Intention to Float Scottish Resources Group

 

TIDMPMS 
 
RNS Number : 3061O 
Palmaris Capital PLC 
28 June 2010 
 

 
 
                              Palmaris Capital Plc 
 
                          ("Palmaris" or the "Company") 
 
                  Intention to Float Scottish Resources Group 
 
 
The Board of Palmaris, the investment company with a 16.1% holding in Scottish 
Resources Group Limited ("SRG"), its sole remaining investment, is pleased to 
announce that SRG has this morning released an announcement of its intention to 
seek admission of its ordinary shares to the Official List of the UKLA and to 
trading on the main market of the London Stock Exchange by way of an initial 
public offer to institutional investors.  SRG's announcement has been set out in 
full at the end of this announcement. 
 
Whether or not the IPO of SRG proceeds (and, if so, at what valuation) will be 
determined following an institutional marketing process, which is expected to 
complete in mid to late July. The Directors believe that SRG will be seeking to 
secure an equity valuation in excess of GBP220 million.  If the IPO proceeds, 
then Palmaris may sell down most or all of its shareholding in SRG as part of 
that process. However, there can be no certainty that this will occur or, if it 
does occur, how many shares Palmaris will be able to sell in the IPO and at what 
price. 
 
In addition, the Board of SRG has approved SRG's annual report and financial 
statements for the 52 week period ended 27 March 2010 ("2010 Accounts").  During 
that period, significant operational progress was made: production increased 12% 
to 3.4 million tonnes, revenues increased 59% to GBP229.9 million, and profit 
before tax of GBP28.5 million was generated, compared to a loss before tax of 
GBP12.2m in the prior period.  In addition, the group was able to reduce net 
bank debt substantially by GBP18.4 million, from GBP38.3 million to GBP19.9 
million by the period end.  SRG's 2010 Accounts are incorporated in full in this 
announcement through the following URL link: 
http://www.rns-pdf.londonstockexchange.com/rns/3061O_1-2010-6-27.pdf. 
 
SRG is the largest surface mining coal producer in the UK. As a result of its 
mining operations, the group also has a strategic land portfolio in the central 
belt of Scotland which represents a significant ongoing opportunity for 
residential and commercial developments as well as for renewable energy 
projects. 
 
Greg Melgaard, Managing Director of Palmaris, commented: "Palmaris has been a 
supportive shareholder of SRG since privatisation.  We have been delighted with 
the progress that SRG has made under its management team in recent years, and 
have great confidence in its continuing success." 
 
 
 
 
+------------------------------------+------------------------------------+ 
| For further information contact:   |                                    | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Greg Melgaard, Managing Director   | 07799 657 553                      | 
| www.palmariscapital.com            |                                    | 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| John Llewellyn-Lloyd/Harry         | 0207 456 9191                      | 
| Stockdale, Execution Noble &       |                                    | 
| Company Limited                    |                                    | 
| (Nominated Adviser)                |                                    | 
+------------------------------------+------------------------------------+ 
 
 
 
 
 
 
=------------------------------------------------------------------------------ 
                             ---------------------- 
 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR 
INTO, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, SOUTH AFRICA OR JAPAN 
This announcement is not a prospectus but an advertisement. Investors should not 
purchase or subscribe for any transferable securities referred to in this 
announcement except on the basis of information in the prospectus to be 
published by Scottish Resources Group plc1 ("SRG" or the "Company"") in 
connection with the admission of the ordinary shares in the capital of the 
Company to the Official List of the UK Listing Authority (the "Official List") 
and to trading on London Stock Exchange plc's main market for listed securities 
(the "London Stock Exchange").  Copies of the prospectus will, following 
publication, be available from the Company's registered office. 
                          Scottish Resources Group plc 
 
                       Announcement of Intention to Float 
 
Scottish Resources Group plc ("SRG" or the "Company" and together with its 
subsidiaries, the "Group") today announces its intention to seek admission of 
its ordinary shares to the Official List and to trading on the main market of 
the London Stock Exchange ("Admission") by way of an initial public offer to 
institutional investors (the "Placing"). 
 
Scottish Resources Group plc is the largest surface mining coal producer in the 
UK. As a result of its mining operations, the Group also has a strategic land 
portfolio in the central belt of Scotland which represents a significant ongoing 
opportunity for residential and commercial developments as well as for renewable 
energy projects. 
 
