Bisichi Regulatory News (BISI)

27 Sep 2006 07:00

27 September 2006 BISICHI MINING PLC Interim Results to 30 June 2006 STRONG TURNAROUND IN THE FIRST HALF OF 2006 2005 2004 Profit before interest, taxation and ‚£752,000 ‚£1,631,000depreciation Profit before taxation ‚£233,000 ‚£1,060,000 Diluted earnings per share 2.56 p 7.01 p * Black Wattle Colliery returned to profitability in the Second Quarter * Continuous Miner overhauled and back in full scale operation * Washing plant now directly operated by Black Wattle Colliery * Price increases secured for low phosphorus and domestic thermal products * Performance underpinned by property investment portfolio * Cash resources continue to grow Commenting on the results, Michael Heller, chairman of Bisichi Mining said:"With the turnaround in the mine complete, and with the cash resources that wehave available, we are now focussing on the substantial opportunities thatexist for the development of our mining activities in South Africa. With thisin mind, I look forward to the future with confidence." END For further information, please call:Andrew Heller/Robert Corry, Bisichi Mining PLC 020 7415 5030Christopher Joll, MJ2 Ltd 020 7491 7776Chairman's ReviewI am pleased to report that in the six months ended 30 June 2006, BisichiMining made a profit on ordinary activities before interest, taxation, anddepreciation of ‚£752,000 (2005: ‚£1,631,000). As we explained in the 2005 AnnualReport, the 54 percent decrease in profit compared to the same period in 2005was expected and was a direct consequence of the suspension of the operation ofthe Continuous Miner at Black Wattle Colliery for the first three months of2006, combined with the mining of lower yielding sections. That the first threemonths of 2006 were loss-making but the first half was profitable is powerfulevidence of our mine management's ability to address promptly, and to overcome,serious issues on the mine.A number of important events have taken place in the first six months of 2006which have accelerated the turnaround at Black Wattle. Key among these were theoverhauling of the Continuous Miner to operate in areas of lower seam height;successfully negotiating an 11 percent price increase for our low phosphorusproduct; and securing a 15 percent increase on the price we receive for ourdomestic thermal coal.In the same period, we have also received new order mining rights for theportions of Black Wattle which we intend to mine by opencast methods, asubstantially cheaper production method than underground mining. The next stageis to apply for a mining licence from the Department of Minerals and Energy inorder to commence opencast mining in these areas.We have also taken direct operational control of the washing plant from ourcontractors. We believe that this action should see an improvement in theoverall washing plant yield and efficiencies, but given that this process takessome time, the results of this change will only impact fully in 2007.Shareholders should be aware that the mine's fixed price export contract comesto a conclusion in the second half of 2006. Since the signing of that contractin April 2004, we have received annual increases in our RBCT allocation. As aresult, we have effectively accelerated by six months what was originally athree year contract. However, given the volatility of the international coalprice and the strength of the domestic market, we now can take advantage ofopportunities in either market as they arise.On other matters, we anticipate completing the purchase of the Pegasus CoalReserve in the near future; this has been on hold pending the grant of neworder mining rights by the Department of Minerals and Energy, which have notyet come through. We now anticipate developing the project towards the end of2007. In the meantime, we are in active discussions with a number of interestedparties to acquire additional coal reserves in South Africa.Our UK property portfolio, which is managed by London & Associated PropertiesPLC, has continued to provide us with a reliable income and has proved ourbusiness strategy by underpinning our performance in the second half of 2005and the start of 2006. During the period, we completed the sale of the Ritzsite in Bradford which was the subject a Compulsory Purchase Order, and thishas released substantial cash into the company. The portfolio is virtuallyfully let.Finally, I