Final Results
UK Coal PLC
5 March 2002
5 March 2002
UK COAL PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2001
UK COAL PLC, the UK's leading coal mining company, today announces its
preliminary audited results for the year ended 31 December 2001.
• Net cash inflow before financing and dividends of £75.9 million (2000:
£52.8 million)
• The pre-tax loss includes an exceptional write-off of £15.8 million
(£11.1 million after tax) in respect of costs incurred in the development
of the Went Edge reserves at Prince of Wales Colliery, West Yorkshire
• 10% growth in coal burn
• Company output increased to 19.6 million tonnes (2000: 19.1 million
tonnes) in the UK
• In depth Business Review (Project 105) starting main implementation
phase
• Rental income from property £3.9m (2000: £2.6m)
2001 2000
Turnover £662.5m £705.2m
(Loss)/Profit before tax and exceptionals £(10.7)m* £15.1m*
(Loss)/Profit for the period £(18.3)m* £14.8m*
(Loss)/Earnings per share, after tax and (12.5)p 10.1p
exceptionals
Dividend for the year 10.0p 10.0p
* Includes Operating Aid income £21.7 million (2001) and £53.3 million (2000),
and profit on sale of land and buildings of £1.9 million (2000: £3.6 million)
Commenting on the results, Gordon McPhie, Chief Executive of UK COAL, said:
'We are continuing to focus on reducing our unit costs, and generating cash
within the business commensurate with the continued investment into our most
economic prospects. The Project 105 cost and productivity initiative has
started well.'
For further information, please contact:
UK COAL PLC Today 020 7457 2345
Gordon McPhie, Chief Executive Thereafter 01302 751751
Gavin Anderson & Company
Liz Morley 020 7457 2345
Fiona Grant Duff
PRELIMINARY RESULTS STATEMENT
Introduction
The Board's policy is to match production to sales, maintain investment in
ongoing operations and to distribute available cash to shareholders.
The Group's aim is to create lower cost highly productive deep mines. In this
respect, the 105 project has been introduced with the aim of increasing
productivity by 20% and achieving an average unit cost of £1.05 per gigajoule by
the end of 2003. Several of the Project's activities are at an early stage of
implementation, but benefits have already been demonstrated and will increase as
they are progressively rolled-out.
In 2001 a combination of geological problems together with operating
difficulties at several collieries and one, now resolved, industrial dispute
resulted in the Company's deep mines sustaining an operating loss. On the
positive side, a number of actions have been taken to improve the deep mines
operations, the surface mines performed well and the property business continues
to profit from sales and an increase in ongoing rental income.
Results
In the year to 31 December 2001 net cash inflow from operations was £115.5
million (2000: £82.2 million), including Coal Operating Aid of £75 million,
resulting in a cash inflow of £75.9 million (2000: £52.8 million) before
financing and dividends.
The Group has reported a loss before tax for the year of £26.5 million (2000:
profit of £17.8 million), including a credit of £21.7 million (2000: £53.3
million) in respect of Coal Operating Aid and exceptional costs of £15.8
million. The Coal Operating Aid receipts principally compensated for the first
half operating losses at the Selby Group of Collieries before reaching the £75
million cap.
The Group produced a total of 22.3 million tonnes (2000: 21.1 million tonnes),
with all the operations, both in the UK and in Australia, reporting increased
output. The turnover for the year of £662.5 million (2000: £705.2 million)
reflected a lower level of sales from coal held in stock. Sales were largely to
fulfil existing contractual commitments; the opportunity to take advantage of a
buoyant generation market was limited by production and stock levels to around
500,000 tonnes into the spot sales market.
The average income for UK sales in the year was £30.26 per tonne (2000: £29.90
per tonne), with average costs of £31.35 per tonne (2000: £32.05).
Core UK mining activities produced a loss before tax of £7.7 million before
exceptional costs and interest, but after receipt of Coal Operating Aid, the
deep mines losing £25.0 million and the surface mines making an operating profit
of £17.3 million.
