Last checked at 27 Aug 2010 07:00
26 August 2010
BISICHI MINING PLC Interim Results for the period ended 30 June 2010 CHALLENGING ENVIRONMENT IN THE FIRST HALF OF 2010
- Bisichi Mining made a small loss before tax of £0.4 million (2009: £4.5 million profit).
- This loss arose for the following reasons:
- One-off costs of £0.6million relating to the closure of the remaining underground mining sections at Black Wattle Colliery
- A late wet season that delayed expansion of Black Wattle's opencast production
- The South African Rand continues to remain strong against the US Dollar
- Coal prices in all of the Black Wattle's markets remained low
- An increase in stockpile levels of export product as a result of poor service delivery from the state rail provider
- Bisichi's UK retail property portfolio continues to perform in
line with the market with no material reduction in rental income
- As a measure of the Board's confidence in the current and future prospectsof the business an interim dividend of 1p per share will be paid on the 4February 2011, to shareholders on the register at the close of business on 7January 2011
Commenting on the results, Michael Heller, Chairman of Bisichi Mining said:
"At the beginning of August 2010 Black Wattle achieved the first domesticprice increase since 2008 which, we hope, is the beginning of an upswing inprices for our domestic product. The physical demand for Black Wattle productfrom our end customers remains strong both domestically and internationally.Your Board continues to regard the future with confidence" END
For further information, please call:
Andrew Heller, Bisichi Mining PLC 020 7415 5030
Bisichi Mining PLC
Half year review - 30 June 2010
The challenging environment experienced in the second half of 2009 by Black Wattle Colliery, Bisichi Mining's direct coal mining operation in South Africa, continued into the first half of 2010. As a result, in the six months ended 30 June 2010, Bisichi Mining made a small loss before tax of £0.4 million (2009: £4.5 million profit).
This loss arose for the following reasons:
- One-off costs of £0.6million relating to the closure of the remaining underground mining sections
- A late wet season that delayed expansion of our own opencast production
- The South African Rand continues to remain strong against the US Dollar
- Coal prices in all of the Black Wattle's markets remained low
- An increase in stockpile levels of export product as a result of poor service delivery from the state rail provider
Although the first half of 2010 has been challenging, your Board remain extremely positive about the future of the company's direct mining operations in South Africa. With all of Black Wattle's remaining opencast permissions being granted in February 2010, Black Wattle continues to expand its own opencast production and take advantage of buy-in opportunities of nearby reserves.
Because of the delayed expansion of additional opencast areas at Black Wattle,overall monthly production through the washing plant, in the first 6 months of2010 averaged 130,000 metric tonnes. I am pleased to report that these newopencast areas are now fully operational allowing Black Wattle the opportunityto increase production through the washing plant to an average monthlyproduction of 160,000 metric tonnes. However, Black Wattle is largelydependent on the ability of Transnet; the sole rail freight provider for coalin South Africa, to deliver our product to the ports and to our end customers.Over the last three months, train cancellations for our product have increasedsignificantly resulting in an increase in our stockpile levels and this hasimposed a strain on our ability to maintain production through the washingplant. Although we have been informed by Transnet that services will improve,production and profitability will continue to be affected until such time asour coal can be delivered and our stockpile levels can be reduced.In the coal markets in which we trade, I can report that at the beginning ofAugust Black Wattle achieved the first domestic price increase since 2008which, we hope, is the beginning of an upswing in prices for our domesticproduct. The physical demand for Black Wattle product from our end customersremains strong both domestically and internationally.
Black Wattle still awaits final regulatory approval for the company's new Black Empowerment partner; shareholders will be informed as soon as approval is received.
Bisichi's UK retail property portfolio, managed by London & Associated Properties PLC, continues to perform in line with the market and, most importantly, there has been no material reduction in rental income.
