Half-yearly Report
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 prospects
of the business an interim dividend of 1p per share will be paid on the 4
February 2011, to shareholders on the register at the close of business on 7
January 2011
Commenting on the results, Michael Heller, Chairman of Bisichi
Mining said:
"At the beginning of August 2010 Black Wattle achieved the first domestic
price increase since 2008 which, we hope, is the beginning of an upswing in
prices for our domestic product. The physical demand for Black Wattle product
from 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 of
2010 averaged 130,000 metric tonnes. I am pleased to report that these new
opencast areas are now fully operational allowing Black Wattle the opportunity
to increase production through the washing plant to an average monthly
production of 160,000 metric tonnes. However, Black Wattle is largely
dependent on the ability of Transnet; the sole rail freight provider for coal
in 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 increased
significantly resulting in an increase in our stockpile levels and this has
imposed a strain on our ability to maintain production through the washing
plant. Although we have been informed by Transnet that services will improve,
production and profitability will continue to be affected until such time as
our 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 of
August Black Wattle achieved the first domestic price increase since 2008
which, we hope, is the beginning of an upswing in prices for our domestic
product. The physical demand for Black Wattle product from our end customers
remains 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 be
paying an interim dividend of 1p per share. This is an indication of the
Board's confidence in the current and future prospects of your business. The
dividend will be paid on the 4 February 2011, to shareholders on the register
at the close of business on 7 January 2011.
On behalf of all shareholders I would like to thank all of our staff for their
contribution to the long term success of the company. Your Board continues to
regard the future with confidence.
Michael Heller Andrew Heller
Chairman Managing Director
26 August 2010
Bisichi Mining PLC
Consolidated income statement
for 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 4,400
Increase in value of investment properties - - 67
Gains on held for trading investments 9 109 425
Operating (loss)/profit (337) 4,457 4,892
Share of profit in joint ventures - 10 101
(Loss)/Profit before interest and taxation 1 (337) 4,467 4,993
Interest receivable 84 137 226
Interest payable (139) (103) (216)
(Loss)/Profit before taxation (392) 4,501 5,003
Income 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 p
Earnings per share - diluted 3 (1.55) p 30.96 p 34.35 p
Bisichi Mining PLC
Consolidated statement of comprehensive income
for 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 3,673
Other comprehensive income:
Exchange differences on translation of foreign operations 253 263 530
Other comprehensive income for the period net of tax 253 263 530
Total comprehensive income for the period 91 3,572 4,203
Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2010
30 June 30 June 31 December
2010 2009 2009
£000 £000 £000
Assets
Non-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 23,923
Current 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 10,337
Total assets 39,325 34,712 34,260
Liabilities
Current 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 PLC
Consolidated Cash Flow Statement
for the six months ended 30 June 2010
30 June 30 June 31 December
2010 2009 2009
£000 £000 £000
Cash flows from operating activities
Operating (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 7,974
Cash 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) 30 102
Cash and cash equivalents at end of period 2,874 3,764 5,077
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 5,565 6,129 6,609
Bank 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 15,646
Profit for the period - - - 3,309 3,309
Other comprehensive income and - 263 - - 263
expense
Total recognised income and expense - 263 - 3,309 3,572
for the year
Equity share options - - 118 - 118
Balance 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 15,646
Revaluation of investment - - - 67 67
properties
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 4,203
for the year
Dividend - - - (366) (366)
Equity share options - - (183) - (183)
Balance at 31 December 2009 1,045 (685) 480 18,460 19,300
Loss for the period - - - (162) (162)
Other comprehensive income and - 253 - - 253
expense
Total recognised income and expense - 253 - (162) 91
for the period
Dividend - - - (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 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 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 of
current 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 share
Both the basic and diluted earnings per share calculations are based on a loss
of £162,000 (2009: £3,309,000 profit). The basic earnings per share has been
calculated on 10,451,506 (2009: 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 (2009: 10,451,506) plus the dilutive
potential 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 the
group's annual financial statements for the year ended 31 December 2009. The
group paid management fees of £150,000 (30 June 2009: £148,000, 31 December
2009: £300,000) to London & Associated Properties PLC, an associated company.
6. Financial information
The above financial information does not constitute statutory accounts within
the meaning of section 434 of the Companies Act 2006. The figures for the year
ended 31 December 2009 are based upon the latest statutory accounts, which
have been delivered to the Registrar of Companies; the report of the auditors
on those accounts was unqualified and did not contain a statement under
Section 498(2) or (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 European Union and the disclosure requirements of the Listing
Rules.
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 financial
statements is in respect of the valuation of investment properties (which are
not revalued at the half year end). Other areas of estimation and uncertainly
are 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 basis
as the Directors are satisfied the group has adequate resources to continue in
operational 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 the
corporate governance framework as set out in the 2009 Annual Report and
Accounts. Risks and uncertainties identified by the Group are set out on page
14 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 the
principle 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
- Labour
Property:
- Property valuation
- Occupancy
9. 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 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
26 August 2010
DIRECTORS 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 (Incorporated
in England and Wales)
Web site www.bisichi.co.uk
E-mail companysecretary@bisichi.co.uk
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