28 August 2014
BISICHI MINING PLC
Interim Results for the period ended 30 June 2014
For the six months ending 30 June 2014
- Group Revenues: £12.313 million (2013: £19.097 million
- EBITDA: £1.077 million (2013: £3.184 million)
- EPS (basic): 26p (2013: 10.07p)
- Assets per share: £1.51 (2013: £1.67)
- Mining in South Africa impacted in first half by heavy rainfall
- Profitability expected to improve in the second half of the year
- UK property portfolio performing well
Michael Heller, chairman, states:
“Although we continue to operate in an environment of extremely low coal prices, we expect the changes implemented at Black Wattle to result in a stronger performance from our South African operations for some time to come.”
END
For further information, please call:
Andrew Heller/Garrett Casey
Bisichi Mining PLC
020 7415 5030
Bisichi Mining PLC
Half year review – 30 June 2014
For the six month period ending on 30 June 2014, Bisichi Mining achieved earnings before interest, tax, depreciation and amortisation of £1.1million (2013: £3.2 million). As previously reported, at the end of last year the open cast mining operations at Black Wattle, our South African coal mining subsidiary, were severely impacted when one of our main production pits ran into unrecorded old underground workings. A turnaround plan was put in place to ensure the mine returned to acceptable levels of profitability by the second half of 2014. As part of that turnaround plan, Black Wattle swiftly relocated machinery to two of our profitable production pits in order to increase production from these areas. In addition, the development of the new reserve at Blue Nightingale was initiated.
The turnaround plan suffered a short-term set-back caused by the unusually heavy rainfall in the first quarter of 2014. This inevitably has had an adverse impact on profitability in the first half of the year but, as a direct result of prompt action by our mine management, the mine had returned to profitability by the end of the second quarter. The Blue Nightingale reserve, referred to above consists of approximately 2.3 million tonnes of coal and we are pleased to report that the reserve is expected to begin to deliver Run of Mine of coal by the end of the third quarter. This coal can be sold either directly to local power utilities or transported to Black Wattle where it will be washed and sold into our existing domestic and export markets. Black Wattle continues to perform well under the Quattro Programme, which allows junior black-economic empowerment coal producers direct access to the coal export market via Richards Bay Coal Terminal. We would like to thank Vunani Limited, our black economic empowered shareholders at Black Wattle, for managing and developing this opportunity. In addition, we are pleased to report that Black Wattle is now a level 4 contributor to Broad Based Black Economic Empowerment (“BBBEE”). We would like to thank our staff for their hard work in achieving this status as well as for their continued efforts in improving our BBBEE rating and credentials. Although we continue to operate in an environment of historically low coal prices, we expect the changes implemented at Black Wattle to result in a stronger performance from our South African operations for some time to come.
Finally, the Company's UK retail property portfolio, which is managed by London & Associated Properties PLC, continues to perform well with voids across the portfolio at the low level of 2.9%. Your directors intend to pay an interim dividend of 1p per share which will be paid on the 6 February 2015, to shareholders on the register at the close of business on 9 January 2015.
On behalf of the Board we would like to thank all our staff for their hard work during the first six months of the year.
Sir Michael Heller Andrew Heller
Chairman Managing Director
27 August 2014
Bisichi Mining PLC
Consolidated income statement
for the six months ended 30 June 2014
| Unaudited 6 months ended 30 June | Unaudited 6 months ended 30 June | Audited Year ended 31 December |
|||
| 2014 | 2013 | 2013 | |||
| Notes | £000 | £000 | £000 | ||
| Group revenue | 1 | 12,313 | 19,097 | 35,105 | |
| Operating costs | (12,858) | (17,492) | (34,968) | ||
| Operating (loss)/profit on trading activities | (545) | 1,605 | 137 | ||
| Decrease in value of investment properties | – | – | (53) | ||
| Decrease in value of other investments | (1) | – | (1) | ||
