25 September 2007
BISICHI MINING PLC
Half Year Results to 30 June 2007
RECORD SIX MONTHS FOR BISICHI MINING
2007 2006
Profit before interest, taxation and £2,092,000 £752,000
depreciation
Profit before taxation £1,510,000 £233,000
Diluted earnings per share 10.25 p 2.56 p
* Company increases year-on-year profitability by 278%
* Record profitability at Black Wattle Colliery, South Africa
* Domestic & export coal prices remain strong
* New Minerals Act creating exciting opportunities for Bisichi in South
Africa
Commenting on the results, Michael Heller, Chairman of Bisichi Mining said:
‘Looking to the second half of the year, management will continue to focus on
maintaining the high levels of profitability at our operations at Black Wattle
while at the same time continuing to identify opportunities in South Africa.
With the mine making record profits and a significant increase in the number of
opportunities before us, I look forward to the future with confidence.’
END
For further information, please call:
Andrew Heller/Robert Corry/Tom Kearney, Bisichi Mining PLC 020 7415 5030
Christopher Joll, MJ2 Ltd 020 7491 7776
Chairman’s Statement
I am pleased to report that in the six months ended 30 June 2007, Bisichi
Mining made a profit on ordinary activities before interest, taxation,
depreciation and amortisation of £2,092,000 (2006: £752,000). This is a 278%
increase in profit compared to the same period in 2006 and in large part
reflects the strong performance of the Black Wattle Colliery, which contributed
the most profitable six months in the mine’s history to these excellent results
.
A number of important decisions taken by your management at the Black Wattle
Colliery are continuing to show positive results. Key among these actions was
the decision to take direct control of the washing plant from our contractor.
Capital investment coupled with intensive management of the facility has
resulted in an increase in both the yield and the quality of the washed product
coming out of the plant. The net result has been a sizeable increase in the
amount of coal available for sale, which, in a strong market, has been
particularly profitable.
At the operational level, production continues to keep pace with the strong
demand for our coal and we are consistently performing at the high end of our
monthly target tonnage of 120,000 run of mine tonnes. All sections – both
traditional drill-and-blast, and the mechanized section where our continuous
miner is operating – are producing well while maintaining an excellent safety
record. We are still awaiting final approval from the Department of Minerals
and Energy to commence open cast mining at Black Wattle.
During the period, the market for coal internationally and within South Africa
has been particularly strong. In July, we achieved a 12 percent increase in the
price for our premium low phosphorous product which is sold to the domestic
ferrochrome industry. The price for export coal has also reached a new three
year high and we are taking advantage of the buoyancy in the market by locking
in prices when it suits us to do so. We are now selling export coal `Free on
Rail’ (FOR) at our Uitkyk rail siding, whereas previously we were selling `Free
on Board’ (FOB) at Richards Bay. Because we no longer have to charge our
customers for rail transport and port handling costs, the change in sales terms
impacts our overall turnover figure. Accordingly, the turnover figure for the
period is lower than that for the same period in 2006 but does not reflect any
reduction in sales volumes. In fact, the actual profitability on each tonne
sold has increased due to improved yields and the prices we are receiving for
export coal on a FOR basis. Coal prices for domestic industrial customers also
remain very strong and the sale of our discard product to the local power
industry continues to add a substantial amount of revenue at no cost while
simultaneously reducing our overall rehabilitation liability.
As reported in our 2006 Annual Accounts, the sharp increase in the availability
of mineral rights for development has greatly expanded the pipeline of
potential projects for us to develop. The satellite office in Middelburg is now
fully staffed and is actively pursuing these opportunities as they arise.
Constructive discussions have been taking place between all parties concerning
the Pegasus Reserve and we believe that we are close to a resolution of this
issue. Regarding our shareholder dispute at Black Wattle Colliery, we have
nothing further to report to shareholders at this time except to reiterate that
this legal action does not affect the operation of Black Wattle Colliery nor
its new order mineral rights.
Our UK property portfolio, which is managed by London & Associated Properties
PLC, is virtually fully let. We have been advised that the final tranche
payment following the compulsory purchase of the Ritz site in Bradford will be
released to us shortly. This payment will provide the company with additional
cash reserves.
Looking to the second half of the year, management will continue to focus on
maintaining the high levels of profitability at our operations at Black Wattle
while at the same time continuing to identify opportunities in South Africa.
With the mine making record profits and a significant increase in the number of
opportunities before us, I look forward to the future with confidence.
