30 August 2011
BISICHI MINING PLC
Interim Results for the period ended 30 June 2011
HIGHLIGHTS
- Board remains optimistic about the Full Year despite a first half loss from the Group’s direct mining operations in South Africa.
- 3rd open cast pit at Black Wattle opened to accelerate production to full capacity of the washing plant by Q4.
- By end of Q2 a proportion of coal sales successfully switched to lower priced but higher profitability product.
- At the end of first half the Group had negligible net debt and cash balances of £4.8 million.
- UK retail investment property portfolio continues to perform well.
- Interim dividend of 1p per share.
END
For further information, please call:
Andrew Heller, Bisichi Mining PLC 020 7415 5030
Bisichi Mining PLC
Half year review – 30 June 2011
In the last Chairman’s statement I stated that we believed that the Group will return to acceptable levels of profitability in the second half of this year. Although in the first six months of 2011 we have experienced an ongoing loss at Black Wattle Colliery, our direct coal mining subsidiary in South Africa, we continue to remain optimistic about the Group results in the second half of 2011.
At Black Wattle, the build-up in production of coal in the first six months of 2011 has been slower than anticipated. In order to accelerate the increase, a third opencast pit has been opened. Combined production from all three opencast pits is expected to reach maximum washing plant capacity during the last quarter of the year.
On the marketing side, we have started selling some of our coal into markets that require lower quality product. Although the prices are lower in these markets our profitability is higher: the higher yield that can be achieved through the washing plant to attain these lower qualities more than offsets the price reduction. July was the first month of washing to produce this lower quality coal and we have returned to profitability as a result, even before the benefits from the increased production from the three opencast pits takes effect. We are optimistic of achieving operating margins sufficient to redress the losses experienced at the mine in the first half of 2011.
As at the 30th June 2011, Bisichi continues to have very little net debt and cash balances of over £4.8 million which we will use to expand Group activities. For example, during the first six months of this year Bisichi acquired a 12.5% interest in a shopping centre in Eastbourne for just under £1 million cash. The shopping centre is managed by London and Associated Properties plc who also manage Bisichi’s other properties. The property was bought on a net initial yield of 8% and has potential retail development opportunities.
Bisichi’s remaining UK property portfolio continues to perform well with no reduction in rental income in the first six months of the year. Voids continue to remain low.
Finally, I am pleased to inform shareholders that the Bisichi Mining will be paying an interim dividend of 1p per share. The dividend will be paid on the 3rd February 2012, to shareholders on the register at the close of business on 6th January 2012.
On behalf of the Board I would like to thank all our staff for their hard work during the first six months of the year and to say that we continue to look forward to the future with confidence.
Michael Heller Andrew Heller
Chairman Managing Director
30 August 2011
Bisichi Mining PLC
Consolidated income statement
for the six months ended 30 June 2011
| Unaudited 6 months ended 30 June | Unaudited 6 months ended 30 June | Audited Year ended 31 December | |||
| 2011 | 2010 | 2010 | |||
| Notes | £000 | £000 | £000 | ||
| Group revenue | 1 | 13,228 | 15,426 | 32,824 | |
| Operating costs | (14,877) | (15,772) | (34,864) | ||
| Operating loss on trading activities | (1,649) | (346) | (2,040) | ||
| Increase in value of investment properties | – | – | 245 | ||
| Gains on held for trading investments | 3 | 9 | 90 | ||
| Operating loss | 1 | (1,646) | (337) | (1,705) | |
| Share of (loss)/profit in joint ventures | (1) | – | 61 | ||
| Loss before interest and taxation | (1,647) | (337) | (1,644) | ||
| Interest receivable | 13 | 84 | 174 | ||
| Interest payable | (197) | (139) | (343) | ||
| Loss before taxation | 1 | (1,831) | (392) | (1,813) | |
| Income tax | 2 | 631 | 230 | 527 | |
| Loss for the period | (1,200) | (162) | (1,286) | ||
| Attributable to: | |||||
| Equity holders of the company | (933) | (162) | (1,212) | ||
| Non-controlling interest | (267) | – | (74) | ||
| Loss for the period | (1,200) | (162) | (1,286) | ||
| Earnings per share – basic | 3 | (11.48)p | (1.55)p | (11.60)p | |
| Earnings per share – diluted | 3 | (11.48)p | (1.55)p | (11.60)p | |
Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2011
| Unaudited 6 months ended 30 June | Unaudited 6 months ended 30 June | Audited Year ended 31 December | ||
| 2011 | 2010 | 2010 | ||
