REG-Bisichi Mining PLC: Half-year Report <Origin Href="QuoteRef">BISI.L</Origin>
31/08/2017 10:05
31 August 2017
BISICHI MINING PLC
Interim Results for the period ended 30 June 2017
For the six months ending 30(th) June 2017:
* Profit before tax £243,000
(2016: £162,000)
* EBITDA 1 : £1.4million
(2016: £1.0million)
* Adjusted EBITDA 2 : £1.4million (2016:
£0.7million)
* EPS (basic): 2.37p
(2016: 1.7p)
* Total production: 582,000 tonnes (2016:
795,000 tonnes)
* Production at Black Wattle impacted by higher than expected seasonal rains
and stone contamination issues
* Majority of new infrastructure improvements to the coal washing plant
completed
* Physical demand for Black Wattle coal remains strong and international and
domestic coal prices have remained stable
* UK property portfolio performing well with voids across the portfolio at
only 1.6% (2016: 2.0%)
END
For further information, please call:
Andrew Heller/Garrett Casey Bisichi Mining PLC
020 7415 5030
1 Earnings before Interest, taxation, depreciation and amortisation.
2 Operating profit before depreciation, fair value adjustments and exchange
movements.
Bisichi Mining PLC
Half year review – 30 June 2017
For the six month period ending on 30 June 2017, Bisichi Mining PLC achieved
earnings before interest, tax, depreciation and amortisation of £1.4million
(2016: £1.0 million).
During the first six months of this year production at Black Wattle, our
direct coal mining asset in South Africa, was impacted by higher than expected
seasonal rains as well as ongoing stone contamination issues at our opencast
areas. Overall, the mine achieved total production of 582,000 metric tonnes
(2016: 795,000 metric tonnes) during the period reported evenly spread between
both quarters. Although this was an improvement on the 466,000 metric tonnes
achieved in the second half of last year, management has planned for further
progress to be made in developing our opencast areas and increasing production
in the second half of the year.
We are pleased to report that the majority of the new infrastructure
improvements to the coal washing plant, as reported to shareholders in our
annual report earlier this year, have now been completed. The new
infrastructure will assist in reducing stone contamination through the washing
plant and will allow Black Wattle to mine at a higher rate of production at
our opencast areas and increase yield.
In terms of markets, the demand for our coal has remained strong and
international and domestic coal prices have continued to remain stable for
most of the first half of 2017. Overall, the increase in group revenue
compared to the same period last year can mainly be attributed to the
appreciation of the Rand against our reporting currency (UK Sterling) as well
as improved coal prices. In turn, the increase in group operating costs
compared to the same period last year can also mainly be attributed to the
appreciation of the Rand against our reporting currency as well as increased
mining costs at our new opencast mining areas.
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.
Looking forward to the rest of this year, management will continue to focus on
improving levels of production at Black Wattle in order to benefit from the
various infrastructure improvements we now have in place.
At present, the Board has no new material information to report in regard to
the acquisition of the Pegasus coal project, the details of which was reported
to shareholders in our Annual report.
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 1.6% (2016: 2.0%). Revenue from our
directly owned property portfolio increased to £0.56million (2016:
£0.53million) during the period reported.
Your directors intend to pay an interim dividend of 1p per share which will be
paid on the 9 February 2018, to shareholders on the register at the close of
business on 5 January 2018.
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
31 August 2017
Bisichi Mining PLC
Consolidated income statement
for the six months ended 30 June 2017
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2017 2016 2016
Notes £000 £000 £000
Group revenue 1 16,732 10,925 22,815
Operating costs (16,283) (10,675) (22,635)
Operating profit/(loss) on trading activities 449 250 180
Increase in value of investment properties - - 445
Increase/(Decrease) in value of other investments - 11 12
Operating profit 1 449 261 637
Share of profit/(loss) in joint ventures 4 (1) (7)
Profit before interest and taxation 453 260 630
Interest receivable 127 124 270
Interest payable (337) (226) (554)
Profit/(Loss) before taxation 1 243 162 346
Income tax 2 (18) (4) 61
Profit/(Loss) for the period 225 158 407
Attributable to:
Equity holders of the company 253 182 479
Non-controlling interest (28) (24) (72)
Profit/(Loss) for the period 225 158 407
Earnings/(Loss) per share - basic 3 2.37p 1.70p 4.48p
Earnings/(Loss) per share - diluted 3 2.37p 1.70p 4.48p
Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2017
Unaudited Unaudited Audited
6 months 6 months ended Year ended
