 1.8 in H1 2022. Capital’s target is zero harm across the Group;

·      Previously announced contracts:

·      A three-year comprehensive drilling services contract with AngloGold Ashanti at the Geita gold mine: Our Tanzanian subsidiary company, CMS (Tanzania) Limited, has been awarded a contract to provide a full range of drilling services including development (diamond & reverse circulation), grade control, blast hole and underground drilling. Capital will utilise the existing fleet, which now has a total of 25 rigs on site. It is anticipated to generate ~$150 million over the three-year contract term, making it the second largest award of new business in the Company’s history. 

·      First contract with B2Gold Corporation at the Fekola Gold mine in Mali, one of largest gold mines in Africa:  Capital has been awarded a reverse circulation drilling services contract. 

·      Capital Mining continues to perform strongly

·      Sukari Gold Mine (Egypt) waste mining contract continues to perform well;

·      Capital remains active in the tendering pipeline.

·      MSALABS: Growth outlook improved through expanded relationship with Chrysos  

·      Expanded relationship with Chrysos Corporation:

o  MSALABS recently announced an expansion of its global partnership with Chrysos, now guiding to deploying 21 Chrysos PhotonAssay units by 2025;

o  Rollout of initial six units by year end 2022 on track: In addition to four units already announced at Bulyanhulu Gold Mine (Tanzania), the Morila Gold Mine (Mali), the Kibali Gold Mine (DRC) and Val d’Or (Quebec, Canada):

o  A fifth unit will arrive imminently at Yamoussoukro, Côte d’Ivoire, with facility preparations well advanced;

o  A sixth unit is due to begin installation in Timmins, Canada, by the end of 2022;

·      MSALABS has been awarded a two-year extension to the existing three-year onsite laboratory services contract with Kinross at the Tasiast Gold Mine, Mauritania, subject to final terms and conditions. 

·      Capital Direct Investments (Capital DI): Impacted by general market conditions but strong business development performance

·      The portfolio recorded investment losses (unrealised) of US$10.3 million. The total value of investments (listed and unlisted) was US$47.3 million as of 30 June 2021, versus US$60.2 million at the end of 2021;

·      Over the period Capital continued to rationalize the breadth of holdings and realized cash proceeds from the portfolio, generating net sales after investments of US2.6million, with the proceeds directed toward group capital expenditures.

·      Contract revenues from investee companies again contributed strongly to Group revenues, totalling US$26.4mn over the H1 period.


·      Revenue guidance for 2022 increased to $280 – $290 million (from $270 – 280 million);

·      EBITDA margins are expected to remain in a range of 25-30% going forward;

·      Capital expenditure is now expected to be approximately $50-55 million in 2022. The increase in capex includes additional rig purchases, as well as higher sustaining capex driven by higher than anticipated utilisation of the expanded fleet; 

·      Drill rig fleet size forecast to increase to 120 rigs by the end of 2022, net of depletion;

·      The Sukari earth moving contract continues to perform well at full run rates;

·      MSALABS’s growth trajectory is now underpinned over the next 2-3 years by the expanded partnership with Chrysos. Revenue guidance for 2022 remains $30 million, and is expected to grow to over $80 million per annum from 2025 following the rollout of 21 Chrysos units in conjunction with growth in the traditional laboratories business;

·      Tendering activity across all business units remains robust, with a number of opportunities progressing.

Commenting on the results, Jamie Boyton, Executive Chairman of Capital Limited, said:

“We have been very pleased with the performance of the Group through the first half of 2022, not only because we’ve again delivered another strong half year, but we have also taken decisive steps to ensuring a stronger company in the years to come, particularly in our drilling business and in MSALABS.

In drilling we have taken advantage of the strength we have seen in underlying demand to focus on contract selection and rotate our portfolio. Through the period we have commenced operations at two more of Africa’s largest gold mines, Kibali and Fekola, that are well positioned to operate consistently throughout the cycle. In addition, we have increased operations at Tier-1 gold and non-gold deposits with strong growth potential including Predictive Discovery’s Bankan project, Goulamina (lithium) and Kabanga (nickel). This focus on growing long term contracts and partnerships with blue-chip customers remains core to the business model at Capital, irrespective of levels of activity across the market, delivering lower volatility in earnings and sustainability of the business through the cycles.

Similarly, MSALABS has now secured a multi-year growth trajectory driven primarily by the rollout of the revolutionary Chrysos PhotonAssay units. The expanded relationship with Chrysos means MSALABS will now deploy 21 units into the market into 2025. In addition to growth in its existing geochemistry business, this should drive annual revenues in excess of $80 million by 2025, an impressive outlook for a business that generated just $3 million at the time of the controlling interest acquisition in 2019.

The underlying demand in the market continues to be encouraging, as is evident from the high utilisation rates the Group delivered in the first half. While there will be some seasonal slowdown through the third quarter, the tender pipeline remains buoyant across drilling, mining and laboratories and as a result of this strong demand, we are raising our revenue guidance for 2022 to $280-290 million. We have also lifted our capex guidance to $50-55 million, which includes higher sustaining capex on the expanded fleet, and additional rigs to replace expedited rig replacements. In the strong demand environment we are currently experiencing, we have decided to further replenish our fleet to ensure both high reliability as well as a peer leading safety performance which remains core to our operations.

Our capital allocation strategy continually targets the best returns for our shareholders. We are excited by the outlook and the market backdrop and will continue to target new opportunities while maintaining a strong balance sheet and a balanced capital allocation policy. Therefore, in addition to funding further growth, given the strength of the underlying business, we announced a buyback at the beginning of the year and we have today also announced an interim dividend to shareholders of 1.3 cents per share.

Capital Limited will be hosting a live webcast presentation at 09:00 BST on Thursday 18 August 2022, where questions can be submitted through the platform.

The webcast presentation link:

Participants may join the webcast approximately five minutes before the commencement time. A copy of the Company’s presentation will be available on

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