BISICHI MINING - Half-year Report

31 August 2017

BISICHI MINING PLC

Interim Results for the period ended 30 June 2017
 

For the six months ending 30^th June 2017:

• Profit before tax                £243,000               (2016: £162,000)

• EBITDA [1]:                      £1.4million          (2016: £1.0million)                 

• Adjusted EBITDA [2]:       £1.4million           (2016: £0.7million)

• EPS (basic):                     2.37p                     (2016: 1.7p)   

• Total production:              582,000 tonnes      (2016: 795,000 tonnes)

• Production at Black Wattle impacted by higher than expected seasonal rains and stone contamination issues

• Majority of new infrastructure improvements to the coal washing plant completed

• Physical demand for Black Wattle coal remains strong and international and domestic coal prices have remained stable

• UK property portfolio performing well with voids across the portfolio at only 1.6% (2016: 2.0%)
   

END
 

For further information, please call:

Andrew Heller/Garrett Casey      Bisichi Mining PLC                                  020 7415 5030
 

[1] Earnings before Interest, taxation, depreciation and amortisation.

[2] Operating profit before depreciation, fair value adjustments and exchange movements. 

Bisichi Mining PLC

Half year review – 30 June 2017

For the six month period ending on 30 June 2017, Bisichi Mining PLC achieved earnings before interest, tax, depreciation and amortisation of £1.4million (2016: £1.0 million).

During the first six months of this year production at Black Wattle, our direct coal mining asset in South Africa, was impacted by higher than expected seasonal rains as well as ongoing stone contamination issues at our opencast areas. Overall, the mine achieved total production of 582,000 metric tonnes (2016: 795,000 metric tonnes) during the period reported evenly spread between both quarters. Although this was an improvement on the 466,000 metric tonnes achieved in the second half of last year, management has planned for further progress to be made in developing our opencast areas and increasing production in the second half of the year.

We are pleased to report that the majority of the new infrastructure improvements to the coal washing plant, as reported to shareholders in our annual report earlier this year, have now been completed. The new infrastructure will assist in reducing stone contamination through the washing plant and will allow Black Wattle to mine at a higher rate of production at our opencast areas and increase yield.

In terms of markets, the demand for our coal has remained strong and international and domestic coal prices have continued to remain stable for most of the first half of 2017. Overall, the increase in group revenue compared to the same period last year can mainly be attributed to the appreciation of the Rand against our reporting currency (UK Sterling) as well as improved coal prices. In turn, the increase in group operating costs compared to the same period last year can also mainly be attributed to the appreciation of the Rand against our reporting currency as well as increased mining costs at our new opencast mining areas.

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 at Black Wattle in order to benefit from the various infrastructure improvements we now have in place.

At present, the Board has no new material information to report in regard to the acquisition of the Pegasus coal project, the details of which was reported to shareholders in our Annual report.

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 1.6% (2016: 2.0%). Revenue from our directly owned property portfolio increased to £0.56million (2016: £0.53million) during the period reported.

Your directors intend to pay an interim dividend of 1p per share which will be paid on the 9 February 2018, to shareholders on the register at the close of business on 5 January 2018.

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
31 August 2017                                               

Bisichi Mining PLC

Consolidated income statement

for the six months ended 30 June 2017

			Unaudited	Unaudited	Audited
			6 months ended	6 months ended	Year ended
			30 June	30 June	31 December
			2017	2016	2016
		Notes	£000	£000	£000
Group revenue		1	16,732	10,925	22,815
Operating costs			(16,283)	(10,675)	(22,635)
Operating profit/(loss) on trading activities			449	250	180
Increase in value of investment properties			-	-	445
Increase/(Decrease) in value of other investments			-	11	12
Operating profit		1	449	261	637
Share of profit/(loss) in joint ventures			4	(1)	(7)
Profit before interest and taxation			453	260	630
Interest receivable			127	124	270
Interest payable			(337)	(226)	(554)
Profit/(Loss) before taxation		1	243	162	346
Income tax		2	(18)	(4)	61
Profit/(Loss) for the period			225	158	407
Attributable to:
Equity holders of the company			253	182	479
Non-controlling interest			(28)	(24)	(72)
Profit/(Loss) for the period			225	158	407
Earnings/(Loss) per share - basic		3	2.37p	1.70p	4.48p
Earnings/(Loss) per share - diluted		3	2.37p	1.70p	4.48p