Exceptional costs in the year comprised the write-off in respect of the Went
Edge development at the Prince of Wales Colliery, amounting to £15.8 million.
Balance Sheet
Investment in tangible fixed assets (excluding surface mine development and
restoration assets) in the year amounted to £71.3 million (2000: £27.7 million)
compared to a depreciation charge in the year of £59.4 million (2000: £62.3
million). In addition there has been an exceptional impairment in value of
£15.8 million in respect of Went Edge development costs at Prince of Wales
colliery. As indicated in last year's accounts, expenditure on capital
equipment has been higher than previous years as the remaining equipment has
been purchased for installation at Daw Mill Colliery, to enable coal extraction
to commence from the South Access reserves in April 2002. The other main areas
of capital equipment costs in 2001 were for the upgrading of roof supports at
Maltby, Rossington and Kellingley collieries. Expenditure in 2002 will be
reduced from these levels to a normal maintenance level of circa £40 million.
The bank balance at the year-end was £77.2 million (2000: £25.4 million). The
bank balance includes £35.3 million (2000: £33.4 million) in respect of monies
deposited to cover insurance requirements and £20.6 million (2000: £ nil) in
respect of monies deposited to provide security to the Coal Authority in respect
of subsidence obligations. Borrowings predominantly comprise £22.7 million
(2000: £19.2 million) of hire purchase and finance lease indebtedness on surface
and underground equipment. Net gearing at 31 December 2001 was zero (2000:
zero).
Dividends
Subject to approval at the AGM, the final dividend of 5.0 pence per share (2000:
5.0 pence per share) will be paid on 24 May 2002 to shareholders on the register
at 19 April 2002. The total dividend recommended for the year is 10.0 pence per
share (2000: 10.0 pence per share). The total cost of dividends is £14.6
million (2000: £14.6 million).
Project 105
Project 105 is an examination of all aspects of UK COAL's business. The
objective is to reduce costs and increase productivity by 20% to achieve an
average unit cost of £1.05 per gigajoule by the end of 2003. Costs of
production ended 2001 at £1.28 gigajoule. During 2002, as we continue the main
implementation phase, progress will be made towards the end 2003 cost target.
At this level the Company can remain robust and viable in the future, competing
with imported coals.
UK COAL personnel from deep mining, surface mines, finance, purchasing and human
resources, together with support from Bain & Co and other external consultants,
launched Project 105 in the second half of 2001.
A three-phased approach has been implemented:
• diagnosis of all areas of UK COAL and prioritisation of upside
opportunities;
• design of an organisational structure and processes which will deliver
reductions in costs and improvement in productivity, and
• implementation of actions to realise savings, change the management
processes and build a performance culture.
Several of those activities are at an early stage of implementation, but
benefits have been identified and will increase, as they are progressively
rolled-out during 2002 and 2003.
Operational Review
For the first time since the acquisition of the English coalfield assets,
production at both underground and surface mines was slightly higher than the
previous year. The total UK output was 19.6 million tonnes (2000: 19.1 million
tonnes). Underground mine production was 15.4 million tonnes (2000: 15.2
million tonnes) whilst surface mining operations produced 4.2 million tonnes
(2000: 3.9 million tonnes).
The breakdown of production by UK mines is as follows:
2001 2000
Deep Mines (million tonnes) (million tonnes)
Clipstone 0.4 0.3
Daw Mill 1.2 1.9
Ellington 0.6 0.2
Harworth 1.1 0.9
Kellingley 1.5 1.5
Maltby 1.6 0.9
Prince of Wales 1.3 1.3
Riccall 1.3 1.1
Rossington 0.4 0.7
Stillingfleet 1.7 1.9
Thoresby 1.3 1.7
Welbeck 1.5 1.4
Wistow 1.5 1.4
Sub Total: 15.4 15.2
Surface Mines
13 Mines in total 4.2 3.9
Total 19.6 19.1
Underground Mining
Although year-on-year output was as good as or better than the previous year at
9 of the 13 operational deep mines, the cost of UK sales was adversely affected
by disappointing performances at three collieries in particular. The delay in
mining new South Access reserves at Daw Mill Colliery, Warwickshire and
geological problems on the final face, resulted in a shortfall of some 600,000
tonnes in the year. Production also suffered in the year at Rossington
Colliery, South Yorkshire, due to industrial action, which has been resolved.
