REG-Bisichi Plc: Interim Results
23/08/2023 07:45
23 August 2023
BISICHI PLC
Interim Results for the period ended 30 June 2023
For the six months ending 30th June 2023:
* EBITDA 1 : £1.42million (2022:
£22.25million)
* Adjusted EBITDA 2 : £2.17million (2022: £22.24million)
* Profit before tax £0.3million (2022: £21.17million)
* EPS (basic): 3.18p loss (2022: 108.29p)
* The decrease in group earnings in the first half of the year can be
attributed to lower coal prices achievable by Sisonke Coal Processing, the
Group’s South African coal processing operation, as well as difficult mining
conditions at Black Wattle, the Group’s South African mining operation.
* Continued constraints on the South African rail network, adversely impacted
Group mining revenue achieved during the period of £25.1million (H1 2022:
£44.7million).
* Total mining production from Black Wattle of 354,000 metric tonnes compared
to 301,000 metric tonnes in the first half of 2022, and 523,000 in the second
half of that year.
* Black Wattle will open a new lower cost mining area in third quarter of
2023, with mining production expected to improve in the second half of 2023.
* An interim dividend of 3p (H1 2022: 10p) declared.
END
For further information, please call:
Andrew Heller/Garrett Casey Bisichi PLC 020 7415 5030
1 Earnings before Interest, taxation, depreciation and amortisation.
2 Operating profit before depreciation, fair value adjustments and exchange
movements.
Bisichi PLC
Half year review – 30 June 2023
For the six month period ended 30 June 2023, your company made a profit before
interest, tax, depreciation and amortisation (EBITDA) of £1.42million (H1
2022: £22.25 million) and an operating profit before depreciation, fair value
adjustments and exchange movements (Adjusted EBITDA) of £2.17million (H1
2022: £22.24million).
The lower earnings for the Group, compared to the first six months of 2022,
are mainly attributable to lower prices for our coal sold by Sisonke Coal
Processing, the Group’s South African coal processing operation, as well as
difficult mining conditions at our coal mining asset, Black Wattle Colliery.
During 2022, the Group benefited from significantly higher prices of Free on
Board (FOB) coal from Richards Bay Coal Terminal (API4 price). However, during
the first half of 2023, the weekly API4 price averaged US$128 compared to
US$277 in the first half of 2022, and US$270 in the second half of the year.
In addition to the weaker international coal price, constraints in
transporting coal for export on the South African rail network, constraints
which were largely beyond our control, significantly impacted the Group’s
export sales during the period. Due to the lack of available rail capacity,
the Group exported 59,000 metric tonnes in the first half of 2023, compared to
177,000 metric tonnes in the first half of 2022. This in turn had a further
impact on earnings during the period, as coal allocated for export was
eventually sold into the domestic market at prices that were significantly
lower than the export price achievable by rail through Richards Bay. Transnet,
the South African state rail operator, and the wider South African coal
industry, are working hard to implement collectively measures to increase rail
capacity. At this point, we remain optimistic that these measures will, once
implemented, have a significant positive impact on both the export and
domestic prices achievable for our coal.
At Black Wattle, difficult mining conditions impacted profitability during the
period. During the first six months of the year the Group achieved production
of 354,000 metric tonnes, compared to 301,000 metric tonnes in the first half
of 2022 and 523,000 in the second half of the year. Temporary geological
issues reduced the production from our opencast mining area as well as
increasing related mining and blasting costs. In order to mitigate these
issues, the mine will open a lower cost second mining area in the third
quarter of 2023; we expect mining production and costs at Black Wattle to
steadily improve going into the fourth quarter of 2023.
Lower coal production from Black Wattle had a knock-on effect on overall
levels of coal processed at Sisonke Coal Processing during the period, during
which the Group sold 473,000 metric tonnes compared to 614,000 metric tonnes
in the first half of 2022 and 1.29million metric tonnes overall in 2022. The
decrease in the Group’s mining revenue during the period to £25.1million
(H1 2022: £44.7million) can mainly be attributable to the lower prices
achievable for our coal, and the lower overall quantity of coal sold.
