UK Coal Share Discussion Threads

[beeks of arabia] 18/3/2012 18:51

Don't sulk Daz.

[dazzaa] 18/3/2012 17:43

It's certainly clear that the Directors hold very very few shares in this company and have not as the price declined bought therefore saying ? to improve things maybe another COE and new blood is needed but there again TSr of Arabia would have a view,sober or not!!

Dazzaa

[kalkanite] 18/3/2012 17:19

From the Guardian article on Wed ......



"Jeffrey Wood, the UDM's president, struck a conciliatory note and said he hoped miners could work through the geological disturbance on a new coal face – dirt and loose mud which is forcing them to build a timber structure to make the pit safe – within the next month"

We know that the current 303s face is producing half of the 40,000 tonnes/week that management was expecting; the "new" face must be the 32s which if producing alongside the 303s could push production to a healthy output.

We can only hope that the work force & management can find common grounds in which Daw Mill can become the coal producer that it has promised to be in the past, beyond the end of 2013.

There have been two new broker upgrades since the recent "business restructuring" announcement......



Numis Securities has pretax profit of £32.7m & EPS of 10.9p

Whilst Milkstone has PTP of£27m & EPS of 7.2p

This gives forward PEs of around 2 & 3, (not allowing for the "possible dilution").

Whilst the dangers have been highlighted recently, these are interesting times. Shareholders have suffered a great deal in the last few years with very little information from management being available, it would be good if the UKC website could give up to date production figures, coal prices and update us on new coal face progress. Some of the content on the website is really out of date, very poor for a company of this size.

K

[dazzaa] 18/3/2012 10:46

I'm glad you have a job but it's obviously not in PR, TSr.

[thelongandtheshortandthetall] 17/3/2012 22:22

dazza
can you help me and tell me how you came to £350 million pound for property?
Cheers mate

might as well start my research into ukc.

had it on watch for a while

[dazzaa] 17/3/2012 21:43

Well thanks!!

I have it now that the property portfolio is worth around £350 million

Is this a closed shop here or can a new person enter your thread and get help from old hands?

[dazzaa] 16/3/2012 15:49

I'm thinking about investing, is the share likely to fall much further, somewhat of a rise today or is to early to call?

What is the value of the property portfolio.

Thanks

[m w] 16/3/2012 13:58

l haved worked at the face in the past for some years and 75k sounds about right, its very hard work and i stayed with it until my house was paid for, would never go back

[oldtown] 16/3/2012 10:05

You would really have to be a A class tw@t to attack the hard workers miners going under group risking their life,some for less than 25k per year, whilst at the same time saying nothing about the obscene wages paid to the hopeless Board for their continued shareholder equity destruction.

spob, step forward and take a bow!

Oh by the way a vast percentage of the workforce is polish.

[warrabish] 15/3/2012 20:33

Underground U1 which is the highest grade a workman can achieve provides about 25k basic for a standard working week. Some of the figures being floated about really have made me chuckle. 70k a year? We wish.

[wad collector] 15/3/2012 19:59

Holy Moses , I haven't looked here for a while ; made a 4 bagger on this a decade or so ago then sold out too early.No consolation to todays holders , but a reminder to me not to be too greedy sometimes.
Hope you get some of your money back.

[envirovision] 15/3/2012 11:44

I wonder if the cost of labour was a factor in the demise of Daw mill. I was astonished to read in the FT today that a guy who operates the loco and lift gear to bring the staff up and down in the mine get 70K per year and can get overtime on top of this. Christ knows what those right at the face and the hand drillers/blasters are on but I can imagine some who've been there for several years may well be millionairs now.

[leadersoffice] 15/3/2012 09:30

what a bag of cold sick.
Threee or fours ago we were £5 odd , I was shouting from the rooftops saying its all in the property,now look at us... are we gonna be wiped out ere?

[castleford tiger] 14/3/2012 18:32

Big K gas problem and shut down last weekend?

