RNS Number:3299Y
ATH Resources plc
14 June 2007
Press Release 14 June 2007
ATH Resources plc
("ATH Resources" or "the Group")
Interim Results
ATH Resources plc, one of the UK's largest coal producers, reports its Interim
Results for the six months ended 1 April 2007.
Highlights
* Turnover up 35% to #31.2 million (2006: 23.1 million) on sales of
973,000 tonnes of coal (2006: 790,000 tonnes)
* Cash from operations up 89% to #10.1 million (2006: #5.3 million)
* Profit before tax up 19% to #2.3 million (2006: restated #1.9 million)
* Earnings per share up 18% to 3.9p (2006: restated 3.3p)
* Interim dividend of 3.36p per share proposed
* December 2006: Planning application submitted for extension to the
Grievehill mine for 970,000 tonnes
* March 2007: Inauguration of the Group's overland conveyor, the longest
of its kind in Europe
* Acquired #2.3 million development property at Pinxton, Derbyshire to
facilitate the Langton tip washing project for ATH Regeneration
* Additional 600,000 tonnes of reserves added, with potential for up
to a further 800,000 tonnes, at Rigg located close to the existing
mine at Glenmuckloch
Commenting on the Interim Results, Tom Allchurch, Chief Executive of ATH
Resources, said:
"These strong results reflect the continued high level of activity and
development seen at ATH over the past six months. During the period we
commissioned the Group's new conveyor, the longest of its kind in Europe, and
significantly increased our reserves. ATH Ogden, the land regeneration and
coal tip washing business, has been re-branded to ATH Regeneration, and is now
fully integrated into the Group with a healthy pipeline of prospective new
projects developing.
"We remain dedicated to delivering on our strategic plan of growing organically
and by acquisition. We look forward to strengthening our performance as both
the market leader in the washing and regeneration of coal sites, and the second
largest surface mining business in the UK."
- Ends -
For further information:
ATH Resources
Tom Allchurch, Chief Executive Tel: +44 (0) 1302 760462
tom@ath.co.uk www.ath.co.uk
Seymour Pierce Limited
Sarah Wharry, Corporate Finance Tel: +44 (0) 20 7107 8000
sarahwharry@seymourpierce.com www.seymourpierce.com
Media enquiries:
Abchurch
Charlie Jack/Georgina Bonham Tel: +44 (0) 20 7398 7715
georgina.bonham@abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
These results continue the trend of recent years reflecting another period of
strong growth over the past six months. Turnover is up by more than a third
with operating cash flow nearly doubling and reserves added in the period of
more than 1.6 times production. This was achieved in a period which saw the
opening up of new mines and the commissioning of the Group's new conveyor, the
longest of its kind in Europe.
Trading Results
In the six months to 31 March 2007, turnover grew by 35% to #31.2 million (2006:
#23.1 million) with sales of 973,000 tonnes (2006: 790,000 tonnes).
Profit before tax is #2.3 million (2006: restated #1.9 million) with cash from
operations of #10.1 million (2006: #5.3 million). Earnings per share is 3.9p
(2006: restated 3.3p) and the Board is proposing an unchanged interim dividend
of 3.36p per share, payable to members on the register as at 29 June 2007 on 20
July 2007.
Performance of the five operational mines including the opening of the new sites
at Glenmuckloch and Laigh Glenmuir was satisfactory despite two to three months
of exceptionally wet weather at the end of 2006. Good cost control and the
efficiency of the relatively new plant fleet contributed to the delivery of a
solid result.
During the period, the Group commissioned the full length of its 12km conveyor
linking the site at Glenmuckloch, to the railhead at Crowbandsgate, along with a
further 4km from Laigh Glenmuir.
The land regeneration and coal tip washing business, rebranded as ATH
Regeneration, continues to perform ahead of expectations and is now fully
integrated within the wider organisation. In March 2007, a development site at
Pinxton in Derbyshire was acquired to facilitate the washing of the proposed
site at Langton. The preparation of relevant planning proposals is now underway.
Significant growth in ATH Regeneration is planned and the number of prospective
new projects is growing.
Development
Investment last year in the Group's development team continues to produce a
longer term sustainable business. An additional 1.6 million tonnes, subject to
planning consent, was added to coal reserves through a further extension at our
Grievehill site (970,000 tonnes) and at Rigg (600,000 tonnes) close to the site
at Glenmuckloch. This means, after allowing for production, our current reserves
now stand at 8.5 million tonnes*, an increase of 8% over the six month period.
The appeal process for the Muir Dean project has progressed satisfactorily with
confidence in the outcome remaining high. The decision is expected towards the
end of 2007.
Outlook
The Group's strategy continues to be one of growing both organically and by
acquisition to achieve a leading position in ATH's chosen areas of activity. The
Group is already the market leader in the washing and regeneration of coal sites
and is the second largest surface mining business in the UK - a position which
the Group hopes to build on.