At Thoresby Colliery, Nottinghamshire, a geological fault delayed the start of a
new face and reduced output levels, resulting in a loss of production of 330,000
tonnes.
There was a much improved performance from Maltby Colliery, South Yorkshire,
while the mines which resumed production in 2001, Ellington in Northumberland
and Clipstone in Nottinghamshire, produced a million tonnes of coal between
them, but at an operating loss of £8.5 million.
As a result the deep mines have reported a loss of £25 million after Coal
Operating Aid of £21.7 million, but before exceptional costs and interest.
In December, the Company initiated a review of ongoing mining operations at
Prince of Wales Colliery, West Yorkshire because of geological problems in new
working areas in the Went Edge district. The Board subsequently concluded that
the mine could no longer operate as a viable business, a decision supported by
the findings of an independent review commissioned by the DTi, and in January,
announced that the colliery would cease production during the summer of 2002.
Prior to the announcement of the closure, some £15.8 million had been spent on
development of the Went Edge reserves, and this cost has been written off in the
2001 accounts as an exceptional item
Surface Mining
Output from surface mine operations increased to 4.2 million tonnes (2000: 3.9
million tonnes), producing an operating profit of £17.3 million (2000: £10.3
million) including a Council Rates Refund of £6.0 million in respect of various
surface mine sites.
New sites near Burnfoot Moor, East Ayrshire; Ferry Moor near Grimethorpe,
Yorkshire and Forge and Monument, Codnor, Derbyshire containing a total of
approximately 1.5 million tonnes of coal, commenced production in the second
half of the year. Work will start during the second half of 2002 on at least
two new sites - Park Brook near Killamarsh, north Derbyshire and Southfield in
Durham - and possibly the Cutacre Site, near Bolton, Lancashire which between
them contain about 2.2 million tonnes of coal.
Planning approvals were granted during the year for 2.9 million tonnes for new
mines or extensions at existing sites. Planning decisions for three new mines
and extensions on three existing sites containing 3.5 million tonnes of coal,
await determination. Planning applications for further new sites are being
prepared for submission this year, with the focus remaining on brown field sites
and locations that may have the benefit of long term development potential. At
December 2001, sites either in production or with full planning approvals
totalled 10.8 million tonnes (2001: 12.1 million tonnes).
Property
It was a year of significant progress for Harworth Estates, UK COAL's division
which is responsible for the management, operation and development of UK COAL
Group, land and property assets - a portfolio which comprises almost 2,000 sites
ranging from agricultural land and woodlands, coke works and collieries.
The Company has continued to focus attention on three main strategies for
creating value - development of selected sites, active management of existing
tenants, and disposals.
As a result, rental incomes, which stood at £1.1 million in 1995 and rose to
£2.6 million by the year 2000, increased further last year to £3.9 million, this
included a receipt during the year of £0.5 million for sterilisation of land
used by DEFRA during the foot and mouth outbreak. There was further income of
£2.9 million in respect of the sale of two former mining sites.
Other Businesses
In Australia, CIM Resources, our mining operations in New South Wales, increased
sales during the year to 2.9 million tonnes (2000: 2.0 million tonnes), the
additional sales being thermal coal to the power utilities. The activities in
Australia produced an operating profit of £4.2 million (2000: £0.1 million), but
this was eroded by the loss on hedging contracts of £4.4 million (2000: £1.7
million) - entered into in 1997, and which will terminate at the end of 2002.