Looking forward into the second half of 2023, we will see the benefits, both
in terms of mining cost and production, from the new mining area at Black
Wattle. In addition, we have seen a stabilisation in coal prices in both the
export and domestic market. We remain confident in the Group’s ability to
achieve significant value from our South African operations.
In the UK, we have seen rental revenue from our retail property portfolio
remain stable in the first half of 2023. Overall, the Group billed revenue
from our directly owned property portfolio of £0.54million (H1 2022:
£0.56million) during the first half of the year. The Group continues to hold
its joint venture development investment in West Ealing, with London
Associated Properties PLC and Metroprop Real Estate Ltd. We continue to
explore options to realise the value from the planning consent for 56 flats we
obtained in 2021. We are weighing up the risks and rewards of both a land sale
and building out the site, and are optimistic that a decision to realise the
best value of this site can be taken shortly.
During the period the Group’s total non-current and current listed equity
investments held at fair value through profit and loss remained at similar
levels as at the end of 2022 at £13.5million (H1 2022: £7.6million). The
Group’s dividend income from investments during the period of £0.28million
(H1 2022: £0.15million) helped offset a loss in value from investments of
£0.6million (H1 2022: Gain £0.1million). The Group’s listed investments
continue to comprise primarily listed equities involved in extractive and
energy related business activities, including entities involved in the
extraction of commodities needed for the clean energy transition.
Finally, your directors intend to pay an interim dividend of 3p (2022: 10p)
per share. The dividend will be payable on Friday 2 February 2024 to
shareholders registered at the close of business on 5 January 2024.
On behalf of the Board and shareholders, I would like to thank all of our
staff for their hard work during this period.
Andrew Heller
Executive Chairman & Managing Director
22 August 2023
Bisichi PLC
Consolidated income statement
For the six months ended 30 June 2023
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2023 2022 2022
Notes £000 £000 £000
Group revenue 1 25,883 45,399 95,111
Operating costs (24,668) (23,937) (57,111)
Operating profit on trading activities 1,215 21,462 38,000
Decrease in value of investment properties - - (60)
Gain/(Loss) on investments held at fair value (553) 49 1,036
Operating profit 1 662 21,511 38,976
Share of loss in joint ventures (10) (1) (89)
Profit before interest and taxation 652 21,510 38,887
Interest receivable 124 39 174
Interest payable (477) (383) (1,047)
Profit before taxation 1 299 21,166 38,014
Income tax 2 (165) (5,956) (11,908)
(Loss)/Profit for the period 134 15,210 26,106
Attributable to:
Equity holders of the company (339) 11,562 17,612
Non-controlling interest 473 3,648 8,494
(Loss)/Profit for the period 134 15,210 26,106
Loss/Earnings per share - basic 3 (3.18p) 108.29p 164.96p
Loss/Earnings per share - diluted 3 (3.18p) 103.63p 164.96p
Bisichi PLC
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2023 2022 2022
£000 £000 £000
(Loss)/Profit for the period 134 15,210 26,106
Other comprehensive income/(expenses):
Exchange differences on translation of foreign operations (874) 565 (43)
Taxation - - -
Other comprehensive (loss)/income for the period, net of tax (874) 565 (43)
Total comprehensive (loss)/income for the period (740) 15,775 26,063
Attributable to:
Equity shareholders (938) 12,052 17,593
Non-controlling interest 198 3,723 8,470
Total comprehensive (loss)/income for the period (740) 15,775 26,063
Bisichi PLC
Consolidated Balance Sheet
as at 30 June 2023
Unaudited Unaudited Audited
30 June 2023 30 June 2022 31 December 2022