The market for coal remains strong - 2006 was the highest coal burn for
electricity generation in the UK since 1995 with record levels of imports.
Volumes of coal burn and imports are likely to fall back in 2007 due to milder
weather and lower gas prices but the international price for coal has continued
to be robust. There is an overwhelming case for the production of indigenous
coal for electricity and confidence is high that the Group can play a key role
in the future development of the industry.
David Port
Non-executive Chairman
14 June 2007
* The information in this report relating to exploration results, mineral
resources or mineral reserves is based on information compiled by Mr Peter
Morgan a full time employee of the company, who is a fellow of the Institute of
Materials, Minerals and Mining. Mr Morgan has sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration.
He has reviewed and consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears. A glossary of
terms is available on our website - www.ath.co.uk.
Consolidated profit and loss account
for the six months ended 1 April 2007
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
Restated Restated
Notes # # #
Turnover 31,231,271 23,123,864 54,126,092
Cost of sales (23,441,965) (18,587,943) (40,470,375)
Gross profit 7,789,306 4,535,921 13,655,717
Administrative expenses (4,582,292) (2,321,211) (5,575,005)
Other operating income 22,195 13,854 18,109
Operating profit 3,229,209 2,228,564 8,098,821
Profit on disposal of fixed assets 10,959 54,264 28,151
Profit on ordinary activities before interest 3,240,168 2,282,828 8,126,972
Interest receivable 14,760 - 65,424
Interest payable and similar charges (993,893) (380,255) (1,049,563)
Profit on ordinary activities before taxation 2,261,035 1,902,573 7,142,833
Taxation on profit on ordinary activities (723,531) (600,653) (2,470,378)
Profit on ordinary activities after taxation 1,537,504 1,301,920 4,672,455
Dividends paid (3,131,843) (3,000,834) (4,334,538)
Retained (loss)/profit for the period (1,594,339) (1,698,914) 337,917
Basic earnings per share 2 3.87p 3.28p 11.77p
Diluted earnings per share 2 3.82p 3.28p 11.61p
The profit on ordinary activities before taxation arises from the Group's
continuing operations.
There are no recognised gains and losses other than as stated in the profit and
loss account.
Consolidated balance sheet
as at 1 April 2007
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
Restated Restated
# # #
Fixed assets
Goodwill 6,970,688 1,511,972 7,169,554
Tangible fixed assets 69,170,779 47,866,036 65,143,153
Investments 501 1 501
76,141,968 49,378,009 72,313,208
Current assets
Stocks 7,620,958 8,533,864 6,762,206
Debtors 9,331,194 9,035,779 8,795,546
16,952,152 17,569,643 15,557,752
Creditors: amounts falling due within one year (33,193,434) (16,753,200) (28,554,586)
Net current (liabilities)/assets (16,241,282) 816,443 (12,996,834)
Total assets less current liabilities 59,900,686 50,194,452 59,316,374
Creditors: amounts falling due after more than one (17,666,257) (12,934,331) (16,601,748)
year
Provisions for liabilities and charges (13,591,167) (9,514,051) (12,692,025)
Net assets 28,643,262 27,746,070 30,022,601
Capital and reserves
Called up share capital 198,468 198,468 198,468
Share premium account 27,341,084 27,341,084 27,341,084
Profit and loss account 35,859 (406,333) 1,630,198
FRS 20 reserve 1,067,851 612,851 852,851
Equity shareholders' funds 28,643,262 27,746,070 30,022,601
Consolidated cash flow statement
for the six months ended 1 April 2007
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
Notes # # #
Net cash from operating activities 3 10,058,980 5,324,613 17,601,108
Returns on investment and servicing of finance
Interest received 14,760 - 65,424
Interest paid (431,389) (82,763) (423,332)
Interest element of finance leases (562,504) (297,492) (626,231)
(979,133) (380,255) (984,139)
Taxation paid (4,226,610) - (640,781)
Capital expenditure
Payments to acquire tangible fixed assets (4,983,936) (839,233) (7,838,182)
Receipts from sales of tangible fixed assets 350,201 192,000 376,286
Acquisition
Cash acquired with subsidiary - - 22,321,143
Purchase of business (707,862) - (25,944,052)
(5,341,597) (647,233) (11,084,805)
Equity dividends paid (3,131,843) (3,000,834) (4,334,538)
Cash flow before financing (3,620,203) 1,296,291 556,845
Financing
New secured loan 1,602,090 - 5,500,000
Repayment of secured loans (724,031) (57,455) (1,793,239)
Capital element of finance lease payments (4,567,652) (2,393,226) (5,459,931)
(3,689,593) (2,450,681) (1,753,170)
Decrease in cash 5 (7,309,796) (1,154,390) (1,196,325)
Notes to the interim report
for the six months ended 1 April 2007
1. Preparation of unaudited interim report
The unaudited interim report has been prepared on the basis of the accounting
policies set out in the Group's 1 October 2006 statutory financial statements
other than the adoption of FRS20 'Share-based Payment' as set out below. The
interim report was approved by the Board of Directors on 13 June 2007. The
figures for the period ended 1 October 2006 have been extracted from the
financial statements for that year which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain any statement under Section 237 (2) or (3) of the Companies
act 1985.