UK COAL announced in July 2001 that it had been approached by a number of
parties who had expressed an interest in CIM; no firm offer was made during the
year.
Monckton Coke & Chemicals' sales increased to £18.0 million (2000: £16.7
million) principally into the coke market which, despite some modest price
improvements, remains very competitive with readily available cheap imports. A
number of new initiatives have been introduced to minimise costs and, while the
full benefit of these has yet to be felt, the Company reduced its operating loss
in the year to £0.1 million (2000: £0.6 million).
Directors
Gordon McPhie was confirmed as Chief Executive in July 2001, having previously
taken on the role of Acting Chief Executive in March. Gordon, who was previously
Group Finance Director, joined the Company in 1992.
In September, Garold (Gerry) Spindler was appointed as a non-Executive Director
and consultant to the Company. He has broad experience, at the most senior
level, of management change in the coal industry over 35 years in the USA and
Australia.
Outlook
During 2001 the coal burn in the UK experienced 10% growth increasing coal's
contribution in the power generation fuel mix to 38%. With nine different
companies now operating power stations in England and Wales there will continue
to be substantial market opportunities for coal in the foreseeable future.
The Company has a strong forward order book amounting to some 50 million tonnes
over the period to 2010, with a tapering profile of annual contract volumes
going forward. Contracted volumes for 2002 exceed 18 million tonnes at prices
similar to 2001. The platform of contracted sales provides flexibility to
respond to sales opportunities and to manage our production portfolio.
The Company also continues to actively manage and create increasing value from
its property portfolio which has net open market valuation of £95 million.
Measures are being put in place to increase efficiency and reduce costs. With
the benefits of a new management structure focused on performance and results,
the Company is set to gain momentum throughout the year ahead.
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2001
Group Group
2001 2000
Notes £'000 £'000
Turnover 2 662,499 705,185
Cost of sales (671,090) (720,205)
Exceptional items - Redundancy release - 2,671
- Prince of Wales Colliery Went (15,771) -
Edge write-down ---------- ----------
Total cost of Sales (686,861) (717,534)
--------- ----------
Gross loss (24,362) (12,349)
UK Coal Operating Aid Scheme 21,658 53,342
Other operating income and expenses 3 (20,640) (18,531)
--------- ----------
Operating (loss)/profit (23,344) 22,462
Profit on sale of land and buildings 1,857 3,644
--------- ----------
(Loss)/profit on ordinary activities before interest and
taxation (21,487) 26,106
Interest receivable and similar income 4 5,644 4,366
Interest payable and similar charges 5 (2,697) (3,857)
Unwinding of discount on provisions 11 (7,944) (8,854)
Net interest payable (4,997) (8,345)
---------- ----------
(Loss)/profit on ordinary activities before taxation (26,484) 17,761
Taxation 7 8,112 (3,757)
---------- ----------
(Loss)/profit on ordinary activities after taxation (18,372) 14,004
Equity minority interest 96 777
---------- ----------
(Loss)/profit for the period (18,276) 14,781
Dividend 8 (14,584) (14,584)
---------- -----------
(Loss)/retained profit for the period (32,860) 197
====== ======
(Loss)/earnings per ordinary share (12.5p) 10.1p
====== ======
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 31 December 2001
2001 2000
£'000 £'000
(Loss)/profit for the financial year (18,276) 14,781
Exchange adjustments (785) (1,337)
--------- ---------
Total recognised gains and losses for the financial year (19,061) 13,444
===== =====
CONSOLIDATED BALANCE SHEET
for the year ended 31 December 2001
Group Group Company Company
2001 2000 2001 2000
Notes £'000 £'000 £'000 £'000
Fixed assets
Tangible assets 485,787 502,121 - -
Investments - in subsidiaries - - 595,920 21,239
- other 40 40 - -
-------- -------- -------- --------
485,827 502,161 595,920 21,239
Current assets
Stocks 71,866 77,693 - -
Debtors: amounts falling due after 8,318 3,183 20,154 594,835
one year
Debtors: amounts falling due within 86,055 158,529 171,221 158,479
one year
