23 August 2023

 

BISICHI PLC

 

 

Interim Results for the period ended 30 June 2023

 

 

For the six months ending 30th June 2023:

 

 

  • EBITDA [1]: £1.42million               (2022: £22.25million)

 

  • Adjusted EBITDA [2]:    £2.17million                (2022: £22.24million)

 

  • Profit before tax             £0.3million                  (2022: £21.17million)

 

  • EPS (basic):           3.18p loss                    (2022: 108.29p)

 

  • The decrease in group earnings in the first half of the year can be attributed to lower coal prices achievable by Sisonke Coal Processing, the Group’s South African coal processing operation, as well as difficult mining conditions at Black Wattle, the Group’s South African mining operation.

 

  • Continued constraints on the South African rail network, adversely impacted Group mining revenue achieved during the period of £25.1million (H1 2022: £44.7million).

 

  • Total mining production from Black Wattle of 354,000 metric tonnes compared to 301,000 metric tonnes in the first half of 2022, and 523,000 in the second half of that year.

 

  • Black Wattle will open a new lower cost mining area in third quarter of 2023, with mining production expected to improve in the second half of 2023.

 

  • An interim dividend of 3p (H1 2022: 10p) declared.

 

END

 

For further information, please call:

 

Andrew Heller/Garrett Casey      Bisichi PLC                             020 7415 5030

[1] Earnings before Interest, taxation, depreciation and amortisation.

[2] Operating profit before depreciation, fair value adjustments and exchange movements.

 

 

Bisichi PLC

Half year review – 30 June 2023

For the six month period ended 30 June 2023, your company made a profit before interest, tax, depreciation and amortisation (EBITDA) of £1.42million (H1 2022: £22.25 million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £2.17million (H1 2022: £22.24million).  The lower earnings for the Group, compared to the first six months of 2022,  are mainly attributable to lower prices for our coal sold by Sisonke Coal Processing, the Group’s South African coal processing operation, as well as difficult mining conditions at our coal mining asset, Black Wattle Colliery.  During 2022, the Group benefited from significantly higher prices of Free on Board (FOB) coal from Richards Bay Coal Terminal (API4 price). However, during the first half of 2023, the weekly API4 price averaged US$128 compared to US$277 in the first half of 2022, and US$270 in the second half of the year. In addition to the weaker international coal price, constraints in transporting coal for export on the South African rail network, constraints which were largely beyond our control, significantly impacted the Group’s export sales during the period. Due to the lack of available rail capacity, the Group exported 59,000 metric tonnes in the first half of 2023, compared to 177,000 metric tonnes in the first half of 2022. This in turn had a further impact on earnings during the period, as coal allocated for export was eventually sold into the domestic market at prices that were significantly lower than the export price achievable by rail through Richards Bay. Transnet, the South African state rail operator, and the wider South African coal industry, are working hard to implement collectively measures to increase rail capacity. At this point, we remain optimistic that these measures will, once implemented, have a significant positive impact on both the export and domestic prices achievable for our coal. At Black Wattle, difficult mining conditions impacted profitability during the period. During the first six months of the year the Group achieved production of 354,000 metric tonnes, compared to 301,000 metric tonnes in the first half of 2022 and 523,000 in the second half of the year. Temporary geological issues reduced the production from our opencast mining area as well as increasing related mining and blasting costs. In order to mitigate these issues, the mine will open a lower cost second mining area in the third quarter of 2023; we expect mining production and costs at Black Wattle to steadily improve going into the fourth quarter of 2023.  Lower coal production from Black Wattle had a knock-on effect on overall levels of coal processed at Sisonke Coal Processing during the period, during which the Group sold 473,000 metric tonnes compared to 614,000 metric tonnes in the first half of 2022 and 1.29million metric tonnes overall in 2022. The decrease in the Group’s mining revenue during the period to £25.1million (H1 2022: £44.7million) can mainly be attributable to the lower prices achievable for our coal, and the lower overall quantity of coal sold.  Looking forward into the second half of 2023, we will see the benefits, both in terms of mining cost and production, from the new mining area at Black Wattle. In addition, we have seen a stabilisation in coal prices in both the export and domestic market. We remain confident in the Group’s ability to achieve significant value from our South African operations.  In the UK, we have seen rental revenue from our retail property portfolio remain stable in the first half of 2023. Overall, the Group billed revenue from our directly owned property portfolio of £0.54million (H1 2022: £0.56million) during the first half of the year. The Group continues to hold its joint venture development investment in West Ealing, with London Associated Properties PLC and Metroprop Real Estate Ltd. We continue to explore options to realise the value from the planning consent for 56 flats we obtained in 2021. We are weighing up the risks and rewards of both a land sale and building out the site, and are optimistic that a decision to realise the best value of this site can be taken shortly. During the period the Group’s total non-current and current listed equity investments held at fair value through profit and loss remained at similar levels as at the end of 2022 at £13.5million (H1 2022: £7.6million). The Group’s dividend income from investments during the period of £0.28million (H1 2022: £0.15million) helped offset a loss in value from investments of £0.6million (H1 2022: Gain £0.1million). The Group’s listed investments continue to comprise primarily listed equities involved in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition.   Finally, your directors intend to pay an interim dividend of 3p (2022: 10p) per share. The dividend will be payable on Friday 2 February 2024 to shareholders registered at the close of business on 5 January 2024.