The Group has drawn up its accounts for the 26 week period ended 1 April 2007
(2006: 26 weeks to 2 April 2006).
During the period the Group adopted FRS 20 'Share-based Payment'. The adoption
of this standard constitutes a change in accounting policy and therefore the
impact has been reflected as a prior year adjustment in accordance with FRS 3 '
Reporting Financial Performance'.
The standard requires that where shares or rights to shares are granted to third
parties, including employees, a charge should be recognised in the profit and
loss account based on the fair value of the shares at the date the grant of
shares or right to shares is made. The Company operates share option schemes for
senior executives which are required under the standard to be valued and charged
against profit.
The effect of the adoption of FRS 20 on prior year comparatives is to reduce
Operating profit by #240,000 in the six months to 2 April 2006 and #480,000 in
the year to 1 October 2006. Operating profit in the six months to 1 April 2007
is reduced by #215,000.
A corresponding reserve is created in the balance sheet - FRS 20 Reserve - which
is a distributable reserve. In addition, a deferred tax credit is recognised in
the profit and loss account to reflect tax relief available when the options are
exercised. The impact on net assets is an increase of #320,355, #183,855 and
#255,855 for the periods ended 1 April 2007, 2 April 2006 and 1 October 2006
respectively.
The restatement for the year ended 1 October 2006 is unaudited and the six
months results for both years are unaudited.
No provision has been made in the accounts to date for any change relating to
the two Long Term Investment Plans (LTIP's) which certain directors participate
in. If the performance and other criteria are satisfied under the LTIP's the
maximum charge, in aggregate, against profit over the periods to vesting of the
awards in 2009 and 2010 is #2.2 million.
2. Earnings per share
Basic earnings per share is calculated by reference to the weighted average
number of ordinary shares in issue during the period of 39,693,568 (2 April
2006: 39,693,568; 1 October 2006: 39,693,568) and the profit after taxation. The
diluted earnings per share takes account of share options outstanding to
employees as set out below:
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
Restated Restated
Number Number Number
Weighted average number of shares in issue 39,693,568 39,693,568 39,693,568
Weighted average number of dilutive share options 550,714 - 550,714
Total number of shares for calculating diluted earnings
per share 40,244,282 39,693,568 40,244,282
3. Reconciliation of operating profit to operating cash flows
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
Restated Restated
# # #
Operating profit 3,229,209 2,228,564 8,098,821
Depreciation charge 6,929,396 5,663,714 10,620,179
Charge for share-based payments 215,000 240,000 480,000
Increase in stock (858,752) (3,262,270) (746,290)
Decrease/(increase) in debtors (1,025,648) (864,662) 2,118,021
(Decrease)/increase in creditors and provisions 1,569,775 1,319,267 (2,969,623)
Net cash inflow from operating activities 10,058,980 5,324,613 17,601,108
4. Analysis of net debt
Unaudited Unaudited
as at as at
1 October Cash Non-cash 1 April
2006 flow changes 2007
# # # #
Cash at bank (2,837,555) (7,309,796) (10,147,351)
Debt due within one year (4,172,000) (112,038) (4,284,038)
Debt due beyond one year (510,485) (766,021) (1,276,506)
Finance leases and hire purchase contracts (23,928,807) 4,567,652 (4,630,600) (23,991,755)
(31,448,847) (3,620,203) (4,630,600) (39,699,650)
5. Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Unaudited
six months six months year
ended ended ended
1 April 2 April 1 October
2007 2006 2006
# # #
Decrease in cash in the period (7,309,796) (1,154,390) (1,196,325)
Cash inflow from increase in debt and lease financing 3,689,593 2,450,681 1,753,170
Change in net debt resulting from cash flow (3,620,203) 1,296,291 556,845
New finance leases and hire purchase contracts (4,630,600) (8,388,229) (17,705,074)
Movement in net debt in the period (8,250,803) (7,091,938) (17,148,229)
Net debt brought forward (31,448,847) (14,300,618) (14,300,618)
Net debt carried forward (39,699,650) (21,392,556) (31,448,847)
6. Copies of the interim report
Copies of the interim report will be posted to shareholders in due course and
are available from the Company's Head Office at: Aardvark House, Sidings Court,
Doncaster DN4 5NU or by visiting the Company's website www.ath.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
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