Cash at bank and in hand 13 77,181 25,412 35,444 13,063
--------- --------- ---------- ----------
243,420 264,817 226,819 766,377
--------- ---------- ---------- ---------
Total assets 729,247 766,978 822,739 787,616
====== ===== ====== ======
LIABILITIES
Capital and reserves
Called up share capital 1,458 1,458 1,458 1,458
Share premium account 290,872 290,872 290,872 290,872
Special reserve account 18,919 18,919 191,847 191,847
Capital redemption reserve 257 257 257 257
Profit and loss account 8,060 41,705 59,054 72,854
--------- --------- --------- ---------
Shareholders' funds, 319,566 353,211 543,488 557,288
attributable to equity interests
Equity minority interest 416 1,224 - -
---------- ---------- ---------- ----------
Capital employed 319,982 354,435 543,488 557,288
Provisions for liabilities and 11 257,408 271,974 - -
charges
Creditors: amounts falling due after 12 20,066 14,198 - -
more than one year
Creditors: amounts falling due within 12 131,791 126,371 279,251 230,328
one year
---------- --------- --------- ----------
409,265 412,543 279,251 230,328
---------- --------- --------- ----------
Total funds employed 729,247 766,978 822,739 787,616
====== ====== ====== ======
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2001
2001 2000
£'000 £'000
Operating activities
Net cash inflow from operating activities 115,497 82,223
--------- -----------
Returns from investments and servicing of finance
Interest paid on bank borrowings (157) (740)
Interest paid on hire purchase and finance leases (1,729) (2,150)
Interest paid on corporation tax - (2,644)
Interest received 5,644 4,246
--------- ----------
Net cash inflow/(outflow) from returns on investments and
servicing of finance 3,758 (1,288)
Taxation (481) (6,166)
Capital expenditure and financial investment
Development expenditure (9,980) (11,660)
Purchase of fixed assets (37,243) (16,011)
Receipts from sale of investments - 32
Receipts from sale of fixed assets 4,344 5,628
--------- ----------
(42,879) (22,011)
--------- ----------
Cash inflow before financing and dividends 75,895 52,758
Equity dividends paid (14,573) (13,845)
--------- ---------
Cash inflow before use of liquid resources and financing 61,322 38,913
---------- -----------
Management of liquid resources
Cash deposited in subsidence security fund (20,567) -
Cash deposited to cover insurance requirements (1,849) (637)
-------- ----------
Net cash inflow before financing 38,906 38,276
Financing
Repayment of bank borrowings (896) (28,733)
Hire purchase and finance lease capital repaid (8,609) (20,419)
-------- -----------
Net cash (outflow) from financing (9,505) (49,152)
Increase/(decrease) in cash 29,401 (10,876)
====== ======
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2001
Reconciliation of operating (loss)/profit to net cash inflow from operating
activities
2001 2000
£'000 £'000
Continuing activities
Operating (loss)/profit (23,344) 22,462
Depreciation on tangible fixed assets 59,419 62,281
Went Edge impairment 15,771 -
Net charge for surface mine development and
restoration assets 9,135 16,581
(Profit)/loss on disposal of plant and machinery (246) 426
Decrease in coal and other stocks 5,817 66,750
Decrease/(increase) in debtors 13,877 (12,880)
(Decrease) in creditors (18,274) (20,055)
Decrease/(increase) in Coal Operating Aid 53,342 (53,342)
receivable
--------- --------
Net cash inflow from continuing operating 115,497 82,223
activities
===== ====
Reconciliation of net cash flow to movement in net funds
Cash flow Exchange Other non cash At 31 December
adjustment changes 2001
At 1 January
2001
£'000 £'000 £'000 £'000 £'000
Cash at bank 25,412 51,817 (48) - 77,181
Less: deposits treated as (33,437) (22,416) - - (55,853)
liquid resources (note 13)
--------- --------- --------- --------- ----------
Net cash at bank (8,025) 29,401 (48) - 21,328
Liquid resources 33,437 22,416 - - 55,853
Bank borrowings (801) 896 104 (691) (492)
Hire purchase and finance (19,172) 8,609 - (12,135) (22,698)
leases
-------- --------- --------- --------- ---------
5,439 61,322 56 (12,826) 53,991
===== ===== ===== ===== =====
Major non cash transactions
During the year the group entered into finance lease arrangements in respect of
assets with a total capital value at the inception of the lease of £12,135,000.