 

On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work during this period.

 

Andrew Heller

Executive Chairman & Managing Director

22 August 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bisichi PLC

Consolidated income statement

For the six months ended 30 June 2023

 

Unaudited Unaudited Audited
6 months ended                                           6 months ended Year ended
30 June 30 June 31 December
2023 2022 2022
   
Notes  £000  £000  £000
   
Group revenue 1 25,883 45,399            95,111
Operating costs         (24,668)         (23,937)           (57,111)
Operating profit on trading activities 1,215 21,462 38,000
Decrease in value of investment properties                  –              –                  (60)
Gain/(Loss) on investments held at fair value (553) 49 1,036
Operating profit 1           662           21,511             38,976
Share of loss in joint ventures (10) (1)                  (89)
Profit before interest and taxation 652 21,510            38,887
Interest receivable                  124                  39                 174
Interest payable              (477)              (383)               (1,047)
Profit before taxation 1 299 21,166             38,014
Income tax 2               (165)               (5,956)                 (11,908)
 (Loss)/Profit for the period          134          15,210             26,106
       
Attributable to:      
Equity holders of the company (339) 11,562 17,612
Non-controlling interest     473              3,648                8,494
(Loss)/Profit for the period             134         15,210             26,106
   
Loss/Earnings per share – basic 3 (3.18p) 108.29p 164.96p
Loss/Earnings per share – diluted 3 (3.18p) 103.63p 164.96p

 

 

 

 

 

 

 

 

 

Bisichi PLC

Consolidated statement of comprehensive income

For the six months ended 30 June 2023

 

Unaudited Unaudited Audited
6 months

ended                                      

6 months

ended

Year

ended

30 June 30 June 31 December
2023 2022 2022
 £000  £000  £000
 
(Loss)/Profit for the period 134 15,210 26,106
Other comprehensive income/(expenses):  
Exchange differences on translation of foreign operations       (874)       565         (43)
Taxation
Other comprehensive (loss)/income for the period, net of tax    (874)    565         (43)
Total comprehensive (loss)/income for the period     (740)     15,775         26,063
 