| Gains/(Loss) on held for trading investments | 4 | (48) | 40 | ||
| Operating (loss)/profit | 1 | (542) | 1,557 | 123 | |
| Share of profit in joint ventures | 285 | 34 | 99 | ||
| (Loss)/Profit before interest and taxation | (257) | 1,591 | 222 | ||
| Interest receivable | 157 | 154 | 326 | ||
| Interest payable | (188) | (170) | (446) | ||
| (Loss)/Profit before taxation | 1 | (288) | 1,575 | 102 | |
| Income tax | 2 | 159 | (404) | 262 | |
| (Loss)/Profit for the period | (129) | 1,171 | 364 | ||
| Attributable to: | |||||
| Equity holders of the company | (28) | 1,063 | 355 | ||
| Non-controlling interest | (101) | 108 | 9 | ||
| (Loss)/ Profit for the period | (129) | 1,171 | 364 | ||
| (Loss)/Earnings per share – basic | 3 | (0.26p) | 10.07p | 3.35p | |
| (Loss)/Earnings per share – diluted | 3 | (0.26p) | 9.92p | 3.30p | |
| Unaudited 6 months ended 30 June | Unaudited 6 months ended 30 June | Audited Year ended 31 December | |||
| 2014 | 2013 | 2013 | |||
| Notes | £000 | £000 | £000 | ||
| Group revenue | 1 | 12,313 | 19,097 | 35,105 | |
| Operating costs | (12,858) | (17,492) | (34,968) | ||
| Operating (loss)/profit on trading activities | (545) | 1,605 | 137 | ||
| Decrease in value of investment properties | – | – | (53) | ||
| Decrease in value of other investments | (1) | – | (1) | ||
| Gains/(Loss) on held for trading investments | 4 | (48) | 40 | ||
| Operating (loss)/profit | 1 | (542) | 1,557 | 123 | |
| Share of profit in joint ventures | 285 | 34 | 99 | ||
| (Loss)/Profit before interest and taxation | (257) | 1,591 | 222 | ||
| Interest receivable | 157 | 154 | 326 | ||
| Interest payable | (188) | (170) | (446) | ||
| (Loss)/Profit before taxation | 1 | (288) | 1,575 | 102 | |
| Income tax | 2 | 159 | (404) | 262 | |
| (Loss)/Profit for the period | (129) | 1,171 | 364 | ||
| Attributable to: | |||||
| Equity holders of the company | (28) | 1,063 | 355 | ||
| Non-controlling interest | (101) | 108 | 9 | ||
| (Loss)/ Profit for the period | (129) | 1,171 | 364 | ||
| (Loss)/Earnings per share – basic | 3 | (0.26p) | 10.07p | 3.35p | |
| (Loss)/Earnings per share – diluted | 3 | (0.26p) | 9.92p | 3.30p | |
Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2014
| Unaudited 6 months ended 30 June | Unaudited 6 months ended 30 June | Audited Year ended 31 December | ||
| 2014 | 2013 | 2013 | ||
| £000 | £000 | £000 | ||
| (Loss)/Profit for the period | (129) | 1,171 | 364 | |
| Other comprehensive income: | ||||
| Exchange differences on translation of foreign operations | (135) | (367) | (858) | |
| Other comprehensive income for the period, net of tax | (135) | (367) | (858) | |
| Total comprehensive income for the period | (264) | 804 | (494) | |
| Attributable to: | ||||
| Equity shareholders | (149) | 738 | (409) | |
| Non-controlling interest | (115) | 66 | (85) | |
| Total comprehensive income for the period | (264) | 804 | (494) | |
| Bisichi Mining PLC | ||||
| Consolidated Balance Sheet | ||||
| as at 30 June 2014 | ||||
| Unaudited 30 June | Unaudited 30 June | Audited 31 December | ||
| 2014 | 2013 | 2013 | ||
| Assets | £000 | £000 | £000 | |
| Non-current-assets | ||||
| Value of investment properties attributable to the group | 11,576 | 11,612 | 11,559 | |
| Fair value of head leases | 196 | 198 | 196 | |
| Investment property | 11,772 | 11,810 | 11,755 | |
| Reserves, plant and equipment | 6,212 | 8,764 | 7,096 | |
| Investments in joint ventures | 3,520 | 3,125 | 3,235 | |
| Loan to joint venture | 984 | 1,080 | 984 | |
| Other investments | 153 | 158 | 151 | |
| Total non-current assets | 22,641 | 24,937 | 23,221 | |
| Current assets | ||||
| Inventories | 1,130 | 1,185 | 1,756 | |
| Trade and other receivables | 7,792 | 7,926 | 8,659 | |
| Corporation tax recoverable | 33 | 45 | 36 | |
| Held for trading investments | 826 | 737 | 822 | |
| Cash and cash equivalents | 1,232 | 2,540 | 1,707 | |
| Total current assets | 11,013 | 12,433 | 12,980 | |
| Total assets | 33,654 | 37,370 | 36,201 | |
| Liabilities | ||||
| Current liabilities | ||||
| Borrowings | (8,173) | (7,840) | (8,042) | |
| Trade and other payables | (6,315) | (7,477) | (8,080) | |
| Current tax liabilities | (2) | (118) | (2) | |
| Total current liabilities | (14,490) | (15,435) | (16,124) | |
| Non-current liabilities | ||||
| Borrowings | (49) | – | (118) | |
| Provision for rehabilitation | (878) | (960) | (874) | |