am pleased to report that the Department of Minerals and Energy hasabsolved the management of the Black Wattle Colliery for any responsibility forthe fatal accident which occurred in the second half of 2005. The health andsafety of our workers is of utmost concern to us and the event has led minemanagement to redouble its efforts to ensure a safe working environment at allour operations.As we move into the second half of the year, management's key challenge will beto maintain the momentum in our South African mining activities built up duringthe second quarter of 2006 and to consolidate the productivity increases atBlack Wattle that have been achieved during the same period. With theturnaround in the mine complete, and with the cash resources that we haveavailable, we are now focussing on the substantial opportunities that exist forthe development of our mining activities in South Africa. With this in mind, Ilook forward to the future with confidence.Michael HellerChairman27 September 2006Bisichi Mining PlcConsolidated income statementfor the six months ended 30 June 2006 Notes 6 months 6 months Year ended ended Ended 30 June 30 June 31 Dec 2006 2005 2005 ‚£'000 ‚£'000 ‚£`000 Group Revenue 1 6,101 6,684 13,485 Operating costs (5,870) (5,616) (12,037) Operating profit before 1 231 1,068 1,448adjustments Gains on held for trading 32 12 177investments Increase in value of investment - - 2,393properties Exceptional items 7 132 124 Share of profit in joint venture 77 70 522 Operating profit 1 347 1,282 4,664 Interest receivable 87 22 76 Interest payable (201) (244) (534) Profit before taxation 233 1,060 4,206 Income tax expense 2 10 (62) (687) Profit for the period 243 998 3,519 Profit attributable to equity 276 757 3,256shareholders (Loss) profit attributable to (33) 241 263minority interest 243 998 3,519 Earnings per share 3 2.64p 7.24p 31.15p Diluted earnings per share 3 2.56p 7.01p 30.19p Bisichi Mining PlcConsolidated balance sheetAs at 30 June 2006 Notes 30 June 30 June 31 Dec 2006 2005 2005 ‚£'000 ‚£'000 ‚£'000 Assets Non-current assets Value of properties attributable 4 15,607 14,659 15,625to group Fair value of head leases 153 343 153 Property 15,760 15,002 15,778 Reserves, plant and equipment 4,430 4,528 5,604 Investments in joint ventures 2,028 1,859 2,519 Other investments 986 376 424 Deferred tax asset 313 219 241 Total non-current assets 23,517 21,984 24,566 Current assets Inventories 163 161 124 Trade and other receivables 1,965 3,379 4,578 Held for trading investments 662 574 629 Interest derivative 37 81 36 Cash and cash equivalents 3,162 259 488 Total current assets 5,989 4,454 5,855 Total assets 29,506 26,438 30,421 Liabilities Current liabilities Borrowings (2,944) (680) (2,382) Trade and other payables (3,699) (3,961) (4,432) Current tax liabilities (60) (275) (91) Total current liabilities (6,703) (4,916) (6,905) Non-current liabilities Borrowings (4,319) (5,219) (4,368) Finance lease liabilities (153) (343) (153) Deferred tax liabilities (2,523) (2,093) (2,582) Total non-current liabilities (6,995) (7,655) (7,103) Total liabilities (13,698) (12,571) (14,008) Net assets 15,808 13,867 16,413 Equity Share capital 1,045 1,045 1,045 Other reserves (574) (22) 170 Retained earnings 14,882 12,316 14,606 Total shareholders' equity 15,353 13,339 15,821 Minority interest in equity 455 528 592 Total equity 15,808 13,867 16,413 Bisichi Mining PlcConsolidated CASH FLOW STATEMENTFor the six months ended 30 June 2006 30 June 30 June 31 December 2006 2005 2005 ‚£'000 ‚£'000 ‚£'000 Cash flows from operating activities Operating profit 347 1,282 4,664 Depreciation 405 349 807 Gain on investments held for - (9) 75trading Unrealised gains on investment - - (2,393)properties Share of profit from joint (77) (70) (522)ventures Hedging (1) 11 82 Share based payment expense 12 11 23 Unrealised gain on investment held (32) 13 (177)for trading Decrease (increase) in net current 2,454 (1,551) (228)assets Net interest paid (115) (204) (458) Income tax paid (191) (47) (331) Cash flows from operating 2,802 (215) 1,542activities Cash flows from investing (636) 25 (907)activities Cash flow from financing (281) (37) (2,113)activities Net increase (decrease) in cash 1,885 (227) (1,478)and cash equivalents Cash and cash equivalents at 1 (969) 507 507January Exchange adjustment 126 (31) 2 Cash and cash equivalents at 1,042 249 (969)period end Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts: Cash and cash equivalents 3,162 259 488 Bank overdraft (2,120) (10) (1,457) Cash and cash equivalents at end 1,042 249 (969)of period Bisichi Mining PlcConsolidated STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITYFor the six months ended 30 June 2006 Share Translation Other Retained Total Minority Total reserve earnings capital reserves interest equity ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Balance at 1 January 1,045 141 91 11,559 12,836 334 13,1702005 Movement on fair value - - - 32 32 - 32of derivatives Other income statement - - - 725 725 241 966movements Profit for the period - - - 757 757 241 998 Exchange adjustments - (265) - - (265) (47) (312) Total recognised - (265) - 757 492 194 686income and expense for the period Equity share options - - 11 - 11 - 11 Balance at 30 June 1,045 (124) 102 12,316 13,339 528 13,8672005 Balance at 1 January 1,045 141 91 11,559 12,836 334 13,1702005 Revaluation of - - - 2,393 2,393 - 2,393investment property Movement on fair value - - - (58) (58) - (58)of derivatives Other income statement - - - 921 921 263 1,184movements Profit for the year - - - 3,256 3,256 263 3,519 Exchange adjustments - (85) - - (85) (5) (90) Total recognised - (85) - 3,256 3,171 258 3,429income and expense for the year Dividend - - - (209) (209) - (209) Equity share options - - 23 - 23 - 23 Balance at 31 December 1,045 56 114 14,606 15,821 592 16,4132005 Movement on fair value - - - 37 37 - 37of derivatives Other income statement - - - 239 239 (33) 206movements Profit for the period - - - 276 276 (33) 243 Exchange adjustments - (755) - - (755) (104) (859) Total recognised - (755) - 276 (479) (137) (616)income and expense for the period Equity share options - - 11 - 11 - 11 Balance at 30 June 1,045 (699) 125 14,882 15,353 455 15,8082006 Bisichi Mining PlcACOUNTING POLICIES aND NOTES TO ACCOUNTSThe results for the six months ended 30 June 2006 have been prepared inaccordance with International Financial Reporting Standards (IFRS). Theprincipal accounting policies applied are the same as those set out in theFinancial Statements for the year ended 31 December 2005. 1 SEGMENTAL ANALYSIS 30 June 30 June 31 December 2006 2005 2005 ‚£'000 ‚£'000 ‚£'000 Revenue Mining 5,556 6,025 12,278 Property 524 539 1,086 Other 21 120 121 __ _ _ 6,101 6,684 13,485 __ _ _ Operating profit before adjustments Mining 23 823 1,008 Property 198 237 436 Other 10 8 4 __ _ _ 231 1,068 1,448 __ _ _ Operating profit Mining 42 890 1,066 Property 262 395 3,417 Other 43 (3) 181 __ _ _ __ 347 1,282 4,664 __ _ _ 2 TAXATION 30 June 30 June 31 December 2006 2005 2005 ‚£'000 ‚£'000 ‚£'000 Based on the results for the year: Corporation tax at 30% (2005: 30%) 45 57 152 Adjustment in respect of prior - - (1) years -UK __ _ _ __ Current tax 45 57 151 Deferred tax (55) 5 536 __ _ _ __ Total tax in income statement (10) 62 687 __ _ _ __3 EARNING PER SHAREBoth the basic and diluted earnings per share calculations are based on aprofit of ‚£276,000 (2005: ‚£757,000). The basic earnings per share have beencalculated on 10,451,506 (2005: 10,451,506) ordinary shares being in issueduring the period. The diluted earnings per share have been calculated on thenumber of shares in issue of 10,451,506 (2005: 10,451,506) plus the dilutivepotential ordinary shares arising from share options of 340,055 (2005: 352,471)totalling 10,791,561 (2005: 10,803,977).4 PROPERTIESProperties are included at valuation as at 31 December 2005 plus additions inthe period ended 30 June 2006.5 FINANCIAL INFORMATION240 of the The above financial information does not constitute statutoryaccounts within the meaning of section Companies Act 1985. Statutory accountsfor the year ended 31 December 2005 which were prepared under InternationalFinancial Reporting Standards, have been delivered to the Registrar ofCompanies; the report of the auditors on those accounts was unqualified and didnot contain a statement under Section 237(2) or (3) of the Companies Act 1985.6 Board approvalThese interim results were approved by the Board of Bisichi Mining PLC on 27September 2006.7 POSTING TO SHAREHOLDERSThe interim report will be sent to shareholders by mail. Copies are availableat the company's registered office: 30-35 Pall Mall, London 5LH and may also bedownloaded from the company's website: www.bisichi.co.uk .ENDBISICHI MINING