Attributable to:    
Equity shareholders       (938)     12,052         17,593
Non-controlling interest         198       3,723          8,470
Total comprehensive (loss)/income for the period       (740)     15,775         26,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bisichi PLC
Consolidated Balance Sheet
 as at 30 June 2023
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Assets £000 £000 £000
Non-current-assets  
Value of investment properties 10,465 10,525 10,465
Fair value of head leases       170       175       175
Investment property 10,635 10,700 10,635
Mining reserves, plant and equipment 14,195 14,342 16,377
Investments in joint ventures 1,031 1,130 1,041
Deferred tax assets 183
Other investments at fair value through profit and loss (“FVPL”)    12,740    6,418   12,590
  Total non-current assets   38,784  32,590   40,634
Current assets  
Inventories 4,502 4,188 5,199
Trade and other receivables 5,651 8,820 6,437
Investments in listed securities held at FVPL 779 1,209 886
Cash and cash equivalents   6,468   5,176  10,590
  Total current assets  17,400  19,393       23,112
Total assets  56,184 51,983  63,755
Liabilities  
Current liabilities  
  Borrowings (3,556) (3,929) (3,795)
  Trade and other payables (9,153) (9,246) (13,282)
  Current tax liabilities     (4,321)    (1,657)    (4,256)
  Total current liabilities   (17,030)  (14,832)  (21,333)
Non-current liabilities  
  Borrowings (3,924) (3,903) (3,930)
  Provision for rehabilitation (1,475) (1,609) (1,715)
  Finance lease liabilities (215) (400)  (344)
  Deferred tax liabilities                –             (57)     (872)
  Total non-current liabilities  (5,614)   (5,969)  (6,861)
Total liabilities (22,644) (20,801) (28,194)
Net assets    33,540     31,182    35,561
Equity  
Share capital 1,068 1,068  1,068
Share premium 258 258 258
Translation reserve (3,158) (2,050) (2,559)
Other reserves 1,112 707  1,112
Retained earnings   32,303  28,940 33,923
Total equity attributable to equity shareholders   31,583  28,923 33,802
Non-controlling interest     1,957               2,259         1,759
 Total equity    33,540    31,182    35,561

 

 

 

 

 

 

Bisichi PLC

Consolidated Cash Flow Statement

For the six months ended 30 June 2023

    Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
 £000  £000  £000
 
Cash flows from operating activities
Operating profit 662 21,511 38,976
Depreciation 764 744              1,093
Unrealised (gain)/loss on investments 553 (49) (1,036)
Unrealised loss on investment properties 60
Share based payment expense 405
Exchange adjustments 188 37 270
Movement in working capital (3,947) (4,960)               (588)
Net interest paid (353) (344)               (553)
Income tax (paid)/received (327) (5,554)               (7,929)
Cash flow from operating activities (2,460) 11,385               30,698
Cash flows from investing activities (1,649) (8,680)             (16,584)
Cash flows from financing activities (513) (1,889)              (7,206)
Net increase/(decrease) in cash and cash equivalents (4,622) 816             6,908
   
 Cash and cash equivalents at 1 January 7,365 482             482
 Exchange adjustment 177 (51)                  (25)
 Cash and cash equivalents at end of period 2,920 1,247              7,365
     
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

6,468 5,176              10,590
Bank overdrafts (3,548) (3,929)            (3,225)
Cash and cash equivalents at end of period 2,920 1,247              7,365
     

 

 

 

 

Bisichi PLC

Consolidated statement of changes in shareholders’ equity

For the six months ended 30 June 2023

 

 

 

  Share Share Translation Available for sale Other Retained   Non-

controlling

Total
  capital premium reserve reserves reserves earnings Total Interest Equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2022 1,068 258 (2,540) 707 18,019 17,512 323 17,835
Profit for the period 11,562 11,562 3,648 15,210
Other comprehensive income and expense 490 490 75 565
Total comprehensive  income  for the period 490 11,562 12,052 3,723 15,755
Dividend (641) (641) (1,787) (2,428)
Balance at 30 June 2022 1,068 258 (2,050) 707 28,940 28,923 2,259 31,182
Balance at 1 January 2022 1,068 258 (2,540) 707 18,019 17,512 323 17,835
Profit for the year 17,612 17,612 8,494 26,106
Other comprehensive income and expense (19) (19) (24) (43)
Total comprehensive  income  for the year (19) 17,612 17,593 8,470 26,063
Dividend (1,708) (1,708) (7,034) (8,742)
Share options cancelled (142) (142) (142)
Share options issued 547 547 547
Balance at 31 December 2022 1,068 258 (2,559) 1,112 33,923 33,802 1,759 35,561
Profit for the year (339) (339) 473 134
Other comprehensive income and expense (599) (599) (275) (874)
Total comprehensive  income  for the period (599) (339) (938) 198 (740)
Dividend (1,281) (1,281) (1,281)
Balance at 30 June 2023 1,068 258 (3,158) 1,112 32,303 31,583 1,957 33,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:                                                                                                                                                             

The results for the six months ended 30 June 2023 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 2022, and which will form the basis of the 2023 Annual report.

