BISICHI MINING - Half-year Report

26 August 2016

BISICHI MINING PLC

Interim Results for the period ended 30 June 2016

For the six months ending 30^th June 2016:

·    EBITDA:                        £1.0million                  (2015: £1.232 million)

·    EPS (basic):                  1.7p                            (2015: 2.56p)  

·    Total production:  795,000 tonnes   (2015: 838,000 tonnes)

·    Planned increase in production from Black Wattle reserves by year end

·    Continuing focus on control of costs and production at Black Wattle Colliery

·    Physical demand for Black Wattle coal remains strong despite low international coal prices

·    UK property portfolio performing well with voids across the portfolio at only 2.0% (2015: 2.3 %.)

END

For further information, please call:

Andrew Heller/Garrett Casey      Bisichi Mining PLC                              020 7415 5030

Bisichi Mining PLC

Half year review – 30 June 2016

For the six month period ending on 30 June 2016, Bisichi Mining PLC achieved earnings before interest, tax, depreciation and amortisation of £1.0 million (2015: £1.2 million).

As part of the production plan for the first half of the year Black Wattle Colliery, our direct coal mining asset in South Africa, continued to supplement production from its own reserves with coal mined at Blue Nightingale under an agreement to purchase Run of Mine coal. This resulted in total production of 795,000 metric tonnes (2015: 838,000 metric tonnes) during the period reported. However, towards the end of this six month period the quality of the coal bought from Blue Nightingale deteriorated as the reserve came to an end; this has had a temporary impact on earnings. In anticipation of the Blue Nightingale reserve coming to an end, management plans were already in place to increase production from Black Wattle’s own reserves. The development of these new opencast areas at Black Wattle will take time to build up production but the mine is expected to reach full production by the end of the year.

The demand for our coal has remained strong but international coal prices have continued to remain low for most of the first half of 2016. Although we have recently seen an improvement in the US Dollar international coal price, a reversal in the depreciation of the South African Rand has partially offset this increase. Overall, the decrease in group revenue compared to the same period last year can mainly be attributed to the depreciation of the Rand against our reporting currency in UK Sterling. Looking forward, we will continue with our existing management strategy of keeping our cost of production low in order to reduce the impact of any further weakness in the international coal price.

Meanwhile, Black Wattle continues to perform well under the Quattro Programme, which allows junior black-economic empowerment coal producers direct access to the coal export market via Richards Bay Coal Terminal. We would like to thank Vunani Limited, our black economic empowered shareholders at Black Wattle, for managing and developing this opportunity.

Looking forward to the rest of this year, management will continue to focus on improving levels of production from our existing reserves at Black Wattle and we remain confident in our ability to achieve significant value from our South African mining operations for many years to come.

Finally, the Company's UK retail property portfolio, which is managed by London & Associated Properties PLC, continues to perform well with voids across the portfolio at the low level of 2.0% (2015: 2.3%).

Your directors intend to pay an interim dividend of 1p per share which will be paid on the 10 February 2017, to shareholders on the register at the close of business on 6 January 2017.

On behalf of the Board we would like to thank all our staff for their hard work during the first six months of the year.

Sir Michael Heller                                 Andrew Heller
Chairman                                                         Managing Director
26 August 2016                                              

Bisichi Mining PLC

Consolidated income statement

for the six months ended 30 June 2016

			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	Year ended
			30 June	30 June	31 December
			2016	2015	2015
		Notes	£000	£000	£000
Group revenue		1	10,925	13,879	25,655
Operating costs			(10,675)	(13,450)	(25,719)
Operating profit/(loss) on trading activities			250	429	(64)
Increase in value of investment properties			-	-	225
Increase/(Decrease) in value of other investments			11	(1)	(11)
Gains on held for trading investments			-	4	-
Operating profit		1	261	428	150
Loss on reclassification of asset held for sale			-	-	(138)
Share of loss in joint ventures			(1)	100	69
Profit before interest and taxation			260	528	81
Interest receivable			128	124	245
Interest payable			(226)	(245)	(473)
Profit/(Loss) before taxation		1	162	407	(147)
Income tax		2	(4)	(87)	(108)
Profit/(Loss) for the period			158	320	(255)
Attributable to:
Equity holders of the company			182	273	(259)
Non-controlling interest			(24)	47	4
Profit/(Loss) for the period			158	320	(255)
Earnings/(Loss) per share - basic		3	1.70p	2.56p	(2.43p)
Earnings/(Loss) per share - diluted		3	1.70p	2.56p	(2.43p)