Finally, I am pleased to inform shareholders that Bisichi Mining will bepaying an interim dividend of 1p per share. This is an indication of theBoard's confidence in the current and future prospects of your business. Thedividend will be paid on the 4 February 2011, to shareholders on the registerat the close of business on 7 January 2011.On behalf of all shareholders I would like to thank all of our staff for theircontribution to the long term success of the company. Your Board continues toregard the future with confidence.Michael Heller Andrew HellerChairman Managing Director26 August 2010Bisichi Mining PLCConsolidated income statementfor the six months ended 30 June 2010 6 months 6 months Year ended ended 30 ended 30 31 June June December 2010 2009 2009 Notes £000 £000 £000 Group revenue 1 15,426 16,629 29,016
Operating costs (15,772) (12,281) (24,616)Operating (loss)/profit on trading activities 1 (346) 4,348 4,400Increase in value of investment properties - - 67Gains on held for trading investments 9 109 425Operating (loss)/profit (337) 4,457 4,892Share of profit in joint ventures - 10 101(Loss)/Profit before interest and taxation 1
(337) 4,467 4,993Interest receivable 84 137 226Interest payable (139) (103) (216)
(Loss)/Profit before taxation (392) 4,501 5,003Income tax expense 2 230 (1,192) (1,330)(Loss)/Profit for the period (162) 3,309 3,673 Earnings per share - basic 3 (1.55) p 31.66 p 35.14 pEarnings per share - diluted 3 (1.55) p 30.96 p 34.35 p Bisichi Mining PLCConsolidated statement of comprehensive incomefor the six months ended 30 June 2010 6 months 6 months Year ended ended 30 ended 30 31 June June December 2010 2009 2009 £000 £000 £000
(Loss)/Profit for the period (162) 3,309 3,673Other comprehensive income:Exchange differences on translation of foreign operations 253 263 530Other comprehensive income for the period net of tax 253 263 530Total comprehensive income for the period 91 3,572 4,203 Bisichi Mining PLCConsolidated Balance Sheetas at 30 June 2010
30 June 30 June 31 December
2010 2009 2009 £000 £000 £000 AssetsNon-current-assets
Value of investment properties attributable to the group 11,868 11,795 11,865 Fair value of head leases 246 234 246 Property 12,114 12,029 12,111 Reserves, plant and equipment 8,597 6,867 8,057 Investments in joint ventures 3,359 3,182 3,259 Other investments 149 358 496 Total non-current assets 24,219 22,436 23,923Current assets Inventories 2,862 1,976 1,139 Trade and other receivables 6,119 3,325 2,060 Corporation tax recoverable 41 41 19 Held for trading investments 519 805 510 Cash and cash equivalents 5,565 6,129 6,609 Total current assets 15,106 12,276 10,337Total assets 39,325 34,712 34,260LiabilitiesCurrent liabilities Borrowings
(2,886) (6,011) (4,593)
Trade and other payables
(7,768) (4,594) (5,571)
Current tax liabilities
(13) (700) (260)
Total current liabilities (10,667) (11,305) (10,424)Non-current liabilities Borrowings (5,753) (725) (533) Provision for rehabilitation (868) (615) (772) Finance lease liabilities (246) (234) (246) Deferred tax liabilities (2,818) (2,497) (2,985) Total non-current liabilities (9,685) (4,071) (4,536)Total liabilities (20,352) (15,376) (14,960)Net assets 18,973 19,336 19,300 Equity Share capital 1,045 1,045 1,045 Translation reserve (432) (952) (685) Other reserves 480 781 480 Retained earnings 17,880 18,462 18,460
Total equity attributable to equity shareholders
18,973 19,336 19,300 Bisichi Mining PLCConsolidated Cash Flow Statementfor the six months ended 30 June 2010 30 June 30 June 31 December 2010 2009 2009 £000 £000 £000 Cash flows from operating activitiesOperating (loss)/profit
(337) 4,457 4,892 Depreciation 986 1,916 2,541 Unrealised gain on investments held for trading (9) (109) (425) Unrealised gain on investment properties - - (67) Share based payment gain/(expense) - 118 (183) (Increase)/ Decrease in net current assets (3,976) 683 3,565 Net interest (received)/paid (55) 34 10 Income tax paid (192) (2,270) (2,359)
Cash flow from operating activities (3,583) 4,829 7,974Cash flows from investing activities (798) (1,059) (2,223)Cash flows from financing activities 2,203 80 (660)Net (decrease)/increase in cash and cash equivalents
(2,178) 3,850 5,091
Cash and cash equivalents brought forward 5,077 (116) (116)Exchange adjustment (25) 30 102Cash and cash equivalents at end of period
2,874 3,764 5,077
