27 September 2006
BISICHI MINING PLC
Interim Results to 30 June 2006
STRONG TURNAROUND IN THE FIRST HALF OF 2006
2005 2004
Profit before interest, taxation and £752,000 £1,631,000
depreciation
Profit before taxation £233,000 £1,060,000
Diluted earnings per share 2.56 p 7.01 p
* Black Wattle Colliery returned to profitability in the Second Quarter
* Continuous Miner overhauled and back in full scale operation
* Washing plant now directly operated by Black Wattle Colliery
* Price increases secured for low phosphorus and domestic thermal products
* Performance underpinned by property investment portfolio
* Cash resources continue to grow
Commenting on the results, Michael Heller, chairman of Bisichi Mining said:
‘With the turnaround in the mine complete, and with the cash resources that we
have available, we are now focussing on the substantial opportunities that
exist for the development of our mining activities in South Africa. With this
in mind, I look forward to the future with confidence.’
END
For further information, please call:
Andrew Heller/Robert Corry, Bisichi Mining PLC 020 7415 5030
Christopher Joll, MJ2 Ltd 020 7491 7776
Chairman’s Review
I am pleased to report that in the six months ended 30 June 2006, Bisichi
Mining made a profit on ordinary activities before interest, taxation, and
depreciation of £752,000 (2005: £1,631,000). As we explained in the 2005 Annual
Report, the 54 percent decrease in profit compared to the same period in 2005
was expected and was a direct consequence of the suspension of the operation of
the Continuous Miner at Black Wattle Colliery for the first three months of
2006, combined with the mining of lower yielding sections. That the first three
months of 2006 were loss-making but the first half was profitable is powerful
evidence of our mine management’s ability to address promptly, and to overcome,
serious issues on the mine.
A number of important events have taken place in the first six months of 2006
which have accelerated the turnaround at Black Wattle. Key among these were the
overhauling of the Continuous Miner to operate in areas of lower seam height;
successfully negotiating an 11 percent price increase for our low phosphorus
product; and securing a 15 percent increase on the price we receive for our
domestic thermal coal.
In the same period, we have also received new order mining rights for the
portions of Black Wattle which we intend to mine by opencast methods, a
substantially cheaper production method than underground mining. The next stage
is to apply for a mining licence from the Department of Minerals and Energy in
order to commence opencast mining in these areas.
We have also taken direct operational control of the washing plant from our
contractors. We believe that this action should see an improvement in the
overall washing plant yield and efficiencies, but given that this process takes
some time, the results of this change will only impact fully in 2007.
Shareholders should be aware that the mine’s fixed price export contract comes
to a conclusion in the second half of 2006. Since the signing of that contract
in April 2004, we have received annual increases in our RBCT allocation. As a
result, we have effectively accelerated by six months what was originally a
three year contract. However, given the volatility of the international coal
price and the strength of the domestic market, we now can take advantage of
opportunities in either market as they arise.
On other matters, we anticipate completing the purchase of the Pegasus Coal
Reserve in the near future; this has been on hold pending the grant of new
order mining rights by the Department of Minerals and Energy, which have not
yet come through. We now anticipate developing the project towards the end of
2007. In the meantime, we are in active discussions with a number of interested
parties to acquire additional coal reserves in South Africa.
Our UK property portfolio, which is managed by London & Associated Properties
PLC, has continued to provide us with a reliable income and has proved our
business strategy by underpinning our performance in the second half of 2005
and the start of 2006. During the period, we completed the sale of the Ritz
site in Bradford which was the subject a Compulsory Purchase Order, and this
has released substantial cash into the company. The portfolio is virtually
fully let.
Finally, I am pleased to report that the Department of Minerals and Energy has
absolved the management of the Black Wattle Colliery for any responsibility for
the fatal accident which occurred in the second half of 2005. The health and
safety of our workers is of utmost concern to us and the event has led mine
management to redouble its efforts to ensure a safe working environment at all
our operations.