Bisichi Mining PLC

Consolidated statement of comprehensive income

for the six months ended 30 June 2017

		Unaudited	Unaudited	Audited
		6 months ended	6 months ended	Year ended
		30 June	30 June	31 December
		2017	2016	2016
		£000	£000	£000
Profit/(Loss) for the period		225	158	407
Other comprehensive income:
Exchange differences on translation of foreign operations		7	490	1,106
Gain/(Loss) on available for sale investments		28	60	193
Taxation		(3)	(13)	(13)
Other comprehensive income for the period, net of tax		32	537	1,286
Total comprehensive income for the period		257	695	1,693
Attributable to:
Equity shareholders		285	669	1,665
Non-controlling interest		(28)	26	28
Total comprehensive income for the period		257	695	1,693

   
 

Bisichi Mining PLC
Consolidated Balance Sheet
as at 30 June 2017
		Unaudited		Unaudited	Audited
		30 June		30 June	31 December
		2017		2016	2016
Assets		£000		£000	£000
Non-current-assets
	Value of investment properties	13,265		12,800	13,245
	Fair value of head leases	181		186	181
	Investment property	13,446		12,986	13,426
	Reserves, plant and equipment	8,819		6,319	8,520
	Investments in joint ventures	1,326		1,197	1,321
	Loan to joint venture	1,398		1,105	1,350
	Other investments	46		25	32
	Total non-current assets	25,035		21,632	24,649
Current assets
	Inventories	842		2,117	1,721
	Trade and other receivables	6,163		7,277	7,246
	Corporation tax recoverable	-		-	32
	Available for sale investments	779		654	781
	Cash and cash equivalents	2,414		2,757	2,444
	Total current assets	10,198		12,805	12,224
Total assets		35,233		34,437	36,873
Liabilities
Current liabilities
	Borrowings	(806)		(2,981)	(3,358)
	Trade and other payables	(7,963)		(6,179)	(6,950)
	Current tax liabilities	(113)		(136)	(18)
	Total current liabilities	(8,882)		(9,296)	(10,326)
Non-current liabilities
	Borrowings	(5,887)		(5,961)	(5,876)
	Provision for rehabilitation	(1,283)		(1,028)	(1,236)
	Finance lease liabilities	(181)		(186)	(181)
	Deferred tax liabilities	(2,164)		(2,053)	(2,248)
	Total non-current liabilities	(9,515)		(9,228)	(9,541)
Total liabilities		(18,397)		(18,157)	(19,867)
Net assets		16,836		15,913	17,006
Equity
	Share capital	1,068		1,068	1,068
	Share premium	258		258	258
	Translation reserve	(1,744)		(2,317)	(1,751)
	Available for sale reserves	85		(73)	60
	Other reserves	683		588	683
	Retained earnings	16,165		16,042	16,339
	Total equity attributable to equity shareholders		16,515	15,566	16,657
	Non-controlling interest	321		347	349
Total equity		16,836		15,913	17,006

Bisichi Mining PLC

Consolidated Cash Flow Statement

For the six months ended 30 June 2017

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2017	2016	2016
		£000	£000	£000
Cash flows from operating activities
Operating profit		449	261	637
Depreciation		956	736	1,785
Unrealised (gain)/loss on other investments		-	(11)	(12)
Unrealised gain on investment properties		-	-	(445)
Share based payment expense		-	14	109
Exchange adjustments		28	(264)	(449)
Movement in working capital		2,630	(183)	1,362
Net interest paid		(162)	(60)	(327)
Income tax paid/(received)		23	27	(46)
Cash flow from operating activities		3,924	520	2,614
Cash flows from investing activities		(1,258)	378	(1,691)
Cash flows from financing activities		(154)	(170)	(521)
Net increase/(decrease) in cash and cash equivalents		2,512	728	402
Cash and cash equivalents at 1 January		(890)	(626)	(626)
Exchange adjustment		(2)	(318)	(666)
Cash and cash equivalents at end of period		1,620	(216)	(890)
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		2,414	2,757	2,444
Bank overdrafts		(794)	(2,973)	(3,334)
Cash and cash equivalents at end of period		1,620	(216)	(890)

