Half-yearly Report
For Immediate Release
28 August 2008
BISICHI MINING PLC
Half Year Results to 30 June 2008
OPEN CAST MINING DRIVES PRODUCTION SURGE AT BLACK WATTLE
2008 2007
Profit before interest, taxation and £1,628,000 £2,092,000
depreciation
Profit before taxation £803,000 £1,510,000
Diluted earnings per share 5.39 p 10.25 p
* Opencast mining commences at Black Wattle Colliery
* Excellent prices achieved for international steam coal and metallurgical
coal products
* Second half starts with major uplift in profitability
* Full and final settlement of all claims with former BEE Partner in respect
of Black Wattle and Pegasus
Commenting on the results, Michael Heller, Chairman of Bisichi Mining said:
"The commencement of commercial opencast operations at Black Wattle will have a
significant impact on the mine's performance, as evidenced by the results for
July when more profit was made in the month than in the entire first six months
of the year. This, combined with the very high prices being achieved for our
products, gives me very considerable confidence for the future."
END
For further information, please call:
Andrew Heller/Robert Corry/Tom Kearney, Bisichi Mining PLC 020 7415 5030
Christopher Joll, MJ2 Ltd 07721 330730
John Harrison/ James Black, Numis Securities 020 7260 1000
Half year review
I am pleased to report that in the six months ended 30 June 2008, Bisichi
Mining made a profit of£1,628,000 (2007: £2,092,000) on ordinary activities
before interest, taxation, depreciation and amortisation. The 22% decrease in
profit compared to the same period in 2007 reflects lower production in the
first 3 months of 2008 due to localised flooding and scheduled maintenance on
the Voest Alpine Continuous Miner.
The first six months of 2008 has been a `story of two halves'. During the first
three months production was inhibited by unusually high levels of rainfall,
which caused localised flooding in the underground workings, and by the
scheduled maintenance of the Voest Alpine Continuous Miner. Fortunately, Black
Wattle's operations were only marginally affected by the widely reported power
cuts which took place in January and these did not affect the monthly
production, exports or sales.
During the second three months, our management at the mine dealt successfully
with the underground flooding and the Continuous Miner went back into full
operation. As a result, the mine is now at full production and the second half
of the year, with the open cast coming into operation in June, should be
substantially more profitable than the first half. In fact, I am pleased to be
able to report to shareholders that Black Wattle made more profit in the month
of July than in the entire first six months of the year.
The commencement of commercial opencast operations at Black Wattle will have a
significant impact on the mine's performance because it will lower the average
cost of production, increase average washing plant yields and will allow Black
Wattle to mine its reserves more flexibly. In addition, the area being mined
contains high yielding export quality thermal coal that will be mined over a 24
month period. A secondary adit was created to link the open cast mining with
the existing underground conveyor belt network. This has eliminated the need to
transport the coal from our opencast site by road and thus further reduced our
production costs. It also gives us the added benefits of reduced dust, noise,
and other forms of environmental pollution. Once this open cast block has been
mined out we will move on to other opencast blocks. We envisage Black Wattle
maintaining an opencast section for the remainder of its life.
The two remaining underground sections - both the traditional drill-and-blast
and the mechanised section where our Continuous Miner is operating - are
producing well and, combined with the opencast, we anticipate producing 130,000
metric tonnes per month on a consistent basis. We are investigating the
possibility of expanding our washing plant capacity to accommodate increased
production from the various sections.
During the period, the market for domestic and internationally-traded coal has
been very strong, with prices reaching their highest levels in recent history.
In April, we announced a 46 percent increase in the price for our domestic
thermal coal and a 42 percent increase in the price for our metallurgical
product. We are pleased to report that in July, we negotiated a further 68
percent increase in the price for our metallurgical coal. The price for export
coal is also very high and we are taking advantage of the buoyancy in the
market by locking in prices when it suits us to do so. The sale of our discard
product to the local power industry continues to add a substantial amount of
nil cost revenue whilst simultaneously reducing our overall rehabilitation
liability
In April, we announced the full and final settlement of all disputes with
Bisichi's former Black Economic Empowerment (BEE) partner. We are in the
process of selecting a new BEE partner for Black Wattle and hope to make an
announcement in the near future. Regarding the Pegasus reserve, there is
currently nothing further to report to shareholders, except to state that the
settlement of the dispute with Endulwini Resources (pty) Ltd, which had 51% of
the equity in the contract, has cleared a major impediment to the successful
conclusion of this transaction with the vendors.
In order to bolster the management of our operations in South Africa and to
take advantage of sharp increase in the availability of mineral rights, we have
promoted Robert Grobler to Mining Director of Bisichi Mining plc and appointed
Luis Pinel to replace him as General Manager at Black Wattle.
Despite the downturn in UK property prices, our UK property portfolio, which is
managed by London & Associated Properties PLC, is virtually fully let and there
has been no reduction in the income we receive from rentals.