As we move into the second half of the year, management’s key challenge will be
to maintain the momentum in our South African mining activities built up during
the second quarter of 2006 and to consolidate the productivity increases at
Black Wattle that have been achieved during the same period. With the
turnaround in the mine complete, and with the cash resources that we have
available, we are now focussing on the substantial opportunities that exist for
the development of our mining activities in South Africa. With this in mind, I
look forward to the future with confidence.
Michael Heller
Chairman
27 September 2006
Bisichi Mining Plc
Consolidated income statement
for the six months ended 30 June 2006
Notes 6 months 6 months Year
ended ended Ended
30 June 30 June 31 Dec
2006 2005 2005
£’000 £’000 £`000
Group Revenue 1 6,101 6,684 13,485
Operating costs (5,870) (5,616) (12,037)
Operating profit before 1 231 1,068 1,448
adjustments
Gains on held for trading 32 12 177
investments
Increase in value of investment – – 2,393
properties
Exceptional items 7 132 124
Share of profit in joint venture 77 70 522
Operating profit 1 347 1,282 4,664
Interest receivable 87 22 76
Interest payable (201) (244) (534)
Profit before taxation 233 1,060 4,206
Income tax expense 2 10 (62) (687)
Profit for the period 243 998 3,519
Profit attributable to equity 276 757 3,256
shareholders
(Loss) profit attributable to (33) 241 263
minority interest
243 998 3,519
Earnings per share 3 2.64p 7.24p 31.15p
Diluted earnings per share 3 2.56p 7.01p 30.19p
Bisichi Mining Plc
Consolidated balance sheet
As at 30 June 2006
Notes 30 June 30 June 31 Dec
2006 2005 2005
£’000 £’000 £’000
Assets
Non-current assets
Value of properties attributable 4 15,607 14,659 15,625
to group
Fair value of head leases 153 343 153
Property 15,760 15,002 15,778
Reserves, plant and equipment 4,430 4,528 5,604
Investments in joint ventures 2,028 1,859 2,519
Other investments 986 376 424
Deferred tax asset 313 219 241
Total non-current assets 23,517 21,984 24,566
Current assets
Inventories 163 161 124
Trade and other receivables 1,965 3,379 4,578
Held for trading investments 662 574 629
Interest derivative 37 81 36
Cash and cash equivalents 3,162 259 488
Total current assets 5,989 4,454 5,855
Total assets 29,506 26,438 30,421
Liabilities
Current liabilities
Borrowings (2,944) (680) (2,382)
Trade and other payables (3,699) (3,961) (4,432)
Current tax liabilities (60) (275) (91)
Total current liabilities (6,703) (4,916) (6,905)
Non-current liabilities
Borrowings (4,319) (5,219) (4,368)
Finance lease liabilities (153) (343) (153)
Deferred tax liabilities (2,523) (2,093) (2,582)
Total non-current liabilities (6,995) (7,655) (7,103)
Total liabilities (13,698) (12,571) (14,008)
Net assets 15,808 13,867 16,413
Equity
Share capital 1,045 1,045 1,045
Other reserves (574) (22) 170
Retained earnings 14,882 12,316 14,606
Total shareholders’ equity 15,353 13,339 15,821
Minority interest in equity 455 528 592
Total equity 15,808 13,867 16,413
Bisichi Mining Plc
Consolidated CASH FLOW STATEMENT
For the six months ended 30 June 2006
30 June 30 June 31 December
2006 2005 2005
£’000 £’000 £’000
Cash flows from operating
activities
Operating profit 347 1,282 4,664
Depreciation 405 349 807
Gain on investments held for – (9) 75
trading
Unrealised gains on investment – – (2,393)
properties
Share of profit from joint (77) (70) (522)
ventures
Hedging (1) 11 82
Share based payment expense 12 11 23
Unrealised gain on investment held (32) 13 (177)
for trading
Decrease (increase) in net current 2,454 (1,551) (228)
assets
Net interest paid (115) (204) (458)
Income tax paid (191) (47) (331)
Cash flows from operating 2,802 (215) 1,542
activities