| Finance lease liabilities | (196) | (198) | (196) | |
| Deferred tax liabilities | (1,704) | (2,606) | (1,902) | |
| Total non-current liabilities | (2,827) | (3,764) | (3,090) | |
| Total liabilities | (17,317) | (19,199) | (19,214) | |
| Net assets | 16,337 | 18,171 | 16,987 | |
| Equity | ||||
| Share capital | 1,064 | 1,056 | 1,064 | |
| Share premium | 249 | 169 | 249 | |
| Translation reserve | (1,690) | (1,130) | (1,569) | |
| Other reserves | 626 | 558 | 587 | |
| Retained earnings | 15,844 | 17,008 | 16,297 | |
| Total equity attributable to equity shareholders | 16,093 | 17,661 | 16,628 | |
| Non-controlling interest | 244 | 510 | 359 | |
| Total equity | 16,337 | 18,171 | 16,987 | |
Bisichi Mining PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2014
| Unaudited 30 June | Unaudited 30 June | Audited 31 December | ||
| 2014 | 2013 | 2013 | ||
| £000 | £000 | £000 | ||
| Cash flows from operating activities | ||||
| Operating (loss)/profit | (542) | 1,557 | 123 | |
| Depreciation | 1,334 | 1,593 | 2,817 | |
| Unrealised (gain)/loss on investments held for trading | (4) | 48 | (40) | |
| Unrealised loss on other investments | 1 | – | 1 | |
| Unrealised loss on investment properties | – | – | 53 | |
| Share based payment expense | 39 | 30 | 120 | |
| Realised share of profit in joint venture | – | 34 | – | |
| Increase in working capital | (515) | (1,489) | (1,752) | |
| Net interest paid | (31) | (16) | (31) | |
| Income tax (paid) /received | – | – | 11 | |
| Cash flow from operating activities | 282 | 1,757 | 1,302 | |
| Cash flows from investing activities | (764) | (2,484) | (3,162) | |
| Cash flows from financing activities | (229) | (371) | (455) | |
| Net decrease in cash and cash equivalents | (711) | (1,098) | (2,315) | |
| Cash and cash equivalents at 1 January | (1,322) | 718 | 718 | |
| Exchange adjustment | 97 | 93 | 275 | |
| Cash and cash equivalents at end of period | (1,936) | (287) | (1,322) | |
| 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 |
1,232 | 2,540 | 1,707 | |
| Bank overdrafts | (3,168) | (2,827) | (3,029) | |
| Cash and cash equivalents at end of period | (1,936) | (287) | (1,322) | |
Bisichi Mining PLC
Consolidated statement of changes in shareholders’ equity
for the six months ended 30 June 2014
| Share | Share | Translation | Other | Retained | Non-
controlling |
Total | |||
| capital | premium | reserve | reserves | earnings | Total | Interest | Equity | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Balance as at 1 January 2013 | 1,056 | 169 | (805) | 528 | 16,367 | 17,315 | 444 | 17,759 | |
| Profit for the period | – | – | – | – | 1,063 | 1,063 | 108 | 1,171 | |
| Other comprehensive income and expense | – | – | (325) | – | – | (325) | (42) | (367) | |
| Total recognised income and expense for the period | – | – | (325) | – | 1,063 | 738 | 66 | 804 | |
| Dividend | – | – | – | – | (422) | (422) | – | (422) | |
| Equity share options | – | – | – | 30 | – | 30 | – | 30 | |
| Balance at 30 June 2013 | 1,056 | 169 | (1,130) | 558 | 17,008 | 17,661 | 510 | 18,171 | |
| Balance as at 1 January 2013 | 1,056 | 169 | (805) | 528 | 16,367 | 17,315 | 444 | 17,759 | |
| Revaluation of investment properties | – | – | – | – | (53) | (53) | – | (53) | |
| Other income statement movements | – | – | – | – | 408 | 408 | 9 | 417 | |
| Profit for the year | – | – | – | – | 355 | 355 | 9 | 364 | |
| Exchange adjustment | – | – | (764) | – | – | (764) | (94) | (858) | |
| Total comprehensive income for the year | – | – | (764) | – | 355 | (409) | (85) | (494) | |
| Dividend | – | – | – | – | (425) | (425) | – | (425) | |
| Share issues | 8 | 80 | – | – | – | 88 | – | 88 | |
| Equity share options | – | – | – | 59 | – | 59 | – | 59 | |
|
Balance at 31 December 2013 |
1,064 | 249 | (1,569) | 587 | 16,297 | 16,628 | 359 | 16,987 | |
| Loss for the year | – | – | – | – | (28) | (28) | (101) | (129) | |
| Exchange adjustment | – | – | (121) | – | – | (121) | (14) | (135) | |
| Total comprehensive income for the period | – | – | (121) | – | (28) | (149) | (115) | (264) | |
| Dividend | – | – | – | – | (425) | (425) | – | (425) | |
| Equity share options | – | – | – | 39 | – | 39 | – | 39 | |
| Balance at 30 June 2014 | 1,064 | 249 | (1,690) | 626 | 15,844 | 16,093 | 244 | 16,337 | |
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2014 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 2013.