SRG is the largest surface coal mining company in the UK 
 
·    Nine operating surface coal mine sites in Scotland, producing 3.4 million 
tonnes of coal in the year ended 27 March 2010, a 12.3 per cent. increase from 
the year ended 28 March 2009 
·    20 per cent. share of total UK coal production in 2009 and a 34 per cent. 
share of UK surface mine coal production in 2009 
·     Operates and maintains one of the largest fleets of heavy mining equipment 
in Europe 
·     Strong customer relationships with majority of the principal UK 
electricity generators 
·     10.6 million tonnes of coal forward sales contracts 
 
Substantial reserves and land bank 
 
·     Audited coal reserves and resources of 52.3 million tonnes as at 27 March 
2010 
·     Proven track record of reserve replenishment in excess of production 
·    Freehold land portfolio of approximately 25,000 acres, plus approximately 
11,000 acres of leasehold and optioned land, across the central belt of Scotland 
·    Total aggregate RICS "Red Book" freehold property valuation of GBP55.7 
million as at 30 April 2010 by independent valuers, DTZ 
·    Separate "value vision" exercise of the land bank undertaken by the 
Directors and DTZ gives a potential value of GBP165 million to GBP200 million 
·    Integrated business model with core skills in planning and engagement with 
local and national government 
 
Growth opportunities 
 
·    Organic growth potential in coal production underpinned by reserves and 
resources base and planning consent track record 
·    52.3 million tonnes of audited reserves and resources, 7.6 million tonnes 
of reported resources and, in addition, prospective resources of over 40 million 
tonnes of coal 
·    Exposure to upside in world price of coal; world coal consumption forecast2 
to increase by 56 per cent. over the period from 2007 to 2035 driven by 
industrialisation of India & China 
·    31 per cent. of UK coal consumption from indigenous production in 2009; UK 
demand expected to continue to exceed indigenous production 
·    Significant opportunities from land portfolio: current planning proposals 
and consents include approximately 2,100 new homes and 3 million sq ft of 
industrial and distribution space 
·    Growing and established market for renewable energy projects in Scotland 
with a favourable planning environment: Group working on developing 7 wind farm 
sites 
 
Summary of the Offer 
 
·    An issue by the Company of new Ordinary Shares and the sale of Ordinary 
Shares by certain of the Company's existing shareholders to institutional 
investors 
·   The Group is seeking to raise new equity capital of approximately GBP25 
million (net of associated expenses) to refinance the acquisition of a surface 
mine site with reserves of approximately 0.6 million tonnes, to accelerate the 
acquisition of certain 3rd party rights to one of the Group's properties, as 
well as to strengthen the Group's balance sheet 
·    Panmure Gordon (UK) Limited ("Panmure Gordon") is acting as Sponsor and 
Bookrunner for the Placing 
·    Pricing of the Placing and Admission are expected to take place in mid to 
late July 
 
Strong Results 
 
In year to 27 March 2010: 
·     Production grew by 12 per cent. to 3.4 million tonnes 
·     Revenues grew by 59 per cent. to GBP229.9 million 
·     EBITDA3 grew by 191 per cent. to GBP48.2 million 
 
Strong Management Team 
 
·    Experienced Executive team headed by Don Nicolson, CEO, with  Nick Guest, 
Finance Director, Alan Somerville, MD - Estates & Renewables and Andrew Foster, 
MD - Coal 
·    Non-Executive Board adding relevant expertise and experience including Nick 
Parker (Chairman), Sir Peter Burt (Senior Independent Non-executive Director), 
Charles Hammond, Lord Lindsay, Brian Wilson, Adrian Ewer and Keith Falconer 
 
Don Nicolson, Chief Executive of Scottish Resources Group, said: 
 
"As the UK's largest surface coal mining company, Scottish Resources Group has 
the scale, asset base and stakeholder relationships to maximise growth 
opportunities. We have a strong management team with significant operational 
experience and a track record of achieving planning consents. Our strategic land 
portfolio offers residential, commercial and renewable energy opportunities in 
addition to surface mining, which positions us well for the future. We plan to 
raise approximately net GBP25 million of new equity capital which will provide 
Scottish Resources Group with the financial resources to take advantage of these 
opportunities." 
 
