Final Results
6 March 2003
BISICHI MINING PLC
Financial Results for the Year Ended 31 December 2002
RECORD TURNOVER, PROFITS, EARNINGS AND DIVIDEND
2002 2001
Turnover up 31% £5,310,000 £4,406,000
Earnings before tax, depreciation and
amortisation up 136% £1,225,000 £519,000
Profit before tax up 185% £628,000 £220,000
Earnings per share up 195% 4.43 p 1.50 p
Dividend up 50% 1.50 p 1.00 p
* Major progress and significant achievements at Black Wattle Colliery, South
Africa
*
+ production increased to just under 1 million tonnes per annum
+ additional reserves secured
+ export rail head completed
* Direct mining performance permits £2.65 million acquisition of UK retail
property , which increases the UK retail investment property portfolio to £
11.36 million at year end independent valuation
* Shareholders funds rise 18.0% to £8.2 million
Michael Heller, chairman of Bisichi Mining said:
'2003 should be a year with as much realisable potential as 2002 both in direct
mining and in retail property. In an uncertain world, I look at the coming year
for Bisichi Mining with considerable confidence.'
END
For further information, please call:
Andrew Heller/
Robert Corry, Bisichi Mining PLC 020 7415 5000
CHAIRMAN'S REVIEW
2002 has been a successful year for your company as it has seen major progress
and significant achievements in the development of our direct mining business,
and a further strengthening of our UK property business which underpins it.
These achievements are readily identifiable from our financial performance.
Shareholders will be pleased to learn that Bisichi Mining plc more than doubled
earnings before tax, depreciation and amortisation to £1,225,000 by comparison
with the previous year (2001: £519,000) and earnings per Ordinary share have
increased to 4.43p from 1.50p. In the light of this very substantial
improvement, and because your Board is confident that these improvements should
be sustainable, we are recommending a dividend per share increase of 50% from
1p to 1.5p.
Much of Bisichi Mining's improvement is a result of developments at Black
Wattle Colliery, the company's direct mining operation in South Africa. As
shareholders will see in the Mining Report, not only has Black Wattle achieved
a major increase in profitable production, to just under 1 million tonnes per
annum, but it has also secured significant additional reserves and built a
modern rail head that gives the mine an export capability through the Richards
Bay Coal Terminal. Your Board recognises that this success is in no small part
due to the excellence of our mine management team and the strength of the Black
Wattle Board of Directors. We believe that the prospects for Black Wattle are
very good and our commitment to the ongoing development of the mine is as
strong as ever
Bisichi Mining has a wholly owned subsidiary, Mineral Products Ltd., which
continues to own and manage a portfolio of equity investments with a weighting
in mineral and natural resources stocks. This portfolio provides Bisichi with
an easily accessible cash reserve.
As a result of the strong performance of our direct mining activities, in
October 2002 we acquired a £2.65 million retail property investment in
Northampton. This latest addition to our property portfolio comprises a centre
of some 17 shops and brings the rental income of Bisichi Mining to over £1
million per annum. Our property portfolio of fully let shopping centres was
valued at 31 December 2002 by independent chartered surveyors at £11.36
million, an increase of 6.1% on a like for like basis over the previous year.
Bisichi Mining also jointly owns Dragon Retail Properties with London &
Associated Properties plc, who manage our property portfolio. Dragon Retail
Properties has increased its net assets by 27% to £2.2 million following a
series of profitable sales and strong lettings at some of its core holdings.
Shareholders' funds now stand at £8.2 million compared to £6.9 million a year
ago, an increase of 18.0%.
On behalf of all shareholders, I would like to thank the staff of Bisichi
Mining and its subsidiaries for their contribution and continued commitment to
your company.
2003 should be a year with as much realisable potential as 2002 both in direct
mining and in retail property. In an uncertain world, I look at the coming year
for Bisichi Mining with considerable confidence.
MICHAEL HELLER
Chairman
6 March 2003
MINING REVIEW
BLACK WATTLE COLLIERY
2002 saw profits increase substantially over 2001. However, we expect that the
real benefits of what has been achieved should materialise in the years to
come. The areas where improvements have been made are:
* Production
* Washing
* Railing
* Ore Reserves
1. PRODUCTION
There has been a planned, concerted and successful initiative to increase
production. The number of production machines has been increased and downtime
has been reduced. Improved blasting efficiencies have resulted in the tons per
face blasted increasing from 40 to 50 tons. The result of all these
initiatives is that production from the three sections has been increased from
an average of 65,000 tons to 75,000 tons per month. The intention is to acquire
back-up cutting and loading machines in order to further increase the tonnage.