Cash and cash equivalentsFor the purposes of the cash flow statement, cash and cash equivalents comprise the following balance sheetamounts:Cash and cash equivalents 5,565 6,129 6,609Bank overdraft (2,691) (2,365) (1,532)
Cash and cash equivalents at end of period
2,874 3,764 5,077
Bisichi Mining PLC CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY for the six months ended 30 June 2010
Share Translation Other Retained capital reserve reserves earnings Total £000 £000 £000 £000 £000 Balance as at 1 January 2009 1,045 (1,215) 663 15,153 15,646Profit for the period - - - 3,309 3,309
Other comprehensive income and - 263 - -
263
expense
Total recognised income and expense - 263 - 3,309
3,572for the yearEquity share options - - 118 - 118Balance at 30 June 2009 1,045 (952) 781 18,462 19,336 Balance as at 1 January 2009 1,045 (1,215) 663 15,153 15,646Revaluation of investment - - - 67 67properties
Other income statement movements - - - 3,606
3,606
Profit for the year - - - 3,673
3,673
Other comprehensive income and - 530 - -
530
expense
Total recognised income and expense - 530 - 3,673
4,203for the yearDividend - - - (366) (366)Equity share options - - (183) - (183)Balance at 31 December 2009 1,045 (685) 480 18,460 19,300Loss for the period - - - (162) (162)
Other comprehensive income and - 253 - -
253
expense
Total recognised income and expense - 253 - (162)
91for the periodDividend - - - (418) (418)Balance at 30 June 2010 1,045 (432) 480 17,880 18,973
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2010 have been prepared in accordance withInternationalFinancial Reporting Standards (IFRS). The principal accounting policies applied are the sameas those setout in the Financial Statements for the year ended 31 December 2009.1. Segmental analysis
For management purposes, the Group is organised into two operating Divisions, Mining and Property. These
Divisions are the primary basis on which the Group reports its segment information. This is consistent with
the way the Group is managed and with the format of the Group's internal financial reporting. 30 June 30 June 31 December 2010 2009 2009 Revenue Mining 14,924 16,113 27,806 Property 492 501 1,005 Other 10 15 205 Group Revenue 15,426 16,629 29,016 Operating (loss)/profit Mining (618) 4,080 3,873 Property 268 262 688 Other 13 115 331 (337) 4,457 4,892 Share of profit in joint ventures - 10 101 Interest receivable 84 137 226 Interest payable (139) (103) (216)
(Loss)/Profit before taxation (392)
4,501 5,003
Total assets in the period have increased by £4.8m due to high levels ofcurrent assets.2. Taxation 30 June 30 June 31 December 2010 2009 2009 Based on the results for the year: Corporation tax at 28% (2009: 28%) 21 1,430 1,203 Deferred taxation (251) (238) 127 (230) 1,192 1,330 3. Earnings per shareBoth the basic and diluted earnings per share calculations are based on a lossof £162,000 (2009: £3,309,000 profit). The basic earnings per share has beencalculated on 10,451,506 (2009: 10,451,506) ordinary shares being in issueduring the year. The diluted earnings per share has been calculated on thenumber of shares in issue of 10,451,506 (2009: 10,451,506) plus the dilutivepotential ordinary shares arising from share options of 270,611 (2009:236,986) totaling 10,722,117 (2009: 10,688,492).
4. Properties
Properties are included at valuation as at 31 December 2009 plus additions in the period ended 30 June 2010.
5. Related parties
The related parties and the nature of costs recharged are as disclosed in thegroup's annual financial statements for the year ended 31 December 2009. Thegroup paid management fees of £150,000 (30 June 2009: £148,000, 31 December2009: £300,000) to London & Associated Properties PLC, an associated company.
6. Financial information
The above financial information does not constitute statutory accounts withinthe meaning of section 434 of the Companies Act 2006. The figures for the yearended 31 December 2009 are based upon the latest statutory accounts, whichhave been delivered to the Registrar of Companies; the report of the auditorson those accounts was unqualified and did not contain a statement underSection 498(2) or (3) of the Companies Act 2006. As required by the Disclosure and Transparency Rules of theUK's Financial Services Authority, the interim financial statements have beenprepared in accordance with the International Financial Reporting Standards(IFRS) and in accordance with both IAS 34 'Interim Financial Reporting' asadopted by the European Union and the disclosure requirements of the ListingRules.