Assets £000 £000 £000
Non-current-assets
Value of investment properties 10,465 10,525 10,465
Fair value of head leases 170 175 175
Investment property 10,635 10,700 10,635
Mining reserves, plant and equipment 14,195 14,342 16,377
Investments in joint ventures 1,031 1,130 1,041
Deferred tax assets 183
Other investments at fair value through profit and loss (“FVPL”) 12,740 6,418 12,590
Total non-current assets 38,784 32,590 40,634
Current assets
Inventories 4,502 4,188 5,199
Trade and other receivables 5,651 8,820 6,437
Investments in listed securities held at FVPL 779 1,209 886
Cash and cash equivalents 6,468 5,176 10,590
Total current assets 17,400 19,393 23,112
Total assets 56,184 51,983 63,755
Liabilities
Current liabilities
Borrowings (3,556) (3,929) (3,795)
Trade and other payables (9,153) (9,246) (13,282)
Current tax liabilities (4,321) (1,657) (4,256)
Total current liabilities (17,030) (14,832) (21,333)
Non-current liabilities
Borrowings (3,924) (3,903) (3,930)
Provision for rehabilitation (1,475) (1,609) (1,715)
Finance lease liabilities (215) (400) (344)
Deferred tax liabilities - (57) (872)
Total non-current liabilities (5,614) (5,969) (6,861)
Total liabilities (22,644) (20,801) (28,194)
Net assets 33,540 31,182 35,561
Equity
Share capital 1,068 1,068 1,068
Share premium 258 258 258
Translation reserve (3,158) (2,050) (2,559)
Other reserves 1,112 707 1,112
Retained earnings 32,303 28,940 33,923
Total equity attributable to equity shareholders 31,583 28,923 33,802
Non-controlling interest 1,957 2,259 1,759
Total equity 33,540 31,182 35,561
Bisichi PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2023
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£000 £000 £000
Cash flows from operating activities
Operating profit 662 21,511 38,976
Depreciation 764 744 1,093
Unrealised (gain)/loss on investments 553 (49) (1,036)
Unrealised loss on investment properties - - 60
Share based payment expense - - 405
Exchange adjustments 188 37 270
Movement in working capital (3,947) (4,960) (588)
Net interest paid (353) (344) (553)
Income tax (paid)/received (327) (5,554) (7,929)
Cash flow from operating activities (2,460) 11,385 30,698
Cash flows from investing activities (1,649) (8,680) (16,584)
Cash flows from financing activities (513) (1,889) (7,206)
Net increase/(decrease) in cash and cash equivalents (4,622) 816 6,908
Cash and cash equivalents at 1 January 7,365 482 482
Exchange adjustment 177 (51) (25)
Cash and cash equivalents at end of period 2,920 1,247 7,365
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 6,468 5,176 10,590
Bank overdrafts (3,548) (3,929) (3,225)
Cash and cash equivalents at end of period 2,920 1,247 7,365
Bisichi PLC
Consolidated statement of changes in shareholders' equity
For the six months ended 30 June 2023
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 at 1 January 2022 1,068 258 (2,540) - 707 18,019 17,512 323 17,835
Profit for the period - - - - - 11,562 11,562 3,648 15,210
Other comprehensive income and expense - - 490 - - - 490 75 565
Total comprehensive income for the period - - 490 - - 11,562 12,052 3,723 15,755
Dividend - - - - - (641) (641) (1,787) (2,428)
Balance at 30 June 2022 1,068 258 (2,050) - 707 28,940 28,923 2,259 31,182
Balance at 1 January 2022 1,068 258 (2,540) - 707 18,019 17,512 323 17,835
Profit for the year - - - - - 17,612 17,612 8,494 26,106
Other comprehensive income and expense - - (19) - - - (19) (24) (43)
Total comprehensive income for the year - - (19) - - 17,612 17,593 8,470 26,063
Dividend - - - - - (1,708) (1,708) (7,034) (8,742)
Share options cancelled - - - - (142) - (142) - (142)
Share options issued - - - - 547 - 547 - 547
Balance at 31 December 2022 1,068 258 (2,559) - 1,112 33,923 33,802 1,759 35,561
Profit for the year - - - - - (339) (339) 473 134
Other comprehensive income and expense - - (599) - - - (599) (275) (874)