ended
30 June 30 June 31 December
2017 2016 2016
£000 £000 £000
Profit/(Loss) for the period 225 158 407
Other comprehensive income:
Exchange differences on translation of foreign operations 7 490 1,106
Gain/(Loss) on available for sale investments 28 60 193
Taxation (3) (13) (13)
Other comprehensive income for the period, net of tax 32 537 1,286
Total comprehensive income for the period 257 695 1,693
Attributable to:
Equity shareholders 285 669 1,665
Non-controlling interest (28) 26 28
Total comprehensive income for the period 257 695 1,693
Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
Assets £000 £000 £000
Non-current-assets
Value of investment properties 13,265 12,800 13,245
Fair value of head leases 181 186 181
Investment property 13,446 12,986 13,426
Reserves, plant and equipment 8,819 6,319 8,520
Investments in joint ventures 1,326 1,197 1,321
Loan to joint venture 1,398 1,105 1,350
Other investments 46 25 32
Total non-current assets 25,035 21,632 24,649
Current assets
Inventories 842 2,117 1,721
Trade and other receivables 6,163 7,277 7,246
Corporation tax recoverable - - 32
Available for sale investments 779 654 781
Cash and cash equivalents 2,414 2,757 2,444
Total current assets 10,198 12,805 12,224
Total assets 35,233 34,437 36,873
Liabilities
Current liabilities
Borrowings (806) (2,981) (3,358)
Trade and other payables (7,963) (6,179) (6,950)
Current tax liabilities (113) (136) (18)
Total current liabilities (8,882) (9,296) (10,326)
Non-current liabilities
Borrowings (5,887) (5,961) (5,876)
Provision for rehabilitation (1,283) (1,028) (1,236)
Finance lease liabilities (181) (186) (181)
Deferred tax liabilities (2,164) (2,053) (2,248)
Total non-current liabilities (9,515) (9,228) (9,541)
Total liabilities (18,397) (18,157) (19,867)
Net assets 16,836 15,913 17,006
Equity
Share capital 1,068 1,068 1,068
Share premium 258 258 258
Translation reserve (1,744) (2,317) (1,751)
Available for sale reserves 85 (73) 60
Other reserves 683 588 683
Retained earnings 16,165 16,042 16,339
Total equity attributable to equity shareholders 16,515 15,566 16,657
Non-controlling interest 321 347 349
Total equity 16,836 15,913 17,006
Bisichi Mining PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
£000 £000 £000
Cash flows from operating activities
Operating profit 449 261 637
Depreciation 956 736 1,785
Unrealised (gain)/loss on other investments - (11) (12)
Unrealised gain on investment properties - - (445)
Share based payment expense - 14 109
Exchange adjustments 28 (264) (449)
Movement in working capital 2,630 (183) 1,362
Net interest paid (162) (60) (327)
Income tax paid/(received) 23 27 (46)
Cash flow from operating activities 3,924 520 2,614
Cash flows from investing activities (1,258) 378 (1,691)
Cash flows from financing activities (154) (170) (521)
Net increase/(decrease) in cash and cash equivalents 2,512 728 402
Cash and cash equivalents at 1 January (890) (626) (626)
Exchange adjustment (2) (318) (666)
Cash and cash equivalents at end of period 1,620 (216) (890)
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 2,414 2,757 2,444
Bank overdrafts (794) (2,973) (3,334)
Cash and cash equivalents at end of period 1,620 (216) (890)
Bisichi Mining PLC
Consolidated statement of changes in shareholders' equity
for the six months ended 30 June 2017
Share Share Translation Available for sale Other Retained Non- controlling Total
capital premium reserve reserves reserves earnings Total Interest Equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance as at 1 January 2016 1,068 258 (2,757) (120) 574 16,287 15,310 321 15,631
Profit for the period - - - - - 182 182 (24) 158
Other comprehensive income and expense - - 440 47 - - 487 50 537
Total comprehensive income for the period - - 440 47 - 182 669 26 695
Dividend - - - - - (427) (427) - (427)
Equity share options - - - - 14 - 14 - 14
Balance at 30 June 2016 1,068 258 (2,317) (73) 588 16,042 15,566 347 15,913
Balance as at 1 January 2016 1,068 258 (2,757) (120) 574 16,287 15,310 321 15,631
Revaluation of investment properties and impairments - - - - - 331 331 - 331
Other income statement movements - - - - - 148 148 (72) 76
Profit for the year - - - - - 479 479 (72) 407
Other comprehensive income and expense - - 1,006 180 - - 1,186 100 1,286
Total comprehensive income for the year - - 1,006 180 - 479 1,665 28 1,693
Dividend - - - - - (427) (427) - (427)
Equity share options - - - - - - - - -
Share options cancelled - - - - 109 - 109 - 109
Balance at 31 December 2016 1,068 258 (1,751) 60 683 16,339 16,657 349 17,006
Profit for the year - - - - - 253 253 (28) 225
Other comprehensive income and expense - - 7 25 - - 32 - 32
Total comprehensive income for the period - - 7 25 - 253 285 (28) 257
Dividend - - - - - (427) (427) - (427)
Equity share options - - - - - - - - -
Balance at 30 June 2017 1,068 258 (1,744) 85 683 16,165 16,515 321 16,836
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2017 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 2016 and which will form
the basis of the 2017 Annual report.
