Newcrest ASX:NCM has demonstrated what is in the future for Gold miners, Bigger Profits! The strong rise in gold has to some extent escaped the eye of investors and many Gold companies remain very good value.

Newcrest Mining, the world's third-biggest gold miner, has reported a 36 per cent rise in full-year underlying profit, thanks to soaring gold prices and its takeover last year of Lihir Gold, in line with market forecasts.

Newcrest shares edged higher in morning trade, adding as much as 47 cents, or 1.2 per cent, to $41.20.

It said it expects to produce 2.775-2.925 million ounces of gold in the year ahead, up from 2.53 million ounces in the 2011 financial year, with cash costs expected to be roughly line with 2011.

It flagged it would step up capital spending and exploration spending in the year ahead.

Underlying profit rose to $1.06 billion for the year to June 2011 from $776 million a year earlier, compared with analysts' forecasts around $1.07 billion.

It also announced a special dividend of 20 cents a share, on top of a final dividend of 20 cents.

Cashflow from operations was 33 per cent higher, at $1.729 million. Gold production of 2,527,352 ounces was 43 per cent higher than the previous year, reflecting the integration of the former Lihir assets and increased production from new mines at Ridgeway Deeps and Hidden Valley.

Copper production of 75,631 tonnes was in line with annual guidance, Newcrest said.

Capital expenditure will increase from $1.89 billion to $2-2.2 billion in 2012 associated with the completion of the Cadia Valley mine and Lihir plan expansion.

Exploration expenditure is expected to increase to $160-$170 million compared to $126 million in 2011.

Valuation Ratios

 CompanyIndustrySectorS&P 500
P/E Ratio (TTM)28.322,438.61906.2215.03
P/E High - Last 5 Yrs.109.9389.8999.9899.33
P/E Low - Last 5 Yrs.30.5669.8334.6312.66
 
Beta0.350.931.241.21
 
Price to Sales (TTM)8.70399.20168.432.10
Price to Book (MRQ)2.25306.27143.412.96
Price to Tangible Book (MRQ)3.12322.84168.184.79
Price to Cash Flow (TTM)23.651,313.96565.7610.08
Price to Free Cash Flow (TTM)91.992,145.011,479.9941.77
 
% Owned Institutions----

Dividends

 CompanyIndustrySectorS&P 500
Dividend Yield0.741.471.572.21
Dividend Yield - 5 Year Avg.0.442.151.722.37
Dividend 5 Year Growth Rate40.21-2.988.55-1.56
 
Payout Ratio(TTM)28.0320.7520.5530.71

Growth Rates

 CompanyIndustrySectorS&P 500
Sales (MRQ) vs Qtr. 1 Yr. Ago65.5829.8825.9612.74
Sales (TTM) vs TTM 1 Yr. Ago47.7140.3641.4910.74
Sales - 5 Yr. Growth Rate23.2416.1014.397.87
 
EPS (MRQ) vs Qtr. 1 Yr. Ago79.61149.7669.4311.86
EPS (TTM) vs TTM 1 Yr. Ago158.01---
EPS - 5 Yr. Growth Rate26.153.7815.716.47
 
Capital Spending - 5 Yr. Growth Rate8.0915.5016.034.02

Financial Strength

 CompanyIndustrySectorS&P 500
Quick Ratio (MRQ)1.601.271.130.72
Current Ratio (MRQ)2.762.221.671.07
LT Debt to Equity (MRQ)2.5319.5019.07111.18
Total Debt to Equity (MRQ)2.5622.3030.27150.40
Interest Coverage (TTM)-0.160.0823.17

Profitability Ratios

 CompanyIndustrySectorS&P 500
Gross Margin (TTM)45.3528.7724.1134.95
Gross Margin - 5 Yr. Avg.37.2824.4234.5833.51
 
EBITD Margin (TTM)53.00---
EBITD - 5 Yr. Avg43.4522.5524.4820.83
 
Operating Margin (TTM)33.2218.9221.56-
Operating Margin - 5 Yr. Avg.15.2213.2017.9615.69
 
Pre-Tax Margin (TTM)33.2219.9421.7515.59
Pre-Tax Margin - 5 Yr. Avg.15.2214.6418.1415.25
 
Net Profit Margin (TTM)24.4713.3915.6611.76
Net Profit Margin - 5 Yr. Avg.11.397.7312.2311.34
 
Effective Tax Rate (TTM)26.3424.4325.6022.24
Effecitve Tax Rate - 5 Yr. Avg.25.1720.6926.6024.87

Efficiency

 CompanyIndustrySectorS&P 500
Revenue/Employee (TTM)471,132732,464562,008,510737,824
Net Income/Employee (TTM)115,276125,48263,476,43399,866
 
Receivable Turnover (TTM)12.2614.918.699.20
Inventory Turnover (TTM)4.124.784.118.28
Asset Turnover (TTM)0.320.560.800.61

Management Effectiveness

 CompanyIndustrySectorS&P 500
Return on Assets (TTM)7.789.8011.587.09
Return on Assets - 5 Yr. Avg.5.437.9610.646.39
 
Return on Investment (TTM)8.1311.7816.099.27
Return on Investment - 5 Yr. Avg.6.199.1214.338.46
 
Return on Equity (TTM)8.9216.8219.4724.80
Return on Equity - 5 Yr. Avg.9.829.4518.2520.63

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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