Can we have that confirmed please?
Tiger

[jacks13] 14/3/2012 15:07

A big danger to the Company's survival would be if the Bank required that further lending and the extension of existing borrowing facilities be secured against their property assets. UK Coal have relied on the property portfolio to support a loss making deep mine operation for a few years now. If their ability to manage that portfolio is compromised it could cause further problems.

If you take Daw Mill's potential earnings out of the equation can the remaining mining operations support its own costs? The property portfolio needs now to take centre stage but the Bank may take 'ownership' of that.

What do Peel make of all this I wonder?

[muckshifter] 14/3/2012 14:19

Looks like I was two months early with my prediction about Daw Mill on January 17th, but it has been, and is, IMHO, inevitable that DM will close soon.

I hope we get some success elsewhere in the company soon.
Regards.

[kalkanite] 14/3/2012 13:21

I,m trying to make sense of the latest announcement, however it raises more questions than answers.

UK Coal plc today announces plans to restructure the business and to start consultation over the future of its Daw Mill mine. The Board believes that this restructuring will provide a stable platform in the medium term for the group's mining and property businesses and will achieve the best value in the group for its stakeholders.

OK, personally I see this as an overall plan which has been on the agenda since the roll out of the 3 year plan last year. I think that there is a danger here of thinking that it is simply a Daw Mill problem but it is not as simple as that. Daw Mill was the cheapest deep mine producer for UKC in H2 last year per tonne of coal, however that has changed recently as a result of the Dec/Jan face gap.

The principal objectives of the restructuring plan are to ensure a financial framework that is capable of supporting ongoing investment in each deep mine over its remaining economic life and to address the risks and volatility inherent in the mining industry.

Yep pretty straight forward!


The plan is intended to isolate the operating risk of each deep mine from the group as a whole and mitigate future financial uncertainty arising from operations at Daw Mill.

Is it possible to isolate the operating risk while still part of UKC? Or is the plan to have the mines as a seperate company owned by UKC but not financially reponsible (if that is possible). Again Daw Mill is singled out.


The Company has today commenced consultation on the potential closure of Daw Mill by early 2014 at the point when current and largely-developed coal panels will have been mined. The Company has suspended developments for exploitation beyond the end of 2013 but retains the option to resume developments, re-open the mine or extend its life, to exploit the mines considerable long-term resources. This would only happen under a lower risk operating model.



Although UK Coal's other mines are performing broadly in line with expectations, production at Daw Mill is around 175,000 tonnes behind budget. To achieve UK Coal's plans for 2012, Daw Mill needs safely to increase production to target levels on its 303s coalface by May and to recover and resume production on the 32s coalface. Intrusive intervention since January 2012 has continued to identify material opportunities for improvement. New managers and leaders for each coal face have been appointed under the personal leadership of Managing Director of Mining, Gareth Williams.

"Intrusive intervention since January 2012 has continued to identify material opportunities for improvement" Now I think we may be getting to the heart of why Daw Mill is being singled out. Mining is a centuries old development, I therefore don't see this as a eureka moment, rather as frustration at the work force and unions resistance to more productive changes to working patterns/strategies. I think JC is quite rightly saying buck up or you will have no job left by the end of next year.

UK Coal has initiated preliminary consultation with key stakeholders to test support for these structural changes. These stakeholders include the pension trustees, our bankers, the Department of Energy and Climate Change, the Coal Authority and our power generator customers. All stakeholders have approached the discussions constructively and the Board believes these parties will support the Company's restructuring initiative. The Company has also been in helpful discussions with the Pensions Regulator.

If the restructuring plan is successfully implemented in the interest of securing a more stable platform for the Company, shareholders may face dilution of their holdings.

The Company has entered into a collaborative and constructive process with its principal banking partner, Lloyds Banking Group, and is exploring the options available to address the funding requirements of the Group in light of the possible structural changes. The Company is confident that renewed facilities to 31 December 2013 will be agreed with Lloyds Banking Group, who remain supportive of the current process.