 

 

  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.

 

    Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
 
 £000  £000  £000
Revenue  
Mining 25,060 44,692 93,413
Property 543 561              1,108
Other 280 146 590
25,883 45,399 95,111
Operating profit/(loss)  
Mining 715 21,055               36,763
Property 221 264 592
Other (274) 192 1,621
662 21,511               38,976
 
             Share of profit in joint ventures (10) (1) (89)
             Interest receivable 124 39 174
Interest payable (477) (383) (1,047)
Profit/(Loss) before taxation 299 21,166 38,014

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Taxation
    Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
 £000  £000  £000
Based on the results for the period:  
Corporation tax at 27.00% (2022: 27%) 1,015 6,425 11,520
Deferred taxation (850) (469) 388
165 5,956 11,908

 

 

  1. Earnings/ (loss) per share

Both the basic and diluted earnings per share calculations are based on a loss of £339,000 (2022: profit of £11,562,000). The basic earnings per share has been calculated on a weighted average of 10,676,839 (2022: 10,676,839) ordinary shares being in issue during the year. The diluted earnings per share has been calculated on the weighted average number of shares in issue of 10,676,839 (2022: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2022: 479,878) totalling 10,676,839 (2022: 11,156,717).

 

 

  1. Investment properties

Investment properties are held a fair value at each reporting period. Management evaluate on an ongoing basis the impact of the current economic performance of the UK Retail market on the future performance of the group’s existing UK property portfolio. The Directors have placed a valuation on the properties which is not materially different to the value as at 31 December 2022. Therefore no change in fair value of investment properties has been made during the period. Investment properties are therefore included at a Director’s valuation which is considered to be the fair value as at 30 June 2023. Please refer to page 87 to 89 of the 2022 Annual report and Accounts for details on the valuation of investment and development properties as at 31 December 2022.

 

 

  1. 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 2022. The Group paid management fees of £100,000 (30 June 2022: £100,000 December 2022: £200,000) to London & Associated Properties PLC, an associated company.

 

 

  1. 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 31st December 2022 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 Conduct 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 United Kingdom 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 PLC are prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The same accounting policies are used for the six months ended 30 June 2023 as were used for the year ended 31 December 2022.

 

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 areas of estimation and uncertainty in the interim financial statements are in respect of:

 

  • Life of mine and reserves;
  • Depreciation;
  • Provision for rehabilitation (relating to environmental rehabilitation of mining areas);
  • Impairment; and
  • The valuation of investment and development properties

 

Property, plant and equipment representing the group’s mining assets in South Africa are reviewed for impairment where there is evidence of a material impairment. The impairment test indicated significant headroom as at 31 December 2022 and no impairment was considered appropriate. The directors have used similar key assumptions and estimates as outlined on page 76 of the 2022 Annual report and Accounts, and no impairment was considered appropriate as at 30 June 2023.

 

Other areas of estimation and uncertainly are referred to in the Group’s annual financial statements. There have been no significant changes to the basis of accounting of key estimates and judgements as disclosed in the annual report as at 31 December 2022.

 

The Group’s contingent liabilities and bank guarantees are referred to in the Group’s 2022 annual financial statements. Black Wattle Colliery (Pty) Ltd continues to be involved in a tax dispute in South Africa related to Vat. The dispute arose during the year ended 31 December 2020 and is related to events which occurred prior to the years ended 31 December 2020. The interpretation of laws and regulations in South Africa where the Group operates can be complex and can lead to challenges from or disputes with regulatory authorities. Such situations often take significant time to resolve. Where there is a dispute and where a reliable estimate of the potential liability cannot be made, or where the Group, based on legal advice, considers that it is improbable that there will be an outflow of economic resources, no provision is recognised. Further details of the contingent tax liability can be found on page 107 of the 2022 Annual report and Accounts.