| £000 | £000 | £000 | ||
| Loss for the period | (1,200) | (162) | (1,286) | |
| Other comprehensive income: | ||||
| Exchange differences on translation of foreign operations | (175) | 253 | 747 | |
| Other comprehensive income for the period, net of tax | (1,375) | 91 | (539) | |
| Total comprehensive income for the period | (1,375) | 91 | (539) | |
| Attributable to: | ||||
| Equity shareholders | (1,092) | 91 | (459) | |
| Non-controlling interest | (283) | – | (80) | |
| Total comprehensive income for the period | (1,375) | 91 | (539) | |
| Bisichi Mining PLC | ||||
| Consolidated Balance Sheet | ||||
| as at 30 June 2011 | ||||
| Unaudited 30 June | Unaudited 30 June | Audited 31 December | ||
| 2011 | 2010 | 2010 | ||
| Assets | £000 | £000 | £000 | |
| Non-current-assets | ||||
| Value of investment properties attributable to the group | 12,110 | 11,868 | 12,110 | |
| Fair value of head leases | 227 | 246 | 233 | |
| Property | 12,337 | 12,114 | 12,343 | |
| Reserves, plant and equipment | 9,285 | 8,597 | 9,615 | |
| Investments in joint ventures | 4,425 | 3,359 | 3,607 | |
| Other investments | 150 | 149 | 150 | |
| Total non-current assets | 26,197 | 24,219 | 25,715 | |
| Current assets | ||||
| Inventories | 811 | 2,862 | 705 | |
| Trade and other receivables | 4,620 | 6,119 | 4,719 | |
| Corporation tax recoverable | 55 | 41 | 115 | |
| Held for trading investments | 899 | 519 | 605 | |
| Cash and cash equivalents | 4,848 | 5,565 | 5,399 | |
| Total current assets | 11,233 | 15,106 | 11,543 | |
| Total assets | 37,430 | 34,712 | 37,258 | |
| Liabilities | ||||
| Current liabilities | ||||
| Borrowings | (3,087) | (2,886) | (1,759) | |
| Trade and other payables | (9,352) | (7,768) | (7,865) | |
| Current tax liabilities | (409) | (13) | (362) | |
| Total current liabilities | (12,848) | (10,667) | (9,986) | |
| Non-current liabilities | ||||
| Borrowings | (5,209) | (5,753) | (5,326) | |
| Provision for rehabilitation | (1,038) | (868) | (1,025) | |
| Finance lease liabilities | (227) | (246) | (233) | |
| Deferred tax liabilities | (1,546) | (2,818) | (2,340) | |
| Total non-current liabilities | (8,020) | (9,685) | (8,924) | |
| Total liabilities | (20,868) | (20,352) | (18,910) | |
| Net assets | 16,562 | 18,973 | 18,348 | |
| Equity | ||||
| Share capital | 1,045 | 1,045 | 1,045 | |
| Translation reserve | (91) | (432) | 68 | |
| Other reserves | 492 | 480 | 485 | |
| Retained earnings | 15,005 | 17,880 | 16,356 | |
| Total equity attributable to equity shareholders | 16,451 | 18,973 | 17,954 | |
| Non-controlling interest | 111 | – | 394 | |
| Total equity | 16,562 | 18,973 | 18,348 | |
Bisichi Mining PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2011
| Unaudited 30 June | Unaudited 30 June | Audited 31 December | ||
| 2011 | 2010 | 2010 | ||
| £000 | £000 | £000 | ||
| Cash flows from operating activities | ||||
| Operating loss | (1,646) | (337) | (1,705) | |
| Depreciation | 1,294 | 986 | 2,414 | |
| Unrealised gain on investments held for trading | (3) | (9) | (90) | |
| Unrealised gain on investment properties | – | – | (245) | |
| Share based payment expense | 7 | – | 5 | |
| Decrease/(increase) in working capital | 1,291 | (3,976) | (635) | |
| Net interest paid | (184) | (55) | (169) | |
| Income tax paid | (116) | (192) | (112) | |
| Cash flow from operating activities | 643 | (3,583) | (537) | |
| Cash flows from investing activities | (2,394) | (798) | (2,234) | |
| Cash flows from financing activities | (257) | 2,203 | 1,651 | |
| Net decrease in cash and cash equivalents | (2,008) | (2,178) | (1,120) | |
| Cash and cash equivalents at 1 January | 3,977 | 5,077 | 5,077 | |
| Exchange adjustment | 65 | (25) | 20 | |
| Cash and cash equivalents at end of period | 2,034 | 2,874 | 3,977 | |
| 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 | 4,848 | 5,565 | 5,399 | |
| Bank overdrafts | (2,814) | (2,691) | (1,422) | |
| Cash and cash equivalents at end of period | 2,034 | 2,874 | 3,977 | |
Bisichi Mining PLC
Consolidated statement of changes in shareholders’ equity
for the six months ended 30 June 2011
| Share | Translation | Other | Retained | Non-controlling | Total | |||
| capital | reserve | reserves | earnings | Total | interest | Equity | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Balance as at 1 January 2010 | 1,045 | (685) | 480 | 18,460 | 19,300 | – | 19,300 | |
| Loss for the period | – | – | – | (162) | (162) | – | (162) | |
| Other comprehensive income and expense | – | 253 | – | – | 253 | – | 253 | |
| Total recognised income and expense for the period | – | 253 | – | (162) | 91 | – | 91 | |
| Dividend | – | – | – | (418) | (418) | – | (418) | |
| Balance at 30 June 2010 | 1,045 | (432) | 480 | 17,880 | 18,973 | – | 18,973 | |
| Balance as at 1 January 2010 | 1,045 | (685) | 480 | 18,460 | 19,300 | – | 19,300 | |
| Revaluation of investment properties | – | – | – | 245 | 245 | – | 245 | |