1. Accounting policies
The financial statements are prepared under the historic cost convention and in
accordance with applicable accounting standards in the United Kingdom, including
FRS 18 'Accounting Policies' and FRS 19 'Deferred Tax'.
The Company considers that the accounting policies used prior to the adoption of
FRS 18 complied substantially with the objectives and constraints included
within FRS 18 regarding the appropriateness of accounting policies. There are
no material modifications necessary to comply with FRS 18.
During the period the Company has adopted FRS 19 'Deferred Tax'. As a result,
full provision is now made for deferred tax arising on all timing differences.
The Company previously provided for deferred tax on timing differences to the
extent that there was a reasonable probability that such tax would become
payable in the future. This approximated to a full provision basis and adoption
of FRS 19 does not, therefore give rise to any material impact on current or
prior period deferred tax provisions.
2. Segmental and geographical analysis
2001 2000
£'000 £'000
Turnover
Continuing operations:
Coal sales - deep mines 488,924 513,405
Coal sales - surface mines 101,806 138,460
Surface mines contract mining and associated activities 10,598 9,628
Manufactured fuel and combined heat and power 18,046 16,700
Australia - coal sales 39,226 24,357
Property activities 3,899 2,635
--------- ---------
662,499 705,185
===== ====
Geographical Analysis
United Kingdom 615,526 676,480
European Community Countries 3,020 764
Rest of Europe 4,727 3,584
Asia - Pacific 39,226 24,357
--------- ---------
662,499 705,185
====== ====
(Loss)/profit before taxation
Coal sales - deep mines (46,745) (40,245)
- deep mines coal operating aid 21,658 53,342
Exceptional items (Note 4) (15,771) 2,671
Coal sales - surface mines (Note 2) 17,335 10,309
Surface mines contract mining and associated activities (572) 142
Manufactured fuel and combined heat and power (81) (647)
Australia - coal sales 4,246 138
- hedging losses (4,440) (1,744)
Property activities - rentals and ongoing (Note 3) 2,506 1,062
- profit on sales (Note 1) 1,857 1,078
Provision for debtor in liquidation (1,480) -
Net interest payable (4,997) (8,345)
--------- ----------
(Loss)/profit before taxation (26,484) 17,761
===== ====
Net assets/(liabilities)
Continuing operations:
Deep Mines 195,607 283,884
Surface Mines (27,019) (32,931)
Surface mines contract mining and associated activities 8,253 6,756
Manufactured fuel and combined heat and power 2,411 3,878
Australia 13,275 15,024
Property activities 80,810 79,720
--------- ---------
273,337 356,331
Unallocated net assets/(liabilities):
Dividend payable (7,346) (7,335)
Net debt and finance leases 53,991 5,439
--------- ----------
319,982 354,435
Note 1: After allocation of £2.6 million to surface mining in 2000.
(2001: £ nil)
Note 2: Includes income of £6.0 million in respect of Business Rates
Refunds on various surface mine sites. (2000: £ nil)
Note 3: Includes a receipt of £0.5 million for Land sterilisation
(2000: £ nil)
Note 4: Exceptional items in 2001 comprise £15.8 million write-off
of Went Edge development costs at Prince of Wales Colliery. The
exceptional items in 2000 comprise the release of redundancy cost
provisions.