2. WASHING
The washing plant is in the process of being upgraded to include a Heavy Medium
Cyclone and Spiral section. This will allow for the upgrading of the -8mm
fraction which is currently being sold as a raw product, as well as increasing
the plant production capacity from 75,000 to 120,000 tons per month. Upgrading
the fine coal fraction also gives greater flexibility, allowing for this
product to be sold on the domestic or export market.
The extensions to the plant are scheduled to be completed by the end of April
2003.
3. RAILING
We are pleased to report that the development and expansion of the rail link at
Uitkyk siding has been completed. The siding is now Coalink approved, which
allows for the loading and railing of coal trains to the Richards Bay Coal
Terminal ('RBCT'). Very few independent mines are able to do this and, as it is
increasingly likely that the Coal Terminal will be made available to non RBCT
shareholders, this could open up new and exciting opportunities for us.
4. ORE RESERVES
As explained at the time of our last Interim Results announcement, we have
acquired additional coal reserves adjacent to our existing reserves. These new
reserves cover 785 hectares.
Over 100 boreholes have been drilled and we estimate that, at current
production levels, the life of the mine will be increased by at least 15 years.
We also estimate that the majority of these reserves can be mined to supply our
existing markets, the remainder going to power stations.
PROSPECTS
The thermal coal market has softened over the last few months. However, demand
for our product remains strong (especially our low phosphorous product) and the
improved efficiencies referred to above mean that the current lower coal price
should not have a significant effect on our earnings in 2003.
The mine's shareholding structure, with a major share being held by a Black
Economic Empowerment company, has opened up new and very exciting business
opportunities for us. Without it, we would probably not have been able to
acquire the last three reserve blocks.
A further development that we are very pleased to welcome is the addition of Ms
Duku Mogoai onto the Board of Black Wattle Colliery. She has been familiar
with Black Wattle for a number of years as a Director of Endulwini Resources
(Pty) Ltd, the Black Economic Empowerment mining company of which Mr Sipho Dube
is Chief Executive. He is a director of Black Wattle Colliery.
Finally, the success that we have achieved is a direct result of the strong
working relationships that we have developed in South Africa with the South
African Government, our colleagues in the coal industry, the support of Mr
Sipho Dube and the commitment of Mr Robert Grobler, our General Mine Manager,
and his staff. Against this background, we look forward to 2003 with
confidence.
ANDREW HELLER
Managing Director
6 March 2003
Bisichi Mining PLC
Preliminary Consolidated Profits Statement
Year Ended 31 December 2002
2002 2001
Restated
Note £000 £000
Turnover 5,310 4,060
Operating costs (4,525) (3,711)
Operating profit 785 349
Income from interests in joint venture 69 70
Exceptional items in respect 1 - 4
of fixed assets
Interest receivable 6 5
Interest payable (232) (208)
Profit on ordinary activities 628 220
before taxation
Taxation on profit on ordinary 2 (206) (82)
activities
Profit after taxation 422 138
Minority interest 41 19
Profit for the financial year 463 157
Dividends (157) (105)
Retained profit for the financial year 306 52
Earnings per share(basic and diluted) 3 4.43p 1.50p
Dividend per share 4 1.50p 1.00p
Turnover and operating profit for the year derive from continuing operations,
which are made up as follows:
Turnover Operating profit
2002 2001 2002 2001
£000 £000 £000 £000
Mining 4,423 3,298 504 129
Goodwill amortised - - (84) (85)
4,423 3,298 420 44
Property 842 733 349 296
Share dealing 36 22 9 5
Other investments 9 7 7 4
Group 5,310 4,060 785 349
Bisichi Mining PLC
Consolidated Balance Sheet
at 31 December 2002
2002 2001
Restated
£000 £000
Fixed assets
Intangible assets 132 216
Tangible assets 13,307 8,632
Investment in joint venture 1,109 873
Other investments 299 236
14,847 9,957
Current assets
Stocks 46 13
Debtors 1,039 719
Investments at cost - (market value
