Interim Results

Anglo Pacific Group PLC 19 September 2002 ANGLO PACIFIC GROUP PLC INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2002 HIGHLIGHTS • Operating Profit up by 67% to £2,843,000 (2001: £1,699,000) • Turnover increased to £3.3million (2001: £2.1million) • Capital Reorganisation completed enabling Board to consider return to dividend • Higher coking coal prices producing strong royalty flows • No borrowings with £4million currently on deposit • Ledmore Marble now sold • Strategic acquisitions in Australia and Canada Anglo Pacific's Executive Chairman, Peter Boycott said:- 'I am pleased to report a strong set of results for the Group. Receipts from our Australian coal mining interests are again at record levels. The Group has made a number of strategic acquisitions in mining projects that have significant potential. With a strong balance sheet the Group continues to look for further acquisitions and intends to pay a dividend ' For further information please contact: Gavin Barry Cardew & Co 020 7930 0777 CHAIRMAN'S STATEMENT I am pleased to report that royalty receipts from our Australian coal mining interests are again at record levels. Our six month operating profit figures have increased by 67% compared to the same period last year. Anglo Pacific has no bank borrowings and currently has cash on deposit of nearly £4 million. The capital reduction of the Company's shares from 10p to 2p was completed on 2nd August 2002 thus eliminating the profit and loss account deficit. The Company is now in a position to pay dividends from profits arising after 1st July 2002. The Company has also recently made a number of strategic acquisitions in mining projects in Australia and Canada and is working closely with the relevant senior management. RESULTS The operating profit for the six months ended 30th June 2002 increased to £2,843,000 (2001 £1,699,000). The retained profit for the period after tax and interest received was £1,979,000 (2001 £1,128,000). Turnover for the six months, excluding discontinued operations, was £3.3 million compared to £2.1 million. OPERATIONS Coal royalties from the two mines in Queensland, Australia, increased to £3.3 million (2001 £1.95 million). The independent valuation of the coal royalty in June 2002,based on a net present value of the pre-tax cashflow discounted at a rate of 7%, was £31.9 million (A$86.9 million) compared to £31.0 million (A$88.1 million) at 31st December 2001. At present the net royalty income is taxed in Australia at a rate of 30%. I am pleased to report that on 1st August 2002 Ledmore Marble was sold for £275,000 cash resulting in a book profit of approximately £75,000 which will be reflected in the second half results. Your Board is extending the Company's talc interests in Shetland at little cost whilst still looking for a joint venture partner or buyer. We are also continuing to expand our coal interests in British Columbia and have recently acquired a 25% interest in the Merritt coal bed methane project. FUTURE The coal royalty cashflows continue to be strong, backed by high coking coal prices and increased efficiencies at the mines operated by BHP and Rio Tinto. The Board is intending to pay a proportion of these cashflows as dividends to shareholders as well as pursuing a more active mining participation strategy in Australia and Canada involving:- • Other royalty and profit sharing cashflows • Strategic acquisitions in mining operations that have significant discovery and increased production potential After the success of our Brancote investment, we continue to work closely with a number of consultant geologists. The Company is also considering further Board and/or consultant appointments to strengthen the mining, operational and technical skills available to management. The Board intends to take advantage of circa 40p per share of tax losses that the Group has available to set off against future gains. Finally, I wish to thank shareholders for their support at the recent AGM which has enabled the Company to reach this new stage in its development. Consolidated Profit and Loss Account for the Six Months Ended 30 June 2002 Year ended Six months Six months 31st ended 30th ended 30th December June 2002 June 2001 2001 £'000 £'000 £'000 Turnover Continuing Operations 3284 2051 4120 Discontinued Operations 123 0 5 3,407 2,051 4,125 Cost of Sales Continuing Operations 0 -126 -210 Discontinued Operations -144 0 0 -144 -126 -210 Gross profit 3,263 1,925 3,915 Continuing Operations Administrative expenses -419 -388 -612 Profit on disposal of investments 0 92 92 Other operating income 46 70 100 Operating Profit from Continuing Operations 2,911 1,699 3,490 Discontinued Operations Administrative expenses -47 0 -118 Operating Loss from Discontinued Operations -68 0 -113 Total Operating Profit 2,843 1,699 3,377 Profit on disposal of Subsidiaries 0 0 229 Interest received / paid 57 -6 38 Write down of assets 0 0 -99 Profit