3. Other operating income and expenses
2001 2000
£'000 £'000
Administrative expenses 20,830 18,869
Other operating income (190) (338)
-------- --------
Other operating income & expenses 20,640 18,531
====== =====
Due to the nature of the Group's business, distribution expenses are treated as
a part of cost of sales. Administrative expenses include £2.6 million in
respect of fees paid to Bain & Co, the consultants engaged to assist with
Project 105.
4. Interest receivable and similar income
2001 2000
£'000 £'000
Interest receivable from short-term deposits 5,276 4,246
Other - discounting of long-term receivables 368 120
-------- --------
5,644 4,366
===== =====
5. Interest payable and similar charges
2001 2000
£'000 £'000
On bank loans, overdrafts and other loans repayable within 5 years 157 612
Amortisation of loan issue costs 691 713
On finance leases and hire purchases, repayable within 5 years 1,828 1,589
On finance leases and hire purchases, repayable after 5 years 21 818
Other - discounting of other receivables -- 125
--------- ---------
2,697 3,857
====== =====
6. (Loss)/profit on ordinary activities before taxation
2001 2000
£'000 £'000
(Loss)/profit on ordinary activities before taxation is stated after
crediting:
Rent receivable 3,899 2,635
And after charging:
(Profit)/loss on disposal of tangible fixed assets
- plant and equipment (246) 426
Depreciation - tangible owned assets 48,335 44,036
Depreciation - assets held under hire purchase and finance leases 11,084 18,245
Went Edge impairment 15,771 -
Net charge for surface mine development and restoration assets 9,135 16,581
Auditor's remuneration (Company, £50,000, 2000: £50,000) 301 307
7. Taxation
2001 2000
£'000 £'000
On ordinary activities
United Kingdom corporation tax at 30% (2000: 30%)
Current (6,497) (16,510)
Deferred (3,150) 3,043
Under/(over) provision in respect of prior years
Current (3,634) 411
Deferred 3,494 (1,659)
Overseas taxation (91) 575
-------- --------
(9,878) (14,140)
On exceptional items
United Kingdom corporation tax at 30%
(2000: 30%)
Current 6,497 17,096
Deferred (4,731) 801
--------- ----------
1,766 17,897
--------- ---------
(8,112) 3,757
===== ====
UK corporation tax on exceptional items in 2001 relates to Coal Operating Aid
(£6,497,000) and to the write-off of Went Edge development costs at Prince of
Wales Colliery (£4,731,000). UK corporation tax on exceptional items in 2000
relates to release of redundancy (£801,000), Coal Operating Aid (£16,003,000)
and profit on disposal of fixed assets (£1,093,000).
8. Dividends
2001 2001 2000 2000
pence pence
per share £'000 per share £'000
Interim 5.0p 7,292 5.0p 7,292
Final 5.0p 7,292 5.0p 7,292
-------- -------- --------- --------
10.0p 14,584 10.0p 14,584
===== ===== ===== =====
The number of shares in issue at 31 December 2001 was 145,847,454 (2000:
145,847,273).
Subject to approval at the AGM, the final dividend of 5.0 pence per share (2000:
5.0 pence per share) will be paid on 24 May, 2002 to shareholders on the
register at 19 April, 2002. The total dividend recommended for the year is 10.0
pence per share (2000: 10.0 pence per share).
9. Reconciliation of movements in shareholders' funds
Group Group Company Company
2001 2000 2001 2000
£'000 £'000 £'000 £'000
(Loss)/profit for the financial year (18,276) 14,781 784 5,935
Dividends (note 8) (14,584) (14,584) (14,584) (14,584)
Exchange differences (785) (1,337) - -
------ -------- ------- -------
Movement in shareholders' funds (33,645) (1,140) (13,800) (8,649)
Opening shareholders' funds 353,211 354,351 557,288 565,937
-------- -------- -------- --------
Closing shareholders' funds 319,566 353,211 543,488 557,288
===== ==== ===== =====
10. Pensions
Financial Reporting Standard 17 on Retirement Benefits requires certain
disclosures this year under the transitional arrangements. The standard takes
full effect in 2003 when any surplus or deficit in the pension fund will be
incorporated as an asset or liability in the company's balance sheet.