£531,000(2001: £624,000)) 490 474
Bank balances 80 64
1,655 1,270
Creditors - amounts falling due
within one year (3,200) (2,405)
Net current liabilities (1,545) (1,135)
Total assets less current liabilities 13,302 8,822
Creditors - amounts falling due after
one year (5,174) (1,904)
Deferred taxation (70) (43)
Minority interest 138 68
8,196 6,943
Capital and reserves
Share capital 1,045 1,045
Revaluation reserve 5,967 5,403
Other reserves 86 86
Retained earnings 1,098 409
Shareholders' funds 8,196 6,943
Statement of total recognised gains and
losses:
The company 466 130
Subsidiaries and associated undertaking (3) 27
Profit for the year 463 157
Revaluation of investment properties
- company 492 268
- joint venture 228 101
Exchange adjustments 227 (288)
Total net gains relating to the year 1,410 238
Prior year adjustment for adoption of FRS 19 64
Total net gains recognised since last annual 1,474
report
Bisichi Mining PLC
Consolidated Cash Flow Statement
Year ended 31 December 2002
2002 2001
£000 £000
Net cash inflow from operating activities 1,628 736
Dividend from joint venture 40 40
Returns on investments and servicing of finance
Interest received 6 5
Interest paid (232) (201)
(226) (196)
Taxation
Corporation tax paid (80) (76)
Capital expenditure and financial investment
Payments to acquire fixed assets (4,607) (274)
Payments to acquire current asset investments (29) (52)
Receipts from sale of fixed assets - 11
Receipts from sale of current asset investments 21 7
(4,615) (308)
Equity dividends paid (105) (105)
Cash (outflow) inflow before financing (3,358) 91
Financing
Loans drawn (repaid) 3,460 (134)
Increase (Decrease) in cash for the year 102 (43)
Reconciliation of net cash flow to movement in net debt:
Increase (decrease) in cash in the year 102 (43)
Net cash flow from changes in debt (3,460) 134
(3,358) 91
Net debt at 1 January 2002 (2,863) (2,954)
Net debt at 31 December 2002 (6,221) (2,863)
Reconciliation of operating profit to net cash inflow from operating
activities:
Operating profit 785 349
Depreciation charges 513 214
Goodwill amortised 84 85
Profit on sale of current asset investments (8) (5)
(Increase) decrease in stock (26) 9
Increase in debtors (147) (209)
Increase in creditors 427 293
1,628 736
Analysis of net debt:
At 1 At 31
January Cash Exchange December
2002 Flow adjustment 2002
£000 £000 £000 £000
Bank balances 64 12 4 80
Overdrafts (854) 90 (5) (769)
(790) 102 (1) (689)
Debt due within one year (169) (186) (3) (358)
Debt due in after one year (1,904) (3,274) 4 (5,174)
(2,863) (3,358) - (6,221)
NOTES 2002 2001
Restated
£000 £000
1. Exceptional items
Arising in respect of fixed assets
- profit from disposals - 4
2. Taxation
Based on results for the year:
Corporation tax at 30% (2001: 30%) 181 53
Adjustments in respect of prior years
- UK - (3)
- Overseas - 10
Joint venture 22 16
203 76
Deferred taxation 3 6
206 82
3. Earnings per share
Both the basic and diluted earnings per share calculations are based on a
profit of £463,000 (2001: £157,000 as restated).
The basic earnings per share has been calculated on 10,451,506 (2001:
10,451,506) ordinary shares being in issue during the year.
The diluted earnings per share has been calculated on the number of shares in
issue of 10,451,506 (2001: 10,451,506) plus the dilutive potential ordinary
shares arising from share options of 571 (2001: Nil) totalling 10,452,077
(2001: 10,451,506).
4. Dividend
The proposed final dividend of 1.50p will be paid on 18 August 2003 to
shareholders registered at the close of business on 25 July 2003.
5. The figures for the year ended 31 December 2001 are based on the audited
accounts for that year, which have been delivered to the Registrar of Companies
and on which the Auditors gave an unqualified report. The statutory accounts
for the year ended 31 December 2002, which have been prepared using the same
accounting policies as in 2001, except for the adoption of FRS 19, have been
completed and an unqualified audit opinion will be issued. The figures in the
preliminary announcement are an extract and do not constitute statutory
accounts within the meaning of the Companies Act 1985. This preliminary
statement was approved by the board on 6 March 2003.
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