The half year results have not been audited or subject to review by the company's auditors.
The annual financial statements of Bisichi Mining PLC are prepared in accordance with IFRS as adopted by European Union. The same accounting policies are used for the six months ended 30 June 2010 as were used for the year ended 31 December 2009.
The assessment of new standards, amendments and interpretations issued but not effective, are not anticipated to have a material impact on the financial statements.
The largest area of estimation and uncertainty in the interim financialstatements is in respect of the valuation of investment properties (which arenot revalued at the half year end). Other areas of estimation and uncertainlyare referred to in the group's annual financial statements.There is no material seasonal impact on the group's financial performance.
Taxes on income in the interim periods are accrued using tax rates expected to be applicable to total annual earnings.
The interim financial statements have been prepared on the going concern basisas the Directors are satisfied the group has adequate resources to continue inoperational existence for the foreseeable future.
7. Dividend
The interim dividend in respect of 2009, totaling £105,000 was paid on 5 February 2010.
The final dividend in respect of 2009, totaling £313,000 was approved by the shareholders at the Annual General Meeting held on 8 June 2010 and was paid on 9 august 2010. The final dividend in respect of 2009 is included as a liability in these interim financial statements.
A proposed interim dividend for the year ended 31 December 2010 totaling £105,000 was approved by the Board of Directors on 26 August 2010 and has not been included as a liability in these Interim Financial Statements.
8. Principle risks and uncertainties
The Group has an established risk management process which works within thecorporate governance framework as set out in the 2009 Annual Report andAccounts. Risks and uncertainties identified by the Group are set out on page14 of the 2009 Annual Report & Accounts and are reviewed on an ongoing basis.There have been no significant changes in the first half of 2010 to theprinciple risks and uncertainties as set out in the 2009 Annual Report &Accounts.
The principal risks as stated in the accounts reflect the challenging environment in which the business operates and are considered under the following broad headings:
Mining:- Coal price- Coal washing process- Health & safety- Coal qualities- Currency movements
- Regulatory requirements & permissions
- Transport- Power supply- Flooding- Environment- LabourProperty:- Property valuation- Occupancy9. Board approval
These interim results were approved by the Board of Bisichi Mining on 26 August 2010.
DIRECTORS RESPONSIBILITY STATEMENT AND REPORT ON PRINCIPLE RISKS AND UNCERTAINTIES
Responsibility statement
We confirm to the best of our knowledge
(a) the condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
(b) the interim management report includes a fair review of the information required by:
(1) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indicationof important events that have occurred during the first six months of thefinancial year and their impact on the condensed set of financial statements;and a description of the principal risks and uncertainties for the remainingsix months of the year; and(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being related partytransactions that have taken place in the first six months of the currentfinancial year and that have materially affected the financial position orperformance of the entity during the period; and any changes in the relatedparty transactions described in the last described in the last annual reportthat could do so.Michael Heller Andrew HellerChairman Managing Director26 August 2010DIRECTORS AND ADVISERS
Directors Michael A Heller MA, FCA (Chairman)
Andrew R Heller MA, ACA (Managing Director)
Robert Grobler (Mining Director)
Garrett Casey CA (SA) (Finance Director)
C A Joll MA (Non-executive)
John A Sibbald BL (Non-executive)
Secretary Michael C Stevens FCA
Registered office 30-35 Pall Mall
London SW1Y 5LP
Black Wattle Colliery -
Directors Robert Corry (Chairman)
Andrew Heller (Managing Director)
Garrett Casey (Finance Director)
Robert Grobler (Mining Director)
David Nkosi
Ethan Dube
General mine manager Luis Pinel
Registrars and transfer office Capita Registrars
Northern House
Woodsome Park, Fenay Bridge
Huddersfield, West Yorkshire
HD8 0LA
Telephone 0871 664 0300
(Calls cost 10p per minute + network extras)
or +44 208 639 3399 for overseas callers
Website: www.capitaregistrars.com
E-mail: ssd@capitaregistrars.com
Company registration number 112155 (Incorporatedin England and Wales)
Web site www.bisichi.co.uk
E-mail companysecretary@bisichi.co.uk
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