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 ended 30 June	6 months ended 30 June	Year ended 31 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	30.96p	34.35 p
Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2010
		6 months ended 30 June	6 months ended  30 June	Year ended 31 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
Assets			£000	£000	£000
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 expense		–	263	–	–	263
Total recognised income and expense for the year		–	263	–	3,309	3,572
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 properties		–	–	–	67	67
Other income statement movements		–	–	–	3,606	3,606
Profit for the year		–	–	–	3,673	3,673
Other comprehensive income and expense		–	530	–	–	530
Total recognised income and expense for the year		–	530	–	3,673	4,203
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 expense		–	253	–	–	253
Total recognised income and expense for the period		–	253	–	(162)	91
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

• * the condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
• * the interim management report includes a fair review of the information required by:
• * 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
• * 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)

Website            www.bisichi.co.uk

E-mail            companysecretary@bisichi.co.uk