 
Rt Hon Alex Salmond MSP, First Minister of Scotland, said: 
 
"SRG is a dynamic Scottish-based energy company which has increased its 
workforce by 50 per cent. in the last two years and which is now looking to grow 
further. It is particularly welcome that SRG is looking to capitalise on the 
huge growth opportunities in Scotland's renewable energy market and is poised to 
make its own contribution to our nation's world-leading climate change targets." 
 
Notes: 
1. As at the date of this announcement the Company referred to as Scottish 
Resources Group plc is known as Scottish Resources Group Limited. Prior to 
Admission, it is proposed that Scottish Resources Group Limited will re-register 
as a public company, at which stage it will be named Scottish Resources Group 
plc. 
2. US Energy Information Administration, 2010 International Energy Outlook 
3. EBITDA is defined as operating profit/(loss) before revaluation movements, 
depreciation and amortisation 
                                    - Ends - 
 
 
For further information regarding SRG, please call: 
 
+---------------------------------+---------------------------+ 
| Scottish Resources Group        |             01259 733 825 | 
+---------------------------------+---------------------------+ 
| Don Nicolson, Chief Executive   |                           | 
| Officer                         |                           | 
| Nick Guest, Chief Financial     |                           | 
| Officer                         |                           | 
|                                 |                           | 
+---------------------------------+---------------------------+ 
| Panmure Gordon                  |             020 7459 3600 | 
+---------------------------------+---------------------------+ 
| Richard Gray/ Edward Farmer/    |                           | 
| Giles Stewart                   |                           | 
|                                 |                           | 
+---------------------------------+---------------------------+ 
| FD                              |             020 7831 3113 | 
+---------------------------------+---------------------------+ 
| Geoffrey Pelham-Lane/ Billy     |                           | 
| Clegg/ Edward Westropp          |                           | 
|                                 |                           | 
+---------------------------------+---------------------------+ 
 
Notes to Editors: 
 
·    Scottish Resources Group is based at Castlebridge Business Park near Alloa 
in Scotland. 
 
·    The Group operates 9 surface mining sites in central Scotland. The Group 
employs around 1,000 staff. 
 
·    The Group is the largest surface mine operator and the second largest coal 
producer in the UK, and in the year to 27 March 2010 it supplied around 4 
million tonnes of coal to the power generation, industrial, and domestic 
markets. 
 
·    The Group's Renewables Division is developing the Group's interests in 
Renewable Energy. These interests include Wind Energy, Biomass and Energy from 
Waste. 
 
·  The Group's Estates Division controls approximately 25,000 acres of land, 
plus approximately 11,000 acres of leasehold and optioned land, across the 
central belt of Scotland and has a diverse investment and development portfolio. 
 
 
·    The Group's plant arm controls one of the largest fleets of heavy earth 
moving equipment in Europe. 
 
·   Experienced Executive and Non-Executive Board with relevant expertise. The 
Board comprises the following persons: 
 
Nick Parker, Chairman, aged 63 
Nick Parker is a director of a number of companies and partnerships: Pension 
Insurance Corporation Holdings LLP; The Wastepack Group Limited (Chairman); 
Continental Farmers Group PLC (Isle of Man); and Universum Group AB (Sweden). 
After he retired from PricewaterhouseCoopers as a senior partner responsible for 
Project Finance and Privatisation for Europe, the Middle East and Africa, he was 
appointed Head of Performance and Innovation at the Scottish Executive, a part 
time three year role between 2004 and 2007. He has had considerable exposure to 
the energy sector during his professional career, including advising the Polish 
Government on a strategy for the Polish coal industry. He is an advisor to Duke 
Street private equity house. 
 
Don Nicolson, Chief Executive Officer, aged 50 
Don is a senior energy sector business leader with UK and international 
experience. He joined the Group as CEO in 2008 following a successful 26 year 
career with BP plc. He has experience of running large scale oil and gas 
businesses in the United Kingdom, Canada and the United States as well as 
holding senior positions at BP plc's London headquarters. 
 
His key roles whilst at BP plc included: Director BP North Sea, Vice President 
BP Alaska, Vice President BP Canada Energy Company, Asset Manager US 
Mid-Continent and Chief of Staff to the current BP CEO. 
 