UK COAL has a mixture of pension funds including money purchase and two defined
benefit schemes in respect of TUPE employees transferred at the time of the
acquisition of British Coal. The defined benefit schemes have been effectively
closed to new entrants since January 1995. A full actuarial valuation of the
defined benefit schemes was carried out as at December 2000 when one scheme was
101% funded and the other scheme was 87% funded. The company has agreed to
increase contributions by 2% (annual cost £0.9 million) from 1st April 2002 to
cover the deficit in the underfunded scheme.
Using the more onerous calculation of liabilities, and valuing the assets at
31st December 2001 in accordance with FRS 17, a liability net of tax of £30
million would have been included in the balance sheet. This will not affect the
funding rate.
11. Provisions for liabilities and charges
At 1 January Created in Released in Utilised in Unwinding of At 31 December
2001 year year year discount 2001
£'000 £'000 £'000 £'000 £'000 £'000
Employer and public 28,063 7,206 - (7,599) 1,304 28,974
liabilities
Surface damage 41,977 3,933 (7,520) (4,928) 1,035 34,497
Concessionary fuel 29,997 4 (1,459) (411) 1,295 29,426
Claims 5,456 1,851 (1,353) (5,427) - 527
Restoration & closure
costs
- surface mines 88,042 4,067 (1,507) (3,339) 2,699 89,962
Restoration & closure
costs
Deep mines-shaft 35,556 22 (135) (1,333) 925 35,035
treatment and pit top
Spoil heaps 11,499 - - (35) 345 11,809
Pumping costs 14,706 - (48) (83) 19 14,594
Ground/groundwater 10,714 - - - 322 11,036
contamination
Gas plant 223 - - (29) - 194
decommissioning
---------- ---------- ---------- ---------- ---------- ----------
266,233 17,083 (12,022) (23,184) 7,944 256,054
Deferred taxation (note 5,741 - - (4,387) - 1,354
7)
-------- -------- -------- --------- -------- ---------
271,974 17,083 (12,022) (27,571) 7,944 257,408
===== ==== ====== ====== ====== ======
12. Creditors
2001 2000
£'000 £'000
Creditors - amounts falling due after more than one year
Hire purchase and finance lease liabilities 15,373 8,473
Retentions 4,693 4,126
Other creditors - 1,599
------- --------
20,066 14,198
------- --------
Creditors - amounts falling due within one year
Trade creditors 58,104 38,029
Other taxation and social security 14,268 15,425
Hire purchase and finance lease liabilities 7,325 10,699
Revolving credit facility* 492 801
Dividends payable 7,346 7,335
Accruals and deferred income 43,666 49,286
Corporation tax 590 4,796
-------- --------
131,791 126,371
===== =====
*Net of FRS 4 issue costs of £0.5 million (2000: £1.2 million)
13. Cash at bank and in hand
2001 2001 2000 2000
Change in year Change in year
£'000 £'000 £'000 £'000
Monies deposited to cover insurance 35,286 1,849 33,437 637
requirements
Subsidence security fund 20,567 20,567 - -
Other cash balances 21,328 29,353* (8,025) (11,131)*
-------- ------- -------- ---------
77,181 51,769 25,412 (10,494)
===== ===== ===== =====
* Includes, £48,000 (2000: £255,000) of exchange differences.
Included within the cash balance of £77.2 million are amounts totalling £35.3
million (2000: £33.4 million) held by the Group's insurance subsidiary and £20.6
million (2000: £ nil) deposited to cover subsidence securities liabilities.
This information is provided by RNS
The company news service from the London Stock Exchange
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