Cash flows from investing (636) 25 (907)
activities
Cash flow from financing (281) (37) (2,113)
activities
Net increase (decrease) in cash 1,885 (227) (1,478)
and cash equivalents
Cash and cash equivalents at 1 (969) 507 507
January
Exchange adjustment 126 (31) 2
Cash and cash equivalents at 1,042 249 (969)
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 3,162 259 488
Bank overdraft (2,120) (10) (1,457)
Cash and cash equivalents at end 1,042 249 (969)
of period
Bisichi Mining Plc
Consolidated STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2006
Share Translation Other Retained Total Minority Total
reserve earnings
capital reserves interest equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 1,045 141 91 11,559 12,836 334 13,170
2005
Movement on fair value – – – 32 32 – 32
of derivatives
Other income statement – – – 725 725 241 966
movements
Profit for the period – – – 757 757 241 998
Exchange adjustments – (265) – – (265) (47) (312)
Total recognised – (265) – 757 492 194 686
income and expense for
the period
Equity share options – – 11 – 11 – 11
Balance at 30 June 1,045 (124) 102 12,316 13,339 528 13,867
2005
Balance at 1 January 1,045 141 91 11,559 12,836 334 13,170
2005
Revaluation of – – – 2,393 2,393 – 2,393
investment property
Movement on fair value – – – (58) (58) – (58)
of derivatives
Other income statement – – – 921 921 263 1,184
movements
Profit for the year – – – 3,256 3,256 263 3,519
Exchange adjustments – (85) – – (85) (5) (90)
Total recognised – (85) – 3,256 3,171 258 3,429
income and expense for
the year
Dividend – – – (209) (209) – (209)
Equity share options – – 23 – 23 – 23
Balance at 31 December 1,045 56 114 14,606 15,821 592 16,413
2005
Movement on fair value – – – 37 37 – 37
of derivatives
Other income statement – – – 239 239 (33) 206
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
Bisichi Mining Plc
ACOUNTING POLICIES aND NOTES TO ACCOUNTS
The results for the six months ended 30 June 2006 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 2005.
1 SEGMENTAL ANALYSIS 30 June 30 June 31 December
2006 2005 2005
£’000 £’000 £’000
Revenue
Mining 5,556 6,025 12,278
Property 524 539 1,086
Other 21 120 121
__ _
_
6,101 6,684 13,485
__ _
_
Operating profit before
adjustments
Mining 23 823 1,008
Property 198 237 436
Other 10 8 4
__ _
_
231 1,068 1,448
__ _
_
Operating profit
Mining 42 890 1,066
Property 262 395 3,417
Other 43 (3) 181
__ _
_ __
347 1,282 4,664
__ _
_
2 TAXATION 30 June 30 June 31 December
2006 2005 2005
£’000 £’000 £’000
Based on the results for the year:
Corporation tax at 30% (2005: 30%) 45 57 152
Adjustment in respect of prior – – (1)
years -UK
__ _
_ __
Current tax 45 57 151
Deferred tax (55) 5 536
__ _
_ __
Total tax in income statement (10) 62 687
__ _
_ __
3 EARNING PER SHARE
Both the basic and diluted earnings per share calculations are based on a
profit of £276,000 (2005: £757,000). The basic earnings per share have been
calculated on 10,451,506 (2005: 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 (2005: 10,451,506) plus the dilutive
potential ordinary shares arising from share options of 340,055 (2005: 352,471)
totalling 10,791,561 (2005: 10,803,977).
4 PROPERTIES
Properties are included at valuation as at 31 December 2005 plus additions in
the period ended 30 June 2006.
5 FINANCIAL INFORMATION
240 of the The above financial information does not constitute statutory
accounts within the meaning of section Companies Act 1985. Statutory accounts
for the year ended 31 December 2005 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 interim results were approved by the Board of Bisichi Mining PLC on 27
September 2006.
7 POSTING TO SHAREHOLDERS
The interim 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