Nick Guest, Finance Director, aged 43 
Nick joined the Group in 2007 as Finance Director with significant debt and 
equity fund raising experience in global markets. Nick is a qualified chartered 
accountant and corporate treasurer who has worked in various commercial roles 
for Scottish Amicable and DX Communications before joining Stagecoach Group plc 
("Stagecoach") in 1998. 
 
He held a number of senior finance positions at Stagecoach including Group 
Finance Manager, Group Treasurer and Corporate Finance Director - Rail. Nick was 
part of the senior management team at Stagecoach that led its global expansion 
and built it into one of the largest transport groups in the world. 
 
Alan Somerville, Managing Director - Estates and Renewables, aged 42 
Alan joined the Group in July 2008 as Managing Director of the Estates and 
Renewables Divisions. He is a Chartered Surveyor with UK and overseas experience 
of all aspects of land and property. Alan's early career was spent in London 
with Donaldsons and CBRE, acting as a consultant to UK and overseas investors. 
During that time he worked on some of the United Kingdom's best known 
development projects including Canary Wharf. Alan joined Grosvenor Limited in 
1998 and was responsible for investment and development activities in Scotland 
and Ireland. 
 
Andrew Foster, Managing Director - Coal, aged 52 
Andrew is a civil engineer and senior coal industry manager with 30 years of 
experience in the industry, both in the United Kingdom and overseas. Andrew has 
held engineering and management roles in both deep and surface mining companies, 
including both private and listed companies. He has significant experience in 
project development, mine management, site restoration, and coal asset 
acquisitions. Andrew has worked with the Group in a number of roles since 1996, 
including establishing the in-house plant operations in 2000, became Managing 
Director of coal operations in 2006 and joined the main board in 2007. 
 
Sir Peter Burt, Senior Independent Non-executive Director, aged 66 
Sir Peter Burt is the Executive Chairman and Founding Partner at Promethean 
Investments. He is also Executive Chairman of Promethean plc and Elephant 
Capital plc. Sir Peter has over 25 years of investment experience combined with 
significant acquisition and integration experience and proven operating and 
management skills. He started his career at Hewlett Packard and spent 25 years 
with Bank of Scotland, becoming the Chief General Manager and Chairman of the 
Management Board in 1988 and later becoming the Group Chief Executive. Following 
the merger with Halifax, he became the Deputy Chairman in 2001 at the new HBOS 
plc. He retired from the post in January 2003. Sir Peter was also a Senior 
Advisor at Apax Partners. Sir Peter served as a Non-Executive Chairman of ITV 
plc and served as a Non-Executive Director of Shell Transport and Trading 
Company plc and subsequently of Royal Dutch Shell plc. Sir Peter received an MBA 
from the University of Pennsylvania's Wharton School and was a Thouron scholar. 
 
Charles Hammond, Independent Non-executive, aged 49 
Charles Hammond is Group Chief Executive of Forth Ports plc. He joined Forth 
Ports plc as Company Secretary in 1989 having been previously with the law firm 
McGrigor Donald. He became Commercial Director of Forth Ports plc in 1992, was 
appointed Managing Director, Port of Tilbury London Limited in December 1995 and 
became Group Chief Executive in February 2001. He is Deputy Chairman of the 
United Kingdom Major Ports Group Limited. He was also Chairman of Scottish 
Enterprise Edinburgh and Lothian, until May 2008. He is a member of the Scottish 
Energy Advisory Board and a Director of Edinburgh Chamber of Commerce. 
 
Lord Lindsay, Non-executive Director, aged 54 
Lord Lindsay's career has seen him serve in a number of senior Government posts 
and on Government advisory committees. Notably he was, from 1995 to 1997, Under 
Secretary of State for Scotland: Minister for agriculture, environmental 
protection, countryside, rural affairs, food and food safety, forestry and 
culture. He remains an external advisor to a number of Government departments. 
In addition, Lord Lindsay was President of the Royal Highland and Agricultural 
Society of Scotland from 2005 to 2006 and is a Vice-President of the RSPB. Lord 
Lindsay has also served on the board of a number of companies including UA Group 
plc, Assured British Meat and Genesis Quality Assurance Ltd. His current 
appointments include: Chairