RMS’s FY24 result was solid with Ebit and underlying earnings 10% and 20% higher than we had forecast, respectively. The strong cash result enabled RMS to deliver a record dividend of A$0.05/share. We have lifted our dividend payout ratio assumption for FY25 and beyond to reflect the higher payout, which should see RMS deliver a 3% dividend yield in FY25. The depreciation rate in the 2HFY25 at Mt Magnet was higher than we expected, and we have lifted our deprecation expenses to reflect this going forward, which has driven 10-11% cuts to near-term earnings. RMS’s investment in Spartan Resources (SPR AU, HOLD), now accounts for ~12% of our valuation, and what pathway RMS takes from here with this investment creates uncertainty in our view. We reiterate our HOLD rating and A$2.20 price target after incorporating the FY24 result.
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