Total comprehensive income for the period - - (599) - - (339) (938) 198 (740)
Dividend - - - - - (1,281) (1,281) - (1,281)
Balance at 30 June 2023 1,068 258 (3,158) - 1,112 32,303 31,583 1,957 33,540
ACCOUNTING POLICIES AND NOTES TO THE
ACCOUNTS:
The results for the six months ended 30 June 2023 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 2022, and which will form
the basis of the 2023 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
2023 2022 2022
£000 £000 £000
Revenue
Mining 25,060 44,692 93,413
Property 543 561 1,108
Other 280 146 590
25,883 45,399 95,111
Operating profit/(loss)
Mining 715 21,055 36,763
Property 221 264 592
Other (274) 192 1,621
662 21,511 38,976
Share of profit in joint ventures (10) (1) (89)
Interest receivable 124 39 174
Interest payable (477) (383) (1,047)
Profit/(Loss) before taxation 299 21,166 38,014
1. Taxation
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£000 £000 £000
Based on the results for the period:
Corporation tax at 27.00% (2022: 27%) 1,015 6,425 11,520
Deferred taxation (850) (469) 388
165 5,956 11,908
1. Earnings/ (loss) per share
Both the basic and diluted earnings per share calculations are based on a
loss of £339,000 (2022: profit of £11,562,000). The basic earnings per share
has been calculated on a weighted average of 10,676,839 (2022: 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 (2022: 10,676,839) plus the dilutive potential ordinary shares
arising from share options of nil (2022: 479,878) totalling 10,676,839 (2022:
11,156,717).
1. Investment properties
Investment properties are held a fair value at each reporting period.
Management evaluate on an ongoing basis the impact of the current economic
performance of the UK Retail market on the future performance of the group’s
existing UK property portfolio. The Directors have placed a valuation on the
properties which is not materially different to the value as at 31 December
2022. Therefore no change in fair value of investment properties has been made
during the period. Investment properties are therefore included at a
Director’s valuation which is considered to be the fair value as at 30 June
2023. Please refer to page 87 to 89 of the 2022 Annual report and Accounts for
details on the valuation of investment and development properties as at 31
December 2022.
1. 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 2022.
The Group paid management fees of £100,000 (30 June 2022: £100,000 December
2022: £200,000) to London & Associated Properties PLC, an associated company.
1. 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 2022 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
Conduct 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
United Kingdom 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 PLC are prepared in accordance
with UK-adopted international accounting standards in conformity with the
requirements of the Companies Act 2006. The same accounting policies are used
for the six months ended 30 June 2023 as were used for the year ended 31
December 2022.
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:
- Life of mine and reserves;
- Depreciation;
- Provision for rehabilitation (relating to environmental
rehabilitation of mining areas);
- Impairment; and
- The valuation of investment and development properties
Property, plant and equipment representing the group’s mining assets in
South Africa are reviewed for impairment where there is evidence of a material
impairment. The impairment test indicated significant headroom as at 31
December 2022 and no impairment was considered appropriate. The directors have
used similar key assumptions and estimates as outlined on page 76 of the 2022
Annual report and Accounts, and no impairment was considered appropriate as at
30 June 2023.
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 2022.