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
30 June 30 June 31 December
2017 2016 2016
£000 £000 £000
Revenue
Mining 16,160 10,739 21,703
Property 558 530 1,084
Other 14 16 28
16,732 10,925 22,815
Operating profit/(loss)
Mining 68 (73) (581)
Property 368 308 1,181
Other 13 26 37
449 261 637
Share of profit in joint ventures 4 (1) (7)
Interest receivable 127 128 270
Interest payable (337) (226) (554)
Profit/(Loss) before taxation 243 162 346
2. Taxation
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
£000 £000 £000
Based on the results for the period:
Corporation tax at 19.50% (2016: 20.25%) 107 142 70
Prior year adjustment - UK - - -
107 142 70
Deferred taxation (89) (138) (131)
18 4 (61)
3. Earnings/ (loss) per share
Both the basic and diluted earnings per share calculations are based on a
profit of £253,000 (2016: £182,000). The basic earnings per share has been
calculated on a weighted average of 10,676,839 (2016: 10,676,839) ordinary
shares being in issue during the year. The diluted earnings per share has been
calculated on the weighted average number of shares in issue of 10,676,839
(2016: 10,676,839) plus the dilutive potential ordinary shares arising from
share options of nil (2016: nil) totalling 10,676,839 (2016: 10,676,839).
4. Investment properties
Investment properties are included at valuation as at 31 December 2016 plus
additions in the period ended 30 June 2017.
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 2016. The
group paid management fees of £68,750 (30 June 2016: £68,750 31 December
2016: £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 2016 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 2017 as were used for the
year ended 31 December 2016.
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 following new or revised standards that are applicable to the
group were issued but not yet effective:
IFRS 9 – Financial Instruments
IFRS 15 – Revenue from Contracts with Customers.
IFRS 16 – Leases
The largest areas of estimation and uncertainty in the interim financial
statements are in respect of:
* The valuation of investment properties;
* Life of mine and reserves;
* Depreciation;
* Provision for rehabilitation (relating to environmental rehabilitation of
mining areas);
* Impairment and;
* Carrying values of mining joint ventures
Investment properties are not re-valued at the half year end unless there is
evidence of a material change in valuation. There have been no material
changes in fair value during the period. Please refer to page 58 of the 2016
Annual report and Accounts for details on the valuation of investment
properties as at 31 December 2016.
Other areas of estimation and uncertainly are referred to in the group's
annual financial statements. There have been no significant changes to the
basis of accounting of key estimates and judgements as disclosed in the annual
report as at 31 December 2016.
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 2016, totalling £107,000 was paid on the
10(th) of February 2017. The final dividend in respect of 2016, totalling
£320,000 was approved by the shareholders at the Annual General Meeting
held on the 7th June 2017 and was paid on the 28th July 2017. The final
dividend in respect of 2016 is included as a liability in these interim
financial statements.
A proposed interim dividend for the year ended 31 December 2017 totalling
£107,000 was approved by the Board of Directors on 31 August 2017 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 2016 Annual Report and
Accounts. Risks and uncertainties identified by the Group are set out on page
10 of the 2016 Annual Report & Accounts and are reviewed on an ongoing basis.
There have been no significant changes in the first half of 2017 to the
principle risks and uncertainties as set out in the 2016 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 risk
* Mining risk
* Currency risk
* New reserves and mining permissions
* Power supply risk
* Flooding risk
* Environmental risk
* Health & safety risk
* Labour risk
* Cashflow
* Coal qualities
Property:
* Property valuation
9. Board approval
These interim results were approved by the Board of Bisichi Mining on 31
August 2017.
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.
This report contains forward-looking statements. These statements are based on
current estimates and projections of management and currently available
information. Future statements are not guarantees of the future developments
and results outlined therein. Rather, future developments and results are
dependent on a number of factors; they involve various risks and uncertainties
and are based upon assumptions that may not prove to be accurate. Risks and
uncertainties identified by the Group are set out on page 10 of the 2016
Annual Report & Accounts. We do not assume any obligation to update the
forward-looking statements contained in this report.
Michael Heller
Andrew Heller
Chairman
Managing
Director
31 August 2017
DIRECTORS AND
ADVISERS
Directors
Sir 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)
Christopher A Joll MA
(Non-executive)
John A Sibbald MA
(Non-executive)
Secretary &
Garrett Casey
CA(SA)
Registered office
24 Bruton Place
London W1J 6NE
Black Wattle Colliery - Directors Andrew Heller
(Managing Director)
Garrett Casey (Finance
Director)
Robert Grobler (Mining
Director)
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