This could be possible confirmation as to splitting of the mining into a seperate holdings? It will certainly give the unions notice of its intentions.

All my own thoughts, but then again WTFDIK!

The Board expects to publish its 2011 audited accounts towards the end of April 2012.

The Board will make a further announcement when appropriate.

Any comments welcomed.

K

[spob] 14/3/2012 12:39

from FT Alphaville today

BEYeah, and UK Coal's getting smashed.
UK Coal PLC (UKC:LSE): Last: 22.50, down 7 (-23.73%), High: 24.00, Low: 17.00, Volume: 5.63m
BEThe news is that Daw Mill, the UK's biggest colliery, is likely to be shut down by early 2014.
PMOh dear
BEThe idea is that deep mining's overly risky compared with the rest of UK Coal.
BEWhich is, basically, a property incubator.
BEBut it means shareholders are facing dilution.

BEHere's Numis with the summary.

BEUK Coal has announced a review of the business and the start of a consultation process over the future of Daw Mill, which may lead to its temporary or permanent closure. Furthermore, the company state that production at Daw Mill is c.200k tons below expectations for 2012 and to achieve its 2012 goals coal needs to be recovered from the previous face and production on the current coal face needs to accelerate. As a result of the risk to timing, we are reducing PBT estimates for 2012. UK Coal states that the strategic review is at an early stage and initial discussions have been positive. However, if the restructuring is successful it could lead to dilution to current shareholders.
BEUK Coal has commenced discussions with key stakeholders about the strategic proposals and the company believes these stakeholders will be supportive of the proposals. In our view this could ultimately lead to UK Coal splitting the individual operating businesses, thereby removing the risk of one part of the business damaging the wider group. UK Coal announces that if the restructuring plan is successfully, shareholders may face dilution to their holdings.


BEAnd Investec

BEOur previous target price (59p) and recommendation (Buy) were made on the assumption of an improvement in productivity at Daw Mill, which has not been achieved. Clearly, today's announcement highlights various unknowns for the group going forwards. These are not simply restricted to the closure, or not, of Daw Mill, but relate to the potential output and operating costs of that mine for the next 2 years without development, and taking into account redundancy costs, and any changes to
bank or generator debt, or pension terms. Given such material uncertainty, we
withdraw our recommendation and target price.


BEAlways been a punter stock this one
BEBased largely on the land bank
BEWhich was £289m as of June 2011

BEOh, I should mention that Investec is shop to UK Coal.

[deanroberthunt] 14/3/2012 12:19

this is an avoid at best...

[jacks13] 14/3/2012 11:02

Warbaby in his recent post (2729) was right to single out Daw Mill as a significant barrier to the recovery of the Company. Which is to say its ability to earn its way out of difficulties by means of copious deep mines' coal sales.

Today's announcement plainly puts the gun to Daw Mill's head. Get back on track by May or the pit will be mothballed in 2013, no further face development will be undertaken.

The Company talks about implementing 'a financial framework that is capable of supporting ongoing investment in each deep mine over its remaining economic life.....to isolate the operating risk of each deep mine from the group as a whole'.

This sounds like a non-recourse debt arrangement whereby each mine will be a stand-alone entity responsible for financing its own borrowing. This raises the question of who would lend money exclusively to Daw Mill. I suggest no one would.

This is no bluff, Daw Mill will in all probability be mothballed. The industrial relations and geological problems may not be insurmmountable but the smart money must be on, 'the potential closure of Daw Mill....to exploit the mine's considerable long-term resources....under a lower risk operating model'.

It is flagged up that (further) shareholder dilution is on the agenda. This again is a certainty, Jonson Cox will not go through this pain and not take it as an opportunity to restructure UK Coal, employing a different business model.

The opportunity offered to Daw Mill is a last gasp chance which you can rely upon it failing. New equity and new debt will be created and by the year end the business will look rather different.

[strutt12] 14/3/2012 10:33

Andrew,

Depends on what the dilution will cost us!!!!!