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 | ||||||
| 2014 | 2013 | 2013 | ||||||
| Revenue | ||||||||
| Mining | 11,763 | 18,597 | 34,117 | |||||
| Property | 526 | 484 | 953 | |||||
| Other | 24 | 16 | 35 | |||||
| 12,313 | 19,097 | 35,105 | ||||||
| Operating (loss) / profit | ||||||||
| Mining | (877) | 1,319 | (545) | |||||
| Property | 310 | 270 | 596 | |||||
| Other | 25 | (32) | 72 | |||||
| (542) | 1,557 | 123 | ||||||
| Share of profit in joint ventures | 285 | 34 | 99 | |||||
| Interest receivable | 157 | 154 | 326 | |||||
| Interest payable | (188) | (170) | (446) | |||||
| (Loss)/ Profit before taxation | (288) | 1,575 | 102 | |||||
2. Taxation
Based on the results for the period:
| Corporation tax at 23.5% (2013: 23.5%) | – | 114 | – | |
| Prior year adjustment – UK | – | (1) | – | |
| – | 113 | – | ||
| Deferred taxation | (159) | 291 | (213) | |
| Prior year adjustment – UK | – | – | (49) | |
| (159) | 404 | (262) | ||
3. Earnings per share
Both the basic and diluted earnings per share calculations are based on a loss of £28,000 (2013: Profit: £1,063,000). The basic earnings per share has been calculated on 10,636,839 (2013: 10,556,839) ordinary shares being in issue during the year. The diluted earnings per share has been calculated on the number of shares in issue of 10,636,839 (2013: 10,556,839) plus the dilutive potential ordinary shares arising from share options of nil (2013: 155,712) totalling 10,636,839 (2013: 10,712,551). Dilutive potential ordinary shares of 159,648 were excluded from the calculation of diluted ordinary shares as there was no dilutive effect due to the loss for the year.
4. Investment properties
Investment properties are included at valuation as at 31 December 2013 plus additions in the period ended 30 June 2014.
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 2013. The group paid management fees of £68,750 (30 June 2013: £68,750, 31 December 2013: £137,500) 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 2013 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 2014 as were used for the year ended 31 December 2013.
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
- The valuation of investment properties (which are not re-valued at the half year end unless there is evidence of a material change in valuation);
- Depreciation and;
- Provision for rehabilitation (relating to environmental rehabilitation of mining areas)
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.
In terms of the group’s financial position, in the UK discussions are continuing with regard to the extension of the current UK banking facilities, being a £5million term facility and a £1million overdraft facility. The previous extension to the facility expired on the 30th June 2013. The directors consider that a new loan will be agreed in the near future and that the group has sufficient available resources in the interim.
7. Dividend
The interim dividend in respect of 2013, totalling £106,000 was paid on the 31st January 2014. The final dividend in respect of 2013, totalling £319,000 was approved by the shareholders at the Annual General Meeting held on the 11th June 2014 and was paid on the 1st August 2014. The final dividend in respect of 2013 is included as a liability in these interim financial statements.
A proposed interim dividend for the year ended 31 December 2014 totalling £106,000 was approved by the Board of Directors on 27th August 2014 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 2013 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 11 of the 2013 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2014 to the principle risks and uncertainties as set out in the 2013 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 27th August 2014.
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
27 August 2014
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 & Registered office
Heather A Curtis ACIS
24 Bruton Place
London W1J 6NE
Black Wattle Colliery – Directors:
Robert Corry (Chairman)
Andrew Heller (Managing Director)
Garrett Casey (Finance Director)
Robert Grobler (Mining Director)
Ethan Dube (Commercial Director)
Registrars and transfer office:
Capita Asset Services
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: shareholderenquiries@capita.co.uk
Company registration number: 112155 (Incorporated in England and Wales)
Website: www.bisichi.co.uk
E-mail: admin@bisichi.co.uk