on ordinary activities before tax 2,900 1,693 3,545 Taxation on ordinary activities -921 -576 -1,118 Profit for the financial period 1,979 1,117 2,427 Minority interests 0 11 32 Dividends 0 0 0 Retained profit for the financial period 1,979 1,128 2,459 Earnings per ordinary share 2.27p 1.30p 2.83p Fully diluted earnings per ordinary share 2.22p 1.25p 2.76p Statement of Consolidated Retained Profits Year ended Six months Six months 31st ended 30th ended 30th December June 2002 June 2001 2001 £'000 £'000 £'000 At 1 January - Deficit b/fwd -6,170 -8,629 -8,629 Profit for the period 1,979 1,128 2,459 At 30 June - Deficit c/fwd -4,191 -7,501 -6,170 Consolidated Balance Sheet as at 30 June 2002 30th June 2002 31st December 2001 £'000 £'000 £'000 £'000 Fixed Assets Tangible assets 1,060 1,009 Investments 31,579 30,990 32,639 31,999 Current Assets Stocks 96 121 Debtors 2,217 980 Cash at bank and in hand 2,964 2,212 5,277 3,313 Current Liabilities Taxation -464 -378 Creditors - amounts falling due within one year -312 -157 -776 -535 Net Current Assets 4,501 2,778 Total Assets Less Current Liabilities 37,140 34,777 Creditors - amounts falling due after more than one year Borrowings 0 0 Deferred Tax -575 -217 -575 -217 36,565 34,560 Capital and reserves Share capital 8,696 8,696 Share premium 2,581 2,581 Capital redemption reserve 122 122 Revaluation reserve 29,274 29,274 Foreign currency translation reserve 83 57 Profit and loss account - (deficit) -4,191 -6,170 Equity shareholders' funds 36,565 34,560 Consolidated Cash Flow Statement for the Six Months Ended 30 June 2002 Year ended Six months Six months 31st ended 30th ended 30th December June 2002 June 2001 2001 £'000 £'000 £'000 Net cash inflow from operating activities 1,821 1,847 3,865 Interest received (less paid) 57 -6 38 Overseas tax paid -477 -661 -1,199 Capital expenditure and financial investment -649 -42 109 Disposal of a subsidiary 0 0 56 Equity dividends paid 0 0 0 Net cash inflow before financing 752 1,138 2,869 Net cash (outflow)from financing 0 -601 -852 Increase in cash 752 537 2,017 Reconciliation of Operating Profit to Operating Cash Flow Year ended Six months Six months 31st ended 30th ended 30th December June 2002 June 2001 2001 £'000 £'000 £'000 Operating profit 2,843 1,699 3,377 Minority interest 0 -11 32 Depreciation 22 28 37 (Gain) on sale of tangible fixed assets -13 -92 -92 Net (increase)/decrease in working capital -1,031 223 511 1,821 1,847 3,865 Notes 1. Fixed asset investments The principal components of the fixed asset investments are the Kestrel (formerly Gordonstone) and Crinum royalties. All fixed asset investments are stated either at cost to the Group or at independent valuation. The company commissioned a valuation of the coal royalties in June 2002, based on a net present value of the pre-tax cashflow discounted at a rate of 7%, which produced a valuation of £31.9 million (A$86.9 million), a surplus of £1.0 million over the book amount. At present the net royalty income is taxed in Australia at a rate of 30%. Were the coal royalties to be realised at the revalued amount there are £11.2 million (A$30.4 million) of capital losses potentially available to offset against taxable gains. Neither the revalued amounts nor the related potential tax liabilities are incorporated in the accounts. 2. Basis of preparation These unaudited accounts, which do not constitute statutory accounts have been prepared using accounting policies set out in the Group's 2001 statutory accounts. The financial statements have been subject to a review by the Group's auditors. The 2001 accounts received an unqualified auditor's report and have been delivered to the Registrar of Companies. 3. Earnings per ordinary share The earnings per ordinary share is calculated on the Group's profit after tax of £1,979,000 and 86,962,955 shares. Fully diluted earnings is calculated on a profit after tax of £1,992,000 and 89,707,667 shares. 4. Administrative Expenses Administrative expenses (and operating income) include £45,000 (six months ended 30 June 2001: £48,000; year ended 31 December 2001: £96,000), which is a recharge of rent paid. In addition, provision has been made for costs relating to the reduction of capital. 5. This statement will be sent to shareholders and will be available at the Company's registered office at 29 Albemarle Street, London W1S 4JB. Anglo Pacific Group PLC Independent Review Report Introduction We have been instructed by the company to review the financial information for the six months ended 30 June, 2002 set out on pages 3 to 6. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions, it is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2002. Baker Tilly, Breckenridge House Chartered Accountants 274 Sauchiehall Street 19 September, 2002 Glasgow G2 3EH This information is provided by RNS The company news service from the London Stock Exchange

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