 

The interim financial statements have been prepared on the going concern basis. Cashflow forecasts demonstrate that the group has adequate resources to continue in operational existence for the foreseeable future and is well placed to manage its business risks.

 

  1. Dividend

The final dividends in respect of 2022, totalling £1,281,000 was approved  by the shareholders at the Annual General Meeting held on the 6th June 2023 and were paid on the 28th July 2023. The final dividends in respect of 2022 are included as a liability in these interim financial statements. A proposed interim dividend for the year ended 31 December 2023 totalling £320,305 (2022: 1,067,684) was approved by the Board of Directors on 22 August 2023 and has not been included as a liability in these Interim Financial Statements.

 

 

  1. Principal risks and uncertainties

The Group has an established risk management process which works within the corporate governance framework as set out in the 2022 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 19 to 23 of the 2022 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2023 to the principle risks and uncertainties as set out in the 2022 Annual Report & Accounts.

 

Risks faced by the business are assessed by the Board on an ongoing basis. Strategies for mitigating the risks have  been defined and specific measures for achieving these are already underway. These include the measures outlined in the Chairman’s Statement, Mining Review and Financial Review & Performance sections of the 2022 Annual report and Accounts.

 

The principal risks as stated in the 2022 Annual Report & Accounts reflect the challenging environment in which the business operates and are considered under the following broad headings:

 

Mining:

  • Coal price and volume risk
  • Mining risk
  • Currency risk
  • New reserves and mining permissions
  • Power supply risk
  • Flooding risk
  • Environmental risk
  • Health & safety risk
  • Climate change risk
  • Labour risk
  • Cashflow

 

 

Property:

  • Property valuation risk

 

  1. Board approval

These interim results were approved by the Board of Bisichi PLC on 22 August 2023.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTORS RESPONSIBILITY STATEMENT AND REPORT ON PRINCIPAL RISKS           

AND UNCERTAINITIES

 

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 annual report that could do so.

 

This report contains forward-looking statements. These statements are based on current estimates and projections of management and currently available information. Future statements are not guarantees of the future developments and results outlined therein. Rather, future developments and results are dependent on a number of factors; they involve various risks and uncertainties and are based upon assumptions that may not prove to be accurate. Risks and uncertainties identified by the Group are set out on page 19 to 23 of the 2022 Annual Report & Accounts. We do not assume any obligation to update the forward-looking statements contained in this report.

 

 

 

 

 

Andrew Heller

Executive Chairman & Managing Director

22 August 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTORS AND ADVISERS                                                                    

 

 

Directors                                               Andrew R Heller MA, ACA (Executive Chairman & Managing Director)                                                                Robert Grobler PR Cert Eng (Mining Director)

Garrett Casey CA (SA) (Finance Director)

Christopher A Joll MA (Non-executive)

John A Sibbald BL (Non-executive)

John Wong ACA, CFA (Non-executive)

John Heller LLB MBA (Non-executive) (appointed 29th March 2023)

 

Secretary & Registered office                   Garrett Casey CA (SA)

12 Little Portland Street

London W1W 8BJ

 

Black Wattle Colliery – Directors              Andrew Heller (Managing Director)

Garrett Casey (Finance Director)

Ethan Dube (Commercial Director)

Robert Grobler (Mining Director)

Millicent Zvarayi

 

 

Registrars and transfer office                    Link Group

Shareholder Services

Central Square

29 Wellington Street

Leeds

LS14DL

UK Telephone: 0371 664 0300

International Telephone: +44 (0) 371 664 0300

(Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate.  We are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales)

 

Website: www.linkgroup.com

E-mail: shareholderenquiries@linkgroup.co.uk

 

Company registration number                 00112155 (Incorporated in England and Wales)

 

Web site                                                   www.bisichi.co.uk

E-mail                                                      admin@bisichi.co.uk