| Other income statement movements | – | – | – | (1,457) | (1,457) | (74) | (1,531) | |
| Loss for the year | – | – | – | (1,212) | (1,212) | (74) | (1,286) | |
| Exchange adjustment | – | 753 | – | – | 753 | (6) | 747 | |
| Total comprehensive income for the year | – | 753 | – | (1,212) | (459) | (80) | (539) | |
| Dividend | – | – | – | (418) | (418) | – | (418) | |
| Equity share options | – | – | 5 | – | 5 | – | 5 | |
| Disposal of shares in subsidiary | (474) | (474) | 474 | – | ||||
| Balance at 31 December 2010 | 1,045 | 68 | 485 | 16,356 | 17,954 | 394 | 18,348 | |
| Loss for the year | – | – | – | (933) | (933) | (267) | (1,200) | |
| Exchange adjustment | – | (159) | – | – | (159) | (16) | (175) | |
| Total comprehensive income for the period | – | (159) | – | (933) | (1,092) | (283) | (1,375) | |
| Dividend | – | – | – | (418) | (418) | – | (418) | |
| Equity share options | 7 | – | 7 | 7 | ||||
| Balance at 30 June 2011 | 1,045 | (91) | 492 | 15,005 | 16,451 | 111 | 16,562 | |
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2011 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 2010.
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 30 June | Unaudited 30 June | Audited 31 December | |||||
| 2011 | 2010 | 2010 | |||||
| Revenue | |||||||
| Mining | 12,700 | 14,924 | 31,826 | ||||
| Property | 491 | 492 | 975 | ||||
| Other | 37 | 10 | 23 | ||||
| 13,228 | 15,426 | 32,824 | |||||
| Operating (Loss)/profit | |||||||
| Mining | (1,970) | (618) | (2,664) | ||||
| Property | 288 | 268 | 861 | ||||
| Other | 36 | 13 | 98 | ||||
| (1,646) | (337) | (1,705) | |||||
| Share of (loss)/profit in joint ventures | (1) | – | 61 | ||||
| Interest receivable | 13 | 84 | 174 | ||||
| Interest payable | (197) | (139) | (343) | ||||
| Loss before taxation | (1,831) | (392) | (1,813) |
2. Taxation
Based on the results for the period:
| Corporation tax at 27% (2010 : 28%) | 115 | 21 | 352 | |
| Prior year adjustment – UK | – | – | 6 | |
| 115 | 21 | 358 | ||
| Deferred taxation | (746) | (251) | (885) | |
| (631) | (230) | (527) | ||
3. Earnings per share
Both the basic and diluted earnings per share calculations are based on a loss of £1,200,000 (2010: £162,000). The basic earnings per share has been calculated on 10,451,506 (2010: 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 (2010: 10,451,506) plus the dilutive potential ordinary shares arising from share options of nil (2010: nil ) totalling 10,451,506 (2010: 10,451,506).
Dilutive potential ordinary shares of 259,812 (2010: 270,611) were excluded from the calculation of diluted ordinary shares as there was no dilutive effect due to the loss for the period.
4. Properties
Properties are included at valuation as at 31 December 2010 plus additions in the period ended 30 June 2011.
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 2010. The group paid management fees of £137,500 (30 June 2010: £150,000, 31 December 2010: £275,000) 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 31st December 2010 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 2011 as were used for the year ended 31 December 2010.
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 re-valued 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 2010, totalling £105,000 was paid on the 4th February 2011. The final dividend in respect of 2010, totalling £313,000 was approved by the shareholders at the Annual General Meeting held on the 7th June 2011 and was paid on the 15th August 2011. The final dividend in respect of 2010 is included as a liability in these interim financial statements.
A proposed interim dividend for the year ended 31 December 2011 totalling £105,000 was approved by the Board of Directors on 30th August 2011 and has not been included as a liability in these Interim Financial Statements.
8 Principal risks and uncertainties
The Group has an established risk management process which works within the corporate governance framework as set out in the 2010 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 13 of the 2010 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2011 to the principle risks and uncertainties as set out in the 2010 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 30 August 2011.
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.
Michael Heller Andrew Heller
Chairman Managing Director
30 August 2011
DIRECTORS AND ADVISERS
Directors Michael A Heller MA, FCA (Chairman)
Andrew R Heller MA, ACA (Managing Director)
Robert Grobler PR Cert Eng (Mining Director)
Garrett Casey CA (SA) (Finance Director)
C A Joll MA (Non-executive)
John A Sibbald MA (Non-executive)
Secretary & Heather A Curtis ACIS
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)
Ethan Dube
General mine manager Luis Pinel
Registrars and transfer office Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
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 admin@bisichi.co.uk
