Trading Update for FY09
29 January 2010
UK COAL PLC ("UK COAL" or "the Group")
Trading Update for the year ended December 2009
UK COAL today provides its full year trading update in advance of the publication of its preliminary results for the year ended December 2009 in April 2010.
Mining
In line with previous guidance, total production from the Group's mines for the full year ended December 2009 is expected to be around 7.0 million tonnes. As previously announced, our deep mining operations had a difficult final quarter with production expected to be at around 1.2 million tonnes (Q4 2008: 1.8 million tonnes), leading to production at the Group's Deep Mines for the full year of around 5.65 million tonnes. Production at our Surface Mines in the final quarter was around 0.35 million tonnes (Q4 2008: 0.57 million tonnes), giving Surface Mines' full year output of around 1.35 million tonnes (2008: 1.7 million tonnes).
Production figures for the individual operations for the full year ended December 2009 are expected to be as follows:
|
|
2009 |
2008 |
|
|
m tonnes |
m tonnes |
|
Daw Mill |
2.9 |
3.2 |
|
Kellingley |
1.0 |
1.2 |
|
Thoresby |
0.8 |
0.9 |
|
Welbeck |
1.0 |
0.9 |
|
Total Deep Mines |
5.7 |
6.2 |
|
Surface Mines |
1.3 |
1.7 |
|
Total Production |
7.0 |
7.9 |
Revenue for the Group for the full year ended December 2009 is expected to be around £317 million (2008: £393 million) with a realised sales price for coal of around £1.87 per Gigajoule ("GJ"), within the previously announced expected range of £1.85 to £1.90/GJ, although slightly lower than the £1.92/GJ achieved in 2008. Overall Group revenue in part reflected reduced despatches during the tail end of 2009 from our Daw Mill colliery which is cutting through a section of panel with a higher than usual proportion of dirt. While Daw Mill continues to cut through this panel in the New Year, this output will be blended away and sold with normal Daw Mill output once production in the new panel commences.
The Group invested significantly in improving its production development bank during 2009 with driveage in the year of around 19.8 km (2008: 17.1 km). Excluding Welbeck, which ceased development activities in 2009 in advance of its closure in 2010, the three ongoing deep mines increased development metreage by 38% to 18.5 km (2008 13.4 km) with increases in all three mines.
Property
There has been significant planning progress across our development portfolio in 2009, including planning applications for some 2,000 new homes and 114,000 sqmt of employment space. The majority of this is still being progressed in negotiation, with Planning Committee resolutions approving 332 new homes and 4,645 sqmt of employment space received as at the year end. In addition, planning consent was received during the final quarter of the year for an 18 hole golf course, clubhouse and 50 bedroom hotel at Tetron Point, Swadlincote, Derbyshire. Representations to local authorities, promoting residential and commercial development under the various local development plans, were made in respect of a further 5,250 new homes and over 200,000 sqmt of employment space.
Moreover, since the year end, on 25 January 2010, the Planning Board of Rotherham Metropolitan Borough Council resolved to grant planning consent (subject to pre-agreed Section 106 Agreements) for our new residential community at Waverley of around 3,900 homes and 15,300 sqmt of employment space and gave a similar resolution to approve our Government Campus project in association with Helical Governetz on an adjoining site containing 64,500 sqmt of office space. Both applications, being departures from the historic Unitary Development Plan covering the site, will now be referred to the Government Office for confirmation that the local authority may issue the consents without further inquiry.
As a result of both the planning successes referred to above and some greater stability in property market values, we are expecting to report in the income statement an increase of around £11 million in the valuation of the Group's property portfolio in the second half of 2009. It is expected this will result in a total RICS valuation for the Group's properties, as at December 2009, of around £394 million compared to £422 million at December 2008 and £382 million at June 2009. Taking into account expenditure on the estate and a small number of disposals we expect the income statement to reflect a total downward valuation movement for 2009 of £26 million.
Overall
The Group's overall operating loss for the full year ended December 2009, including the Group's share of the results of its joint ventures, is expected to be around £65 million (2008: £0.7 million loss) with an overall loss before taxation and exceptional items for the year ended December 2009, including the non-cash reduction in property valuation, at around £115 million (2008: £15.7 million).
Net Borrowings
Overall net debt (excluding restricted cash balances) at December 2009 was slightly better than expectations at circa £180 million (December 2008: £137 million). Within the above net debt figure, generator loans and prepayments at December 2009 totalled around £65 million (2008 £nil), lower than originally anticipated following a shortfall in production and certain specific development targets in the year, which are expected to be made up in 2010, and upon which certain receipts were conditional.
Update for 2010
The expected available-for-start dates for production from the new faces at Kellingley and Thoresby remain unchanged at around late February and mid March, respectively.
At Daw Mill, as previously reported, preparation for production at the new face has been hindered by the difficult geological conditions on the face line itself. The powered roof installation, mentioned in our announcement of 6 January 2009, is resolving these issues, though the start of production on the new face is now expected towards the end of March rather than around the end of February.
We have the potential to open up to five new surface mines during the year, with planning permissions being sought to extend our future surface mines programme. In order to reduce pre-coaling expenditure and expand our longer-term surface mining production capability, we are considering outsourcing some aspects of these operations. This may result in a delay to the start of operations at some currently earlier scheduled sites.
We remain focussed on getting the new Daw Mill face into production and maximising output from the other deep mines until their new faces are available and, in the case of Welbeck, its closure. We have also identified a number of actions which are being implemented to address the impact on working capital of the later new Daw Mill face start.
Board appointment - Director of Mining
Following our announcement on 6th January 2010, we are pleased to confirm that Gareth Williams, will be taking up his seat on the Board as Director of Mining on 15 February 2010.
For further information please contact:
Media:
|
Anthony Carlisle, Citigate Dewe Rogerson |
Tel: +44 (0) 20 7638 9571 Mobile: +44 (0)7973 611 888 |
Analysts and investors:
|
Jon Lloyd (Chief Executive, UK COAL) |
Tel: +44 (0) 1302 755 002 |
|
David Brocksom (Finance Director, UK COAL) |
Tel: +44 (0) 1302 755 013 |
|
|
|
|
Nick Cox-Johnson, Citigate Dewe Rogerson |
Tel: +44 (0) 20 7638 9571 |
This information is provided by RNS
Latest directors dealings
- 9 hours ago Savannah Energy
- 10 hours ago Buccaneer Energy PLC
- 10 hours ago Savannah Energy
- 11 hours ago Carclo
- 11 hours ago Schroder Japan Growth Fund