Final Results
Bisichi Mining PLC
11 March 2002
11th March 2002
BISICHI MINING PLC
Preliminary results - 31st December 2001
2001 2000
Turnover: £4,060,000 £3,695,000
Profit before tax and goodwill
amortisation and after minorities £324,000 £218,000
Earnings per share: 1.52 p 0.61 p
Net assets per share 67.3 p 66.3 p
• Significant improvement in the performance of Black Wattle Colliery
• Bisichi Mining is now one of the major producers of low phosphorous coal
in South Africa, a commodity much in demand
• New coal reserves acquired
• New prices for the coal, effective from January 2002, offset SA Rand
devaluation
Commenting, Michael Heller, chairman of Bisichi Mining said:
'The combination of a strong performance from our South African coal mine, the
prospects for growth in that performance and the strength of the UK retail
property portfolio, despite uncertain economic and political times, allows me to
view the prospects for 2002 with considerable confidence.'
END
For further information, please call:
Andrew Heller, Bisichi Mining PLC 020 7415 5000
Chairman's Statement
I am pleased to report to shareholders that Bisichi Mining has made a profit
before tax and goodwill amortisation, but after minority interests, of £324,000
for the year to 31st December 2001 (2000: £218,000). Earnings per share have
increased from 0.61p to 1.52p an increase of 149%. This is a very substantial
improvement on the results your company achieved in 2000 and arises from the
management-driven improvement in the performance of Black Wattle Colliery, the
company's direct mining operation in South Africa.
These direct mining activities continue to be underpinned by the strong
performance of our UK retail property portfolio. Shareholders' funds now stand
at £6.88 million (2000: £6.74 million) and this increase would have been greater
had the company's balance sheet not had to absorb £0.29 million arising from the
severe devaluation of the South African Rand in the second half of the year.
Direct mining and mining investments
The company's mining activities are detailed in the Mining Report. However, in
this statement, I would like to draw shareholders' attention to a number of
strategic achievements that have been made by your company in South Africa.
Firstly, since Bisichi Mining acquired control of Black Wattle Colliery, the
management has had to contend with a series of challenges. It is considerably
to the credit of both our London and South African based teams that not only
have they dealt with these problems but that, despite them, they have achieved a
situation where, today, Black Wattle Colliery is one of the major producers in
South Africa of low phosphorous coal, a type of coal that is very much in
demand.
Secondly, when your company acquired Black Wattle Colliery it was a coal mine
with limited prospects. We believed that the decline could be reversed and
prospects improved. As a result of complex and often difficult negotiations,
Black Wattle Colliery has acquired new reserves.
Lastly, although the sharp decline in the value of the South African Rand has
impacted on the balance sheet value of our South African investment, coal is
ultimately a US Dollar valued commodity and the management team has managed to
negotiate very substantial price increases for our coal from January 2002.
These increases have offset the decline in the value of the local currency.
The operating profit from our mining division increased in the year under review
by £100,000 and we believe that this is only the beginning.
Mineral Products Limited, a wholly owned subsidiary of Bisichi Mining, continues
to manage an equity portfolio with a weighting in mineral and natural resources
stocks. This portfolio also provides us with an easily accessible cash reserve.
Property
Bisichi Mining's property portfolio of fully let shopping centres is managed for
a fee by London & Associated Properties PLC. It was valued at 31st December
2001, by independent chartered surveyors, at £8.08 million (£7.78 million) an
increase of 4% over the previous year.
Bisichi Mining also owns, jointly with London & Associated Properties, Dragon
Retail Properties. Dragon Retail's property portfolio was independently valued
at 31st December 2001 at £6.18 million (£5.25 million). During the year under
review Dragon Retail made or contracted to make property sales of £2.18 million
and purchases of £1.36 million.
Dividend
Your directors are recommending the maintenance of the final dividend of 1p per
share which is one and a half times covered by profit.
Prospects
Although we live in uncertain economic and political times, I view the prospects
for Bisichi Mining in 2002 with considerable confidence.
Finally, and on behalf of all shareholders, I would like to thank all our
employees both in the UK and South Africa for their continuing commitment to
your company.
MICHAEL HELLER
Chairman
MINING REVIEW
BLACK WATTLE COLLIERY
Bisichi Mining's direct mining in 2001 was concentrated on Black Wattle
Colliery, the Company's coal mine in South Africa. It was a year of expansion
for the mine in terms of both production and reserves as detailed below.
Production
This was the first full year of mining in which we have operated three
underground sections on a 2-shift basis. As a result of this, the monthly coal
production in 2001 increased to 65,000 tons per month from the 44,000 tons per
month average achieved in 2000. In 2002, our policy is to maintain and even
increase those levels of production and so reduce the mining cost per ton. To
help in achieving this objective, all future rebuilds of our mining equipment
will be undertaken by a contractor working offsite, allowing our engineering
department to concentrate on maintenance and minor repairs underground. At the
same time, we are in the process of acquiring additional underground machinery
to support further the operating machines in the 3 existing sections.
Marketing & Pricing
The demand for Black Wattle's coal has remained strong throughout the year and,
as we continue to expand, we already have purchase commitments in place for our
future coal production at good prices.
The decline in the value of the South African Rand has various effects on our
business, in particular with regard to pricing. Because coal is ultimately an
international commodity priced in US Dollars, as the Rand has declined so the
price of our coal has increased. This benefits not only our mining operation but
the South African coal industry as a whole.