Bisichi Mining PLC

Consolidated statement of comprehensive income

for the six months ended 30 June 2016

		Unaudited	Unaudited	Audited
		6 months ended	6 months ended	Year ended
		30 June	30 June	31 December
		2016	2015	2015
		£000	£000	£000
Profit/(Loss) for the period		158	320	(255)
Other comprehensive income:
Exchange differences on translation of foreign operations		490	(217)	(1,167)
Gain/(Loss) on available for sale investments		60	(28)	(202)
Taxation		(13)	6	41
Other comprehensive income for the period, net of tax		537	(239)	(1,328)
Total comprehensive income for the period		695	81	(1,583)
Attributable to:
Equity shareholders		669	58	(1,500)
Non-controlling interest		26	23	(83)
Total comprehensive income for the period		695	81	(1,583)

   

Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2016
		Unaudited		Unaudited	Audited
		30 June		30 June	31 December
		2016		2015	2015
Assets		£000		£000	£000
Non-current-assets
	Value of investment properties	12,800		11,620	12,800
	Fair value of head leases	186		195	194
	Investment property	12,986		11,815	12,994
	Reserves, plant and equipment	6,319		6,159	5,374
	Investments in joint ventures	1,197		2,909	1,198
	Loan to joint venture	1,105		1,029	900
	Other investments	25		151	14
	Total non-current assets	21,632		22,063	20,480
Current assets
	Inventories	2,117		1,394	1,049
	Trade and other receivables	7,277		8,496	6,187
	Corporation tax recoverable	-		31	29
	Available for sale investments	654		768	594
	Cash and cash equivalents	2,757		2,789	1,608
	Non-current assets held for sale	-		-	1,168
	Total current assets	12,805		13,478	10,635
Total assets		34,437		35,541	31,115
Liabilities
Current liabilities
	Borrowings	(2,981)		(3,115)	(2,267)
	Trade and other payables	(6,179)		(5,738)	(4,234)
	Current tax liabilities	(136)		(23)	-
	Total current liabilities	(9,296)		(8,876)	(6,501)
Non-current liabilities
	Borrowings	(5,961)		(5,957)	(5,940)
	Provision for rehabilitation	(1,028)		(919)	(847)
	Finance lease liabilities	(186)		(195)	(194)
	Deferred tax liabilities	(2,053)		(2,210)	(2,002)
	Total non-current liabilities	(9,228)		(9,281)	(8,983)
Total liabilities		(18,524)		(18,157)	(15,484)
Net assets		15,913		17,384	15,631
Equity
	Share capital	1,068		1,068	1,068
	Share premium	258		258	258
	Translation reserve	(2,317)		(1,870)	(2,757)
	Available for sale reserves	(73)		19	(120)
	Other reserves	588		663	574
	Retained earnings	16,042		16,819	16,287
	Total equity attributable to equity shareholders		15,566	16,957	15,310
	Non-controlling interest	347		427	321
Total equity		15,913		17,384	15,631

Bisichi Mining PLC

Consolidated Cash Flow Statement

For the six months ended 30 June 2016

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2016	2015	2015
		£000	£000	£000
Cash flows from operating activities
Operating profit		261	428	150
Depreciation		736	704	1,284
Unrealised (gain)/loss on other investments		(11)	1	132
Unrealised gain on investment properties		-	-	(225)
Share based payment expense		14	11	31
Share of profit of joint venture		-	88	-
Movement in working capital		(447)	(865)	607
Net interest paid		(60)	(79)	(248)
Income tax paid/(received)		27	-	-
Cash flow from operating activities		520	288	1,731
Cash flows from investing activities		378	(1,202)	(2,888)
Cash flows from financing activities		(170)	(218)	(584)
Net increase/(decrease) in cash and cash equivalents		728	(1,132)	(1,741)
Cash and cash equivalents at 1 January		(626)	719	719
Exchange adjustment		(318)	95	396
Cash and cash equivalents at end of period		(216)	(318)	(626)
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		2,757	2,789	1,608
Bank overdrafts		(2,973)	(3,107)	(2,234)
Cash and cash equivalents at end of period		(216)	(318)	(626)