Michael Heller
Chairman
25 September 2007
Bisichi Mining Plc
Consolidated income statement
for the six months ended 30 June 2007
Notes 6 months 6 months Year
ended Ended Ended
30 June 30 June 31 Dec
2007 2006 2006
£’000 £’000 £`000
Group Revenue * 1 5,009 6,101 13,239
Operating costs (3,506) (5,870) (12,346)
______________ ______________ ______________
Operating profit before 1 1,503 231 893
adjustments
Increase in value of investment – – 1,643
properties
Gains on held for trading 36 32 81
investments
Exceptional items – 7 12
Share of profit in joint venture (6) 77 175
______________ ______________ ______________
Operating profit 1 1,533 347 2,804
Interest receivable 169 87 232
Interest payable (192) (201) (422)
______________ ______________ ______________
Profit before taxation 1,510 233 2,614
Income tax expense 2 (394) 10 (489)
______________ ______________ ______________
Profit for the period 1,116 243 2,125
______________ ______________ ______________
Profit attributable to equity 1,116 276 2,125
shareholders
(Loss) profit attributable to – (33) –
minority interest
______________ ______________ ______________
1,116 243 2,125
______________ ______________ ______________
Earnings per share 3 10.68p 2.64p 20.33p
______________ ______________ ______________
Diluted earnings per share 3 10.25p 2.56p 19.68p
______________ ______________ ______________
* Mining revenue for 2007 reflects the export coal sold on a `Free on Rail’
(FOR) basis, whereas in 2006 it was on a `Free on Board’ (FOB) basis at
Richards Bay Coal Terminal, which included additional rail transport and
port handing costs.
Bisichi Mining Plc
Consolidated balance sheet
As at 30 June 2007
Notes 30 June 30 June 31 Dec
2007 2006 2006
£’000 £’000 £’000
Assets
Non-current assets
Value of properties 4 17,278 15,607 17,270
attributable to group
Fair value of head leases 153 153 146
Property 17,431 15,760 17,416
Reserves, plant and equipment 5,185 4,430 5,415
Investments in joint venture 2,786 2,028 2,637
Other investments 302 986 391
Deferred tax asset – 313 234
_______________ _______________ _______________
Total non-current assets 25,704 23,517 26,093
_______________ _______________ _______________
Current assets
Inventories 78 163 56
Trade and other receivables 2,875 1,965 2,056
Held for trading investments 736 662 700
Interest derivative 39 37 53
Cash and cash equivalents 3,804 3,162 3,275
_______________ _______________ _______________
Total current assets 7,532 5,989 6,140
_______________ _______________ _______________
Total assets 33,236 29,506 32,233
_______________ _______________ _______________
Liabilities
Current liabilities
Borrowings (3,333) (2,944) (3,302)
Trade and other payables (5,605) (3,699) (5,887)
Current tax liabilities (248) (60) (33)
_______________ _______________ _______________
Total current liabilities (9,186) (6,703) (9,222)
_______________ _______________ _______________
Non-current liabilities
Borrowings (3,480) (4,319) (3,402)
Finance lease liabilities (153) (153) (146)
Deferred tax liabilities (2,915) (2,523) (2,974)
_______________ _______________ _______________
Total non-current liabilities (6,548) (6,995) (6,522)
_______________ _______________ _______________
Total liabilities (15,734) (13,698) (15,744)
_______________ _______________ _______________
Net assets 17,502 15,808 16,489
_______________ _______________ _______________
Equity
Share capital 1,045 1,045 1,045
Translation reserve (1,344) (699) (1,241)
Other reserves 189 125 189
Retained earnings 17,612 14,882 16,496
_______________ _______________ _______________
Total shareholders’ equity 17,502 15,353 16,489
Minority interest in equity – 455 –
_______________ _______________ _______________
Total equity 17,502 15,808 16,489
_______________ _______________ _______________
Bisichi Mining Plc
Consolidated CASH FLOW STATEMENT
For the six months ended 30 June 2007
30 June 30 June 31 December
2007 2006 2006
£’000 £’000 £’000
Cash flows from operating
activities
Operating profit 1,533 347 2,804
Depreciation 559 405 933
Unrealised gain on investments (36) (32) (81)
held for trading
Unrealised gain on investment – – (1,643)
properties
Share of profit from joint (6) (77) (175)
venture
Hedging – (1) –
Share based payment expense – 11 75
(Increase) decrease in net (960) 2,454 1,503
current assets
Net interest paid (23) (114) (190)
Income tax paid (6) (191) 28
_____________ _____________ _____________
Cash flows from operating 1,061 2,802 3,254
activities
Cash flows from investing (540) (636) (1,884)
activities
Cash flow from financing (594) (281) 647
activities
_____________ _____________ _____________
Net (decrease) increase in cash (73) 1,885 2,017
and cash equivalents
Cash and cash equivalents at 1 978 (969) (969)
January
Exchange adjustment – 126 (70)