Ore reserves
During the year, we completed the acquisition of a reserve to the South,
following the acquisition we made last year to the West.
Prospects
The expansion of the mine detailed above is due in no small measure to the
efforts of Mr Sipho Dube, our South African director and partner, and to Mr
Robert Grobler, our General Mine Manager with his staff and employees. Against
this background we look forward to 2002 with confidence.
BOB MACKILLIGIN
ANDREW HELLER
Bisichi Mining PLC
Preliminary Consolidated Profits Statement
Year Ended 31st December 2001
2001 2000
£000 £000
Note
Turnover 4,060 3,695
Operating costs (3,711) (3,406)
Operating profit 349 289
Income from interests in joint venture 70 37
Exceptional items in respect of fixed assets 1 4 (14)
Interest receivable 5 4
Interest payable (208) (234)
Profit on ordinary activities before taxation 220 82
Taxation on profit on ordinary activities 2 (80) (69)
Profit after taxation 140 13
Minority interest 19 51
Profit for the financial year 159 64
Dividends (105) (105)
Retained profit (loss) for the financial year 54 (41)
Earnings per share 3 1.52 p 0.61p
Dividend per share 4 1.00 p 1.00p
Turnover and operating profit for the year derive from continuing operations,
which are made up as follows:
Turnover Operating profit
2001 2000 2001 2000
£000 £000 £000 £000
Mining 3,298 2,900 129 28
Goodwill amortised - - (85) (85)
3,298 2,900 44 (57)
Property 733 716 296 331
Share dealing 22 72 5 12
Other investments 7 7 4 3
Group 4,060 3,695 349 289
Bisichi Mining PLC
Consolidated Balance Sheet
at 31st December 2001
2001 2000
£000 £000
Fixed assets
Intangible assets 216 301
Tangible assets 8,632 8,714
Investments 1,109 924
9,957 9,939
Current assets
Stocks 13 31
Debtors 575 492
Investments at cost - (market value £624,000(2000: £606,000)) 474 424
Bank balances 64 88
1,126 1,035
Creditors - amounts falling due within one year (2,405) (2,249)
Net current liabilities (1,279) (1,214)
Total assets less current liabilities 8,678 8,725
Creditors - amounts falling due after one year (1,904) (2,131)
Deferred taxation (16) (12)
Minority interest 121 162
6,879 6,744
Capital and reserves
Share capital 1,045 1,045
Revaluation reserve 5,403 5,100
Other reserves 86 86
Retained earnings 345 513
Shareholders' funds 6,879 6,744
Statement of total recognised gains and losses:
The company 132 80
Subsidiaries and associated undertaking 27 (16)
Profit for the year 159 64
Revaluation of investment properties - company 268 418
- joint venture 101 95
Exchange adjustments (288) (84)
Total gains recognised in period 240 493
Bisichi Mining PLC
Consolidated Cash Flow Statement
Year ended 31st December 2001
2001 2000
£000 £000
Net cash inflow from operating activities 736 631
Dividend from joint venture 40 -
Returns on investments and servicing of finance
Interest received 5 4
Interest paid (201) (234)
(196) (230)
Taxation
Corporation tax paid (76) (59)
Capital expenditure and financial investment
Payments to acquire fixed assets (274) (329)
Payments to acquire current asset investments (52) (48)
Receipts from sale of fixed assets 11 17
Receipts from sale of current asset investments 7 56
(308) (304)
Equity dividends paid (105) (105)
Cash inflow (outflow) before financing 91 (67)
Financing
Loans (repaid) drawn (134) 10
(Decrease) in cash for the year (43) (57)
Reconciliation of net cash flow to movement in net debt:
(Decrease) in cash in the year (43) (57)
Net cash flow from changes in debt 134 (10)
91 (67)
Net debt at 1st January 2001 (2,954) (2,887)
Net debt at 31st December 2001 (2,863) (2,954)
Reconciliation of operating profit to net cash inflow from operating activities:
Operating profit 349 289
Depreciation charges 214 246
Goodwill amortised 85 85
Provision against current asset investment - 4
Profit on sale of current asset investments (5) (16)
Decrease in stock 9 71
Increase in debtors (209) (183)
Increase in creditors 293 135
736 631
Analysis of net debt:
At 1st At 31st
January Exchange December
2001 Cash flow adjustment 2001
£000 £000 £000 £000
Bank balances 88 (10) (14) 64
Overdrafts (838) (33) 17 (854)
(750) (43) 3 (790)
Debt due within one year (73) (108) 12 (169)
Debt due in after one year (2,131) 242 (15) (1,904)
(2,954) 91 - (2,863)
NOTES
2001 2000
£000 £000
1. Exceptional items
Arising in respect of fixed assets
- profit (loss) from disposals 4 (14)
2. Taxation
Based on results for the year:
Corporation tax at 30% (2000: 30%) 53 72
Prior year adjustment - UK (3) (12)
- Overseas 10 -
Deferred taxation 4 -
64 60
Joint venture 16 9
80 69
3. Earnings per share
These have been calculated on 10,451,506 (2000: 10,451,506) Ordinary shares
being the number of shares in issue during the year and the Profit for the
financial year attributable to holders of ordinary shares of £159,000 (2000:
£64,000).
4. Dividend
The proposed final dividend of 1.00p will be paid on 19 August 2002 to
shareholders registered at the close of business on 26 July 2002.
5. The figures for the year ended 31st December 2000 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 31st December 2001, which have been prepared using
the same accounting policies as in 2000, 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 8
March 2002.
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