Bisichi Mining PLC

Consolidated statement of changes in shareholders' equity

for the six months ended 30 June 2016

	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 as at 1 January 2015	1,068	258	(1,677)	41	652	16,973	17,315	404	17,719
Profit for the period	-	-	-	-	-	273	273	47	320
Other comprehensive income and expense	-	-	(193)	(22)	-	-	(215)	(24)	(239)
Total comprehensive  income  for the period	-	-	(193)	(22)	-	273	58	23	81
Dividend	-	-	-	-	-	(427)	(427)	-	(427)
Equity share options	-	-	-	-	11	-	11	-	11
Balance at 30 June 2015	1,068	258	(1,870)	19	663	16,819	16,957	427	17,384
Balance as at 1 January 2015	1,068	258	(1,677)	41	652	16,973	17,315	404	17,719
Revaluation of investment properties and impairments	-	-	-	-	-	17	17	-	17
Other income statement movements	-	-	-	-	-	(276)	(276)	4	(272)
Loss for the year	-	-	-	-	-	(259)	(259)	4	(255)
Other comprehensive income and expense	-	-	(1,080)	(161)	-	-	(1,241)	(87)	(1,328)
Total comprehensive  income  for the year	-	-	(1,080)	(161)	-	(259)	(1,500)	(83)	(1583)
Dividend	-	-	-	-	-	(427)	(427)	-	(427)
Equity share options	-	-	-	-	31	-	31	-	31
Share options cancelled	-	-	-	-	(109)	-	(109)	-	(109)
Balance at 31 December 2015	1,068	258	(2,757)	(120)	574	16,287	15,310	321	15,631
Profit for the year	-	-	-	-	-	182	182	(24)	158
Other comprehensive income and expense	-	-	440	47	-	-	487	50	537
Total comprehensive  income  for the period	-	-	440	47	-	182	669	26	695
Dividend	-	-	-	-	-	(427)	(427)	-	(427)
Equity share options	-	-	-	-	14	-	14	-	14
Balance at 30 June 2016	1,068	258	(2,317)	(73)	588	16,042	15,566	347	15,913

ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:                                                                                                                                                                     

The results for the six months ended 30 June 2016 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 2015 and which will form the basis of the 2016 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
		2016	2015	2015
		£000	£000	£000
Revenue
Mining		10,739	13,378	24,608
Property		530	488	1,014
Other		16	13	33
		10,925	13,879	25,655
Operating profit/(loss)
Mining		(73)	286	(785)
Property		308	131	915
Other		26	11	20
		261	428	150
Share of profit in joint ventures		(1)	100	69
Interest receivable		128	124	245
Interest payable		(226)	(245)	(473)
Profit/(Loss) before taxation		162	407	(147)

2.    Taxation         

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2015	2014	2014
		£000	£000	£000
Based on the results for the period:
Corporation tax at 20.50% (2015: 20.25%)		142	2	3
Prior year adjustment - UK		-	-	(23)
		142	2	(20)
Deferred taxation		(138)	85	128
		4	87	108

3.   Earnings/ (loss) per share

            Both the basic and diluted earnings per share calculations are based on a profit of £182,000 (2015: £273,000). The basic earnings per share has been calculated on a weighted average of 10,676,839 (2015: 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 (2015: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2015: nil) totalling 10,676,839 (2015: 10,676,839).

4.   Investment properties

            Investment properties are included at valuation as at 31 December 2015 plus additions in the period ended 30 June 2016.

5.   Non-current asset held for sale

On the 11 March 2016, the company disposed of its investment in Langney Shopping centre Unit Trust. The net proceeds from the sale were £1,168,000. At 31 December 2015, the share of the net assets of the trust held by the group were £1,168,000 which included a loss on the reclassification of the asset to held for sale in the amount of £138,000.

6.   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 2015. The group paid management fees of £68,750 (30 June 2015: £68,750 31 December 2015: £137,500) to London & Associated Properties PLC, an associated company.