The Group’s contingent liabilities and bank guarantees are referred to in
the Group's 2022 annual financial statements. Black Wattle Colliery (Pty) Ltd
continues to be involved in a tax dispute in South Africa related to Vat. The
dispute arose during the year ended 31 December 2020 and is related to events
which occurred prior to the years ended 31 December 2020. The interpretation
of laws and regulations in South Africa where the Group operates can be
complex and can lead to challenges from or disputes with regulatory
authorities. Such situations often take significant time to resolve. Where
there is a dispute and where a reliable estimate of the potential liability
cannot be made, or where the Group, based on legal advice, considers that it
is improbable that there will be an outflow of economic resources, no
provision is recognised. Further details of the contingent tax liability can
be found on page 107 of the 2022 Annual report and Accounts.
The interim financial statements have been prepared on the going concern
basis. Cashflow forecasts demonstrate that the group has adequate resources to
continue in operational existence for the foreseeable future and is well
placed to manage its business risks.
1. Dividend
The final dividends in respect of 2022, totalling £1,281,000 was approved
by the shareholders at the Annual General Meeting held on the 6th June 2023
and were paid on the 28th July 2023. The final dividends in respect of 2022
are included as a liability in these interim financial statements. A proposed
interim dividend for the year ended 31 December 2023 totalling £320,305
(2022: 1,067,684) was approved by the Board of Directors on 22 August 2023 and
has not been included as a liability in these Interim Financial Statements.
1. Principal risks and uncertainties
The Group has an established risk management process which works within the
corporate governance framework as set out in the 2022 Annual Report and
Accounts. Risks and uncertainties identified by the Group are set out on page
19 to 23 of the 2022 Annual Report & Accounts and are reviewed on an ongoing
basis. There have been no significant changes in the first half of 2023 to the
principle risks and uncertainties as set out in the 2022 Annual Report &
Accounts.
Risks faced by the business are assessed by the Board on an ongoing basis.
Strategies for mitigating the risks have been defined and specific measures
for achieving these are already underway. These include the measures outlined
in the Chairman’s Statement, Mining Review and Financial Review &
Performance sections of the 2022 Annual report and Accounts.
The principal risks as stated in the 2022 Annual Report & Accounts reflect the
challenging environment in which the business operates and are considered
under the following broad headings:
Mining:
- Coal price and volume risk
- Mining risk
- Currency risk
- New reserves and mining permissions
- Power supply risk
- Flooding risk
- Environmental risk
- Health & safety risk
- Climate change risk
- Labour risk
- Cashflow
Property:
- Property valuation risk
1. Board approval
These interim results were approved by the Board of Bisichi PLC on 22 August
2023.
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 19 to 23 of the 2022
Annual Report & Accounts. We do not assume any obligation to update the
forward-looking statements contained in this report.
Andrew Heller
Executive Chairman & Managing Director
22 August 2023
DIRECTORS AND ADVISERS
Directors Andrew R Heller MA, ACA (Executive Chairman & Managing
Director)
Robert Grobler PR Cert
Eng (Mining Director)
Garrett Casey CA (SA) (Finance Director)
Christopher A Joll MA (Non-executive)
John A Sibbald BL (Non-executive)
John Wong ACA, CFA (Non-executive)
John Heller LLB MBA (Non-executive) (appointed 29th March
2023)
Secretary & Registered office Garrett Casey CA (SA)
12
Little Portland Street
London W1W 8BJ
Black Wattle Colliery - Directors Andrew Heller (Managing
Director)
Garrett Casey (Finance Director)
Ethan Dube (Commercial Director)
Robert Grobler (Mining Director)
Millicent Zvarayi
Registrars and transfer office Link Group
Shareholder Services
Central Square
29 Wellington Street
Leeds
LS14DL
UK Telephone: 0371 664 0300
International Telephone: +44 (0) 371 664 0300
(Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. We are open between 09:00 - 17:30, Monday to
Friday excluding public holidays in England and Wales)
Website: www.linkgroup.com
E-mail: shareholderenquiries@linkgroup.co.uk
Company registration number 00112155 (Incorporated in England and
Wales)
Web site
www.bisichi.co.uk
E-mail admin@bisichi.co.uk
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