Pan Pacific Aggregates

HOLD

26/04/2010 Robert Tyerman

As foreshadowed by Growth Company Investor, Pan Pacific Aggregates has turned an annual loss of £3.3m into a £1.1m pre-tax profit.

This turnaround by the acquisitive Canadian quarrying company, headed by London financier and former English China Clay luminary William Voaden, came as the result of financial inflows as investors, including City dealer Keith Catchpole, backed equity fund raisings totalling £4.1m at rock-bottom prices to enable the bombed-out AIM counter to pursue its recovery strategy.

Pan Pacific’s operating revenues fell last year from a meagre £252,000 to an invisible £2,000, but Voaden says the company’s Quadling (formerly Pumptown) granite quarry in the Canadian province of British Columbia is now operational and winning orders at the rate of C$90,000 (£58,800) for 15,000 tonnes a day and negotiating long-term contracts.

According to Voaden, who also runs investment concern VSA Capital, the quarry’s proximity to British Columbia’s Highway One and access to the province’s largest city, Vancouver, are helping win business. Pan Pacific, which was able to cut outstanding loan notes from £4.6m to £725,000 in 2009, ended the year with net cash up sevenfold to £1.7m and has made it clear it is eyeing profitable and complementary acquisitions.

Floated five years ago at 80p, Pan Pacific shares collapsed to 0.25p at one point after the company’s original strategy had been scrapped and the Pumptown/Quadling project ran into a succession of pitfalls. Highlighted by Growth Company Investor as a speculation at 0.68p in November, they are now marking time at the same price, but could make progress once the granite deals begin to show through.