7.   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 2015 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 Services 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 European Union 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 Mining PLC are prepared in accordance with IFRS as adopted by European Union. The same accounting policies are used for the six months ended 30 June 2016 as were used for the year ended 31 December 2015.

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 following new or revised standards that are applicable to the group were issued but not yet effective:

IFRS 9 – Financial Instruments

IFRS 15 – Revenue from Contracts with Customers.

The largest areas of estimation and uncertainty in the interim financial statements are in respect of:

-    The valuation of investment properties;

-    Life of mine and reserves;

-    Depreciation;

-    Provision for rehabilitation (relating to environmental rehabilitation of mining areas);

-    Impairment and;

-    Carrying values of mining joint ventures

Investment properties are not re-valued at the half year end unless there is evidence of a material change in valuation. There have been no material changes in fair value during the period. Please refer to page 58 of the 2015 Annual report and Accounts for details on the valuation of investment properties as at 31 December 2015.

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 2015.

There is no material seasonal impact on the group's financial performance. Taxes on income in the interim periods are accrued using tax rates expected to be applicable to total annual earnings.

The interim financial statements have been prepared on the going concern basis as the Directors are satisfied the group has adequate resources to continue in operational existence for the foreseeable future.

8.   Dividend

            The interim dividend in respect of 2015, totalling £107,000 was paid on the 5^th of February 2016. The final dividend in respect of 2015, totalling £320,000 was approved  by the shareholders at the Annual General Meeting  held on the 10th June 2016 and was paid on the 29th July 2016. The final dividend in respect of 2015 is included as a liability in these interim financial statements.

A proposed interim dividend for the year ended 31 December 2016 totalling £107,000 was approved by the Board of Directors on 26th August 2016 and has not been included as a liability in these Interim Financial Statements.

9.   Principal risks and uncertainties

            The Group has an established risk management process which works within the corporate governance framework as set out in the 2015 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 10 of the 2015 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2016 to the principle risks and uncertainties as set out in the 2015 Annual Report & Accounts. The principal risks as stated in the accounts reflect the challenging environment in which the business operates and are considered under the following broad headings:

Mining:

-    Coal price

-    Coal washing process

-    Health & safety

-    Currency Risk

-    Coal qualities

-    Currency movements

-    Regulatory requirements & permissions

-    Transport

-    Power supply

-    Flooding

-    Environment

-    Labour

-    Recoverability of investment in new reserves and mining joint ventures

            Property:

-    Property valuation

-    Occupancy

9           Board approval

            These interim results were approved by the Board of Bisichi Mining on 26th August 2016.

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 10 of the 2015 Annual Report & Accounts. We do not assume any obligation to update the forward-looking statements contained in this report.

Michael Heller                                                                                       Andrew Heller  
Chairman                                                                                              Managing Director
26 August 2016             

DIRECTORS AND ADVISERS                                                                   

Directors                                                          Sir Michael A Heller MA, FCA (Chairman)

Andrew R Heller MA, ACA (Managing Director)            

                                                                        Robert Grobler PR Cert Eng (Mining Director)               

                                                                        Garrett Casey CA (SA) (Finance Director)                       

                                                                        Christopher A Joll  MA  (Non-executive)            

                                                                        John A Sibbald  MA (Non-executive)                 

Secretary &                                                       Garrett Casey CA(SA)                                                   

Registered office                                                24 Bruton Place            

                                                                        London W1J 6NE                    

Black Wattle Colliery - Directors                          Andrew Heller (Managing Director)        

                                                                        Garrett Casey (Finance Director)

                                                                        Robert Grobler (Mining Director)          

                                                                        Ethan Dube (Commercial Director)       

Registrars and transfer office                              Capita Asset Services     

                                                                        The Registry     

                                                                        34 Beckenham Road     

                                                                        Beckenham       

                                                                        Kent  BR3 4TU

                                                                        Telephone [phone]          

                                                                        (Calls cost 12p per minute + network extras)       

                                                                        or [phone] for overseas callers

                                                                        Website: www.capitaassetservices.com

                                                                        E-mail: [e-mail]           

Company registration number                             112155 (Incorporated in England and Wales)       

Web site                                                           www.bisichi.co.uk         

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