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Friday 08 August, 2003


Trading Statement

08 August 2003

                                                                   8 August 2003

                                  UK COAL PLC

                              PRE CLOSE STATEMENT

UK COAL is hosting a visit for analysts to some of its operations on Monday and
Tuesday next week, and in-line with best practice is issuing the following
trading statement prior to publication of its interim results, for the 6 months
ended 30 June 2003, on 10 September 2003.

UK COAL sales volumes in the first 6 months were up 3% at 9.9 million tonnes
(2002: 9.6 million tonnes). However, due to competition with international
prices and the strength of sterling, unit income per gj was 6% lower than the
same period last year.

Deep mine production in the period was 7.9 million tonnes (2002: 8.3 million
tonnes). Daw Mill Colliery has continued to make good progress, with output
averaging 35,000 tonnes per week in the first half. The Selby complex continued
to incur losses at similar levels to the first half of last year; but it is
anticipated that the losses will reduce in the second half year as conditions
improve and development costs reduce ahead of the closure scheduled for March
next year.

New flexible working arrangements that will improve efficiency and reduce unit
costs are to be introduced to Maltby Colliery, South Yorkshire on August 17 with
the agreement of mineworkers and supervisory staff.

Applications for Investment Grant aid relating to accessing coal reserves at the
Group's ongoing deep mines, have been submitted to the Department of Trade and
Industry in line with the scheme outlined in the Energy Review White Paper. If
approved, the schemes will access over 100 million tonnes of reserves and help
safeguard nearly 4,000 jobs.

UK surface mine production reduced to 1.8 million tonnes (2002: 2.2 million
tonnes) as some high production sites completed coaling. Securing planning
consents has remained difficult with no new planning permissions being received
in the period. This will impact on output levels in future years.

We have made significant progress in realising the value for the property assets
with sales in the first 6 months of £8.3 million (2001: £1.1 million), although
it is unlikely there will be further significant sales during 2003. We are
continuing to review our strategy to realise the value from our property
portfolio, which was valued last year at £174 million.

In Australia the sales process for Gloucester Coal is continuing with the
distribution of an information memorandum to interested parties. No firm offers
have yet been received.

Overall performance improved in our ongoing deep mines, driven by Project 105
initiatives to reduce unit costs. These gains, together with the benefits to be
derived from our substantial property interests, continue to position UK COAL
for an improved 2003 over the previous year.


Gordon McPhie, Chief Executive                    01302 751 751

Gavin Anderson & Company                          020 7554 1400
Liz Morley
Ken Cronin

Operational:                                      01525 381 759
Stuart Oliver

                      This information is provided by RNS
            The company news service from the London Stock Exchange