_____________ _____________ _____________
Cash and cash equivalents at 905 1,042 978
period end
_____________ _____________ _____________
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 3,804 3,162 3,275
Bank overdraft (2,899) (2,120) (2,297)
_____________ _____________ _____________
Cash and cash equivalents at 905 1,042 978
end of period
_____________ _____________ _____________
Bisichi Mining Plc
Consolidated STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2007
Share Translation Other Retained Total Minority Total
reserve earnings
capital reserves interest equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 1,045 56 114 14,606 15,821 592 16,413
2006
Movement on fair – – – 37 37 – 37
value of derivatives
Other income – – – 239 239 (33) 206
statement movements
Profit for the period – – – 276 276 (33) 243
Exchange adjustments – (755) – – (755) (104) (859)
Total recognised – (755) – 276 (479) (137) (616)
income and expense
for the period
Equity share options – – 11 – 11 – 11
Balance at 30 June 1,045 (699) 125 14,882 15,353 455 15,808
2006
Balance at 1 January 1,045 56 114 14,606 15,821 592 16,413
2006
Revaluation of – – – 1,643 1,643 – 1,643
investment property
Movement on fair – – – 17 17 – 17
value of derivatives
Other income – – – 465 465 – 465
statement movements
Profit for the year – – – 2,125 2,125 – 2,125
Exchange adjustments – (1,297) – – (1,297) – (1,297)
Total recognised – (1,297) – 2,125 828 – 828
income and expense
for the year
Dividend – – – (235) (235) – (235)
Cancellation of – – – – – (592) (592)
minority interest
Equity share options – – 75 – 75 – 75
Balance at 31 1,045 (1,241) 189 16,496 16,489 – 16,489
December 2006
Movement on fair – – – (14) (14) – (14)
value of derivatives
Other income – – – 1,130 1,130 – 1,130
statement movements
Profit for the period – – – 1,116 1,116 – 1,116
Exchange adjustments – (103) – – (103) – (103)
Total recognised – (103) – 1,116 1,013 – 1,013
income and expense
for the period
Balance at 30 June 1,045 (1,344) 189 17,612 17,502 – 17,502
2007
Bisichi Mining Plc
ACOUNTING POLICIES aND NOTES TO ACCOUNTS
The results for the six months ended 30 June 2007 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 2006.
1 SEGMENTAL ANALYSIS 30 June 30 June 31 December
2007 2006 2006
£’000 £’000 £’000
Revenue *
Mining 4,479 5,556 12,138
Property 505 524 1,064
Other 25 21 37
_____________ _____________ _____________
5,009 6,101 13,239
_____________ _____________ _____________
Operating profit before
adjustments
Mining 1,215 23 534
Property 268 198 350
Other 20 10 9
_____________ _____________ _____________
1,503 231 893
_____________ _____________ _____________
Operating profit
Mining 1,215 42 516
Property 268 262 2,198
Other 50 43 90
_____________ _____________ _____________
1,533 347 2,804
_____________ _____________ _____________
* Mining revenue for 2007 reflects the export coal sold on a `Free on Rail’
(FOR) basis, whereas in 2006 it was on a `Free on Board’ (FOB) basis at
Richards Bay Coal Terminal, which included additional rail transport and
port handing costs.
2 TAXATION 30 June 30 June 31 December
2007 2006 2006
£’000 £’000 £’000
Based on the results for the year:
Corporation tax at 30% (2006: 30%) 437 45 (46)
Adjustment in respect of prior – – 143
years -UK
_______ _______ _______
Current tax 437 45 97
Deferred tax (43) (55) 392
_______ _______ _______
Total tax in income statement 394 (10) 489
_______ _______ _______
3 EARNING PER SHARE
Both the basic and diluted earnings per share calculations are based on a
profit of £1,116,000 (2006: £276,000). The basic earnings per share have been
calculated on 10,451,506 (2006: 10,451,506) ordinary shares being in issue
during the period. The diluted earnings per share have been calculated on the
number of shares in issue of 10,451,506 (2006: 10,451,506) plus the dilutive
potential ordinary shares arising from share options of 432,175 (2006: 340,055)
totalling 10,883,681 (2005: 10,791,561).
4 PROPERTIES
Properties are included at valuation as at 31 December 2006 plus additions in
the period ended 30 June 2007.
5 FINANCIAL INFORMATION
The above financial information does not constitute statutory accounts within
the meaning of section 240 of the Companies Act 1985. Statutory accounts for
the year ended 31 December 2006 which were prepared under International
Financial Reporting Standards, 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 237(2) or (3) of the Companies Act 1985.
6 BOARD APPROVAL
These half year results were approved by the Board of Bisichi Mining PLC on 25
September 2007.
7 POSTING TO SHAREHOLDERS
The half year report will be sent to shareholders by mail. Copies are available
at the company’s registered office: 30-35 Pall Mall, London 5LH and may also be
downloaded from the company’s website: www.bisichi.co.uk .
END