Bisichi Mining PLC

Consolidated statement of changes in shareholders' equity

for the six months ended 30 June 2017

	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 2016	1,068	258	(2,757)	(120)	574	16,287	15,310	321	15,631
Profit for the period	-	-	-	-	-	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
Balance as at 1 January 2016	1,068	258	(2,757)	(120)	574	16,287	15,310	321	15,631
Revaluation of investment properties and impairments	-	-	-	-	-	331	331	-	331
Other income statement movements	-	-	-	-	-	148	148	(72)	76
Profit for the year	-	-	-	-	-	479	479	(72)	407
Other comprehensive income and expense	-	-	1,006	180	-	-	1,186	100	1,286
Total comprehensive  income  for the year	-	-	1,006	180	-	479	1,665	28	1,693
Dividend	-	-	-	-	-	(427)	(427)	-	(427)
Equity share options	-	-	-	-	-	-	-	-	-
Share options cancelled	-	-	-	-	109	-	109	-	109
Balance at 31 December 2016	1,068	258	(1,751)	60	683	16,339	16,657	349	17,006
Profit for the year	-	-	-	-	-	253	253	(28)	225
Other comprehensive income and expense	-	-	7	25	-	-	32	-	32
Total comprehensive  income  for the period	-	-	7	25	-	253	285	(28)	257
Dividend	-	-	-	-	-	(427)	(427)	-	(427)
Equity share options	-	-	-	-	-	-	-	-	-
Balance at 30 June 2017	1,068	258	(1,744)	85	683	16,165	16,515	321	16,836

ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:                            

The results for the six months ended 30 June 2017 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 2016 and which will form the basis of the 2017 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
		2017	2016	2016
		£000	£000	£000
Revenue
Mining		16,160	10,739	21,703
Property		558	530	1,084
Other		14	16	28
		16,732	10,925	22,815
Operating profit/(loss)
Mining		68	(73)	(581)
Property		368	308	1,181
Other		13	26	37
		449	261	637
Share of profit in joint ventures		4	(1)	(7)
Interest receivable		127	128	270
Interest payable		(337)	(226)	(554)
Profit/(Loss) before taxation		243	162	346

2.        Taxation           

		Unaudited	Unaudited	Audited
		30 June	30 June	31 December
		2017	2016	2016
		£000	£000	£000
Based on the results for the period:
Corporation tax at 19.50% (2016: 20.25%)		107	142	70
Prior year adjustment - UK		-	-	-
		107	142	70
Deferred taxation		(89)	(138)	(131)
		18	4	(61)

3.        Earnings/ (loss) per share

Both the basic and diluted earnings per share calculations are based on a profit of £253,000 (2016: £182,000). The basic earnings per share has been calculated on a weighted average of 10,676,839 (2016: 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 (2016: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2016: nil) totalling 10,676,839 (2016: 10,676,839).

4.        Investment properties

Investment properties are included at valuation as at 31 December 2016 plus additions in the period ended 30 June 2017.

5.        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 2016. The group paid management fees of £68,750 (30 June 2016: £68,750 31 December 2016: £137,500) to London & Associated Properties PLC, an associated company.

6.        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 2016 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 2017 as were used for the year ended 31 December 2016.

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.
IFRS 16 – Leases

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 2016 Annual report and Accounts for details on the valuation of investment properties as at 31 December 2016.

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 2016.

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.

7.        Dividend

The interim dividend in respect of 2016, totalling £107,000 was paid on the 10^th of February 2017. The final dividend in respect of 2016, totalling £320,000 was approved  by the shareholders at the Annual General Meeting  held on the 7th June 2017 and was paid on the 28th July 2017. The final dividend in respect of 2016 is included as a liability in these interim financial statements.

A proposed interim dividend for the year ended 31 December 2017 totalling £107,000 was approved by the Board of Directors on 31 August 2017 and has not been included as a liability in these Interim Financial Statements.

8.        Principal risks and uncertainties

The Group has an established risk management process which works within the corporate governance framework as set out in the 2016 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 10 of the 2016 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2017 to the principle risks and uncertainties as set out in the 2016 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 risk
• Mining risk
• Currency risk
• New reserves and mining permissions
• Power supply risk
• Flooding risk
• Environmental risk
• Health & safety risk
• Labour risk
• Cashflow
• Coal qualities

Property:

• Property valuation

9.        Board approval

These interim results were approved by the Board of Bisichi Mining on 31 August 2017.

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 2016 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
31 August 2017               

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

E-mail                                                          [e-mail]      

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