During the second half of the year management will continue to focus on
increasing the levels of profitability at our operations at Black Wattle whilst
at the same time continuing to identify opportunities for expansion in South
Africa. With commercial production of our opencast operations now under way and
coal prices at such high levels, I look to the future with confidence.
Michael Heller Andrew Heller
Chairman Managing Director
27 August 2008
Bisichi Mining PLC
Consolidated income statement
for the six months ended 30 June 2008
6 months 6 months Year ended
ended 30 ended 30 31
June June December
2008 2007 2007
Notes £000 £000 £000
Group revenue 1 9,076 5,009 16,693
Operating costs (8,097) (3,506) (14,710)
Operating profit before 1 979 1,503 1,983
adjustments
Decrease in value of investment properties - - (2,588)
(Loss)/gains on held for trading (108) 36 31
investments
Exceptional items - - 383
Share of profit in joint ventures (25) (6) (204)
Operating profit 1 846 1,533 (395)
Interest receivable 170 169 394
Interest payable (213) (192) (458)
Profit before taxation 803 1,510 (459)
Income tax expense 2 (204) (394) 551
Profit for the period 599 1,116 92
Attributable to:
Equity shareholders 599 1,116 92
Minority interest - - -
Profit for the year 599 1,116 92
Earnings per share - basic 3 5.73 p 10.68 p 0.88 p
Earnings per share - diluted 3 5.39 p 10.25 p 0.85 p
Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2008
30 June 30 June 31
December
2008 2007 2007
Restated
Assets £000 £000 £000
Non-current-assets
Value of investment properties 14,838 17,278 14,725
attributable to the group
Fair value of head leases 267 153 267
Property 15,105 17,431 14,992
Reserves, plant and equipment 5,720 5,185 5,859
Investments in joint ventures 3,214 2,786 2,520
Other investments 392 302 471
Total non-current assets 24,431 25,704 23,842
Current assets
Inventories 31 78 126
Trade and other receivables 2,992 2,832 2,130
Corporation Tax Recoverable 189 51 174
Held for trading investments 685 736 770
Interest derivative - 39 16
Cash and cash equivalents 2,263 3,804 3,199
Total current assets 6,160 7,540 6,415
Total assets 30,591 33,244 30,257
Liabilities
Current liabilities
Borrowings (3,414) (3,333) (2,402)
Trade and other payables (4,305) (5,605) (5,606)
Current tax liabilities (81) (256) (454)
Total current liabilities (7,800) (9,194) (8,462)
Non-current liabilities
Borrowings (3,980) (3,480) (3,139)
Finance lease liabilities (267) (153) (267)
Deferred tax liabilities (2,991) (4,074) (3,030)
Total non-current liabilities (7,238) (7,707) (6,436)
Total liabilities (15,038) (16,901) (14,898)
Net assets 15,553 16,343 15,359
Equity
Share capital 1,045 1,045 1,045
Translation reserve (1,785) (1,340) (1,276)
Other reserves 544 189 426
Retained earnings 15,763 16,449 15,164
Total equity attributable to equity shareholders 15,567 16,343 15,359
Minority interest (14) - -
Total equity 15,553 16,343 15,359
Bisichi Mining PLC
Consolidated Cash Flow Statement
for the six months ended 30 June 2008
30 June 30 June 31
December
2008 2007 2007
£000 £000 £000
Cash flows from operating activities
Operating profit 846 1,533 (395)
Depreciation 782 559 1,196
Unrealised gain on investments held for 108 (36) (31)
trading
Unrealised gain on investment properties - - 2,588
Share of profit from joint ventures 25 (6) 204
Share based payment expense 118 - 237
Decrease (increase) in net current assets 154 (960) (649)
Net interest paid (43) (23) (64)
Income tax paid (773) (6) (43)
Cash flow from operating activities 1,217 1,061 3,043
Cash flows from investing activities (1,874) (540) (1,695)
Cash flows from financing activities (813) (594) (1,088)
Net (decrease) increase in cash and cash (1,470) (73) 260
equivalents
Cash and cash equivalents at 1 January 1,244 978 978
Exchange adjustment (39) - 6
Cash and cash equivalents at end of period (265) 905 1,244
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 2,263 3,804 3,199
Bank overdraft (2,528) (2,899) (1,955)
Cash and cash equivalents at end of period (265) 905 1,244
Bisichi Mining PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
for the six months ended 30 June 2008
Share Translation Other Retained Minority Total
capital reserve reserves earnings Total interest Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 1 January 1,045 (1,237) 189 15,333 15,330 - 15,330
2007
Movement on fair value - - - (14) (14) - (14)
of derivatives
Other income statement - - - 1,130 1,130 - 1,130
movements
Profit for the period - - - 1,116 1,116 - 1,116
Exchange adjustments - (103) - - (103) - (103)
Total recognised income - (103) - 1,116 1,013 - 1,013
and expense for the year
Balance at 30 June 2007 1,045 (1,340) 189 16,449 16,343 - 16,343
Balance as at 1 January 1,045 (1,237) 189 15,333 15,330 - 15,330
2007
Revaluation of - - - (2,588) (2,588) - (2,588)
investment properties
Movement on fair value - - - 16 16 - 16
of derivatives
Other income statement - - - 2,664 2,664 - 2,664
movements
Profit for the year - - - 92 92 - 92
Exchange adjustments - (39) - - (39) - (39)
Total recognised income - (39) - 92 53 - 53
and expense for the year
Dividend - - - (261) (261) - (261)
Equity share options - - 237 - 237 - 237
Balance at 31 December 1,045 (1,276) 426 15,164 15,359 - 15,359
2007
Movement on fair value - - - (16) (16) - (16)
of derivatives
Other income statement - - - 615 615 - 615
movements
Profit for the year - - - 599 599 - 599
Exchange adjustments - (509) - - (509) - (509)
Total recognised income - (509) - 599 90 - 90
and expense for the year
Equity share options - - 118 - 118 - 118
Purchase of additional - - - - - (14) (14)
shares in subsidiary
Balance at 30 June 2008 1,045 (1,785) 544 15,763 15,567 (14) 15,553
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2008 have been prepared in
accordance with International
Financial Reporting Standards (IFRS). The principal accounting policies applied
are the same as those set out in the Financial Statements for the year ended
31 December 2007.
1. Segmental analysis
30 June 30 June 31
December
2008 2007 2007
Restated
Revenue
Mining 8,539 4,479 15,594
Property 514 505 1,019
Other 23 25 80
9,076 5,009 16,693
Segment result
Mining 888 1,215 1,702
Property 97 268 269
Other (6) 20 12
979 1,503 1,983
Operating profit
Mining 875 1,215 1,600
Property 97 268 (2,038)
Other (126) 50 43
846 1,533 (395)
2. Taxation
30 June 30 June 31 December
2008 2007 2007
Restated
Based on the results for the year:
Corporation tax at 28% (2007: 30%) 103 437 326
Prior year adjustment - UK - - 4
103 437 330
Deferred taxation 101 (43) (881)
204 394 (551)
The prior year restatement of the balance sheet for the six months ending 30th
June 2007 is a result of an increased deferred tax charge in the 2006 financial
year, which relates to the recognition of the liability on the difference
between the book value of the plant and equipment and the written down tax
value on which capital allowances have been claimed.
As a result of the profitability of the mine the directors have determined that
the previous basis of calculation was not appropriate and required correction.
This full provision will equalise the tax charge in future years.
3. Earnings per share
Both the basic and diluted earnings per share calculations are based on a
profit of £599,000 (2007: £1,116,000). The basic earnings per share has been
calculated on 10,451,506 (2007: 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 (2007: 10,451,506) plus the dilutive
potential ordinary shares arising from share options of 660,798 (2007: 432,175)
totaling 11,112,304 (2007: 10,883,681).
4. Properties
Properties are included at valuation as at 31 December 2007 plus additions in
the period ended 30 June 2008.
5. Legal dispute
In April the company announced the settlement of all disputes with its former
Black Economic Empowerment partner in South Africa.
6. Financial information
The above financial information does not constitute statutory accounts within
the meaning of section 240 of the Companies Act 1985. Statutory accounts for
the year ended 31 December 2007 which were prepared under International
Financial Reporting Standards, have been delivered to the Registrars of
Companies; the report of the auditors on those accounts was unqualified and did
not contain a statement under section 498(2) and (3) of the Companies Act 2006.
As required by the Disclosure and Transparency Rules of the UK's Financial
Services Authority, the interim financial statements have been prepared in
accordance with the International Financial Reporting Standards (IFRS) and in
accordance with both IAS 34 'Interim Financial Reporting' as adopted by the EU
and the disclosure requirements of the Listing Rules. The same accounting
policies are used for the six months ended 30 June 2008 as were used for the
year ended 31 December 2007.
The interim results have not been audited or subject to review by the company's
auditors.
7. Dividend
The final dividend in respect of 2007, totaling £314,000 was paid on 11 August
2008.
8. Board approval
These interim results were approved by the Board of Bisichi Mining on 27 August
2008.
DIRECTORS 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 indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for
the remaining six months of the year; and
2. DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during the period; and any changes in the related
party transactions described in the last described in the last annual
report that could do so.
Michael Heller Andrew Heller
Chairman Managing Director
27 August 2008
DIRECTORS AND ADVISERS
Directors Michael A Heller MA, FCA (Chairman)
Andrew R Heller MA, ACA (Managing Director)
Robert Grobler (Mining Director
C A Joll MA (Non-executive)
Thomas M Kearney (Commercial
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)
Thomas Kearney
David Nkosi
General mine manager Luis Pinel
Registrars and transfer office Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0GA
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
Company registration number112155 (Incorporated in England and Wales)
Web sitewww.bisichi.co.uk
E-mailAdmin@bisichi.co.uk
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