Half-yearly Report
31/08/2011 07:00
31 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 Unaudited 6 Audited Year
months ended 30 months ended ended 31
June 30 June 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 (1,649) (346) (2,040)
activities
Increase in value of investment - - 245
properties
Gains on held for trading 3 9 90
investments
Operating loss 1 (1,646) (337) (1,705)
Share of (loss)/profit in (1) - 61
joint ventures
Loss before interest and (1,647) (337) (1,644)
taxation
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
Lossfor the period (1,200) (162) (1,286)
Attributable to:
Equity holders of the (933) (162) (1,212)
company
Non-controlling (267) - (74)
interest
Loss for the period (1,200) (162) (1,286)
Earnings per share - 3 (11.48)p (1.55)p (11.60)p
basic
Earnings per share - 3 (11.48)p (1.55)p (11.60)p
diluted
Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2011
Unaudited 6 Unaudited 6 Audited Year
months ended months ended ended 31
30 June 30 June December
2011 2010 2010
000 000 000
Lossfor the period (1,200) (162) (1,286)
Other comprehensive income:
Exchange differences on translation of (175) 253 747
foreign operations
Other comprehensive income for the (1,375) 91 (539)
period, net of tax
Total comprehensive income for the (1,375) 91 (539)
period
Attributable to:
Equity shareholders (1,092) 91 (459)
Non-controlling interest (283) - (80)
Total comprehensive incomefor the (1,375) 91 (539)
period
Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2011
Unaudited 30 June Unaudited 30 Audited 31
June December
2011 2010 2010
Assets 000 000 000
Non-current-assets
Value of investment 12,110 11,868 12,110
properties attributable
to the group
Fair value of head 227 246 233
leases
Property 12,337 12,114 12,343
Reserves, plant and 9,285 8,597 9,615
equipment
Investments in joint 4,425 3,359 3,607
ventures
Other investments 150 149 150
Total non-current 26,197 24,219 25,715
assets
Current assets
Inventories 811 2,862 705
Trade and other 4,620 6,119 4,719
receivables
Corporation tax 55 41 115
recoverable
Held for trading 899 519 605
investments
Cash and cash 4,848 5,565 5,399
equivalents
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 (9,352) (7,768) (7,865)
payables
Current tax liabilities (409) (13) (362)
Total current (12,848) (10,667) (9,986)
liabilities
Non-current liabilities
Borrowings (5,209) (5,753) (5,326)
Provision for (1,038) (868) (1,025)
rehabilitation
Finance lease (227) (246) (233)
liabilities
Deferred tax (1,546) (2,818) (2,340)
liabilities
Total non-current (8,020) (9,685) (8,924)
liabilities
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 16,451 18,973 17,954
to equity shareholders
Non-controlling 111 - 394
interest
Total equity 16,562 18,973 18,348
Bisichi Mining PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2011
Unaudited Unaudited Audited 31
30 June 30 June 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 (3) (9) (90)
trading
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 decreasein 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 1,045 (685) 480 18,460 19,300 - 19,300
January 2010
Loss for the period - - - (162) (162) - (162)
Other comprehensive - 253 - - 253 - 253
income and expense
Total recognised - 253 - (162) 91 - 91
income and expense
for the period
Dividend - - - (418) (418) - (418)
Balance at 30 June 1,045 (432) 480 17,880 18,973 - 18,973
2010
Balance as at 1 1,045 (685) 480 18,460 19,300 - 19,300
January 2010
Revaluation of - - - 245 245 - 245
investment
properties
Other income - - - (1,457) (1,457) (74) (1,531)
statement movements
Loss for the year - - - (1,212) (1,212) (74) (1,286)
Exchange adjustment - 753 - - 753 (6) 747
Total comprehensive - 753 - (1,212) (459) (80) (539)
income for the year
Dividend - - - (418) (418) - (418)
Equity share - - 5 - 5 - 5
options
Disposal of shares (474) (474) 474 -
in subsidiary
Balance at 31 1,045 68 485 16,356 17,954 394 18,348
December 2010
Loss for the year - - - (933) (933) (267) (1,200)
Exchange adjustment - (159) - - (159) (16) (175)
Total comprehensive - (159) - (933) (1,092) (283) (1,375)
income for the
period
Dividend - - - (418) (418) - (418)
Equity share 7 - 7 7
options
Balance at 30 June 1,045 (91) 492 15,005 16,451 111 16,562
2011
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 Unaudited Audited 31
30 June 30 June 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 (1) - 61
joint ventures
Interest receivable 13 84 174
Interest payable (197) (139) (343)
Lossbefore taxation (1,831) (392) (1,813)
2. Taxation
Based on the results for the period:
Corporation tax at 27% (2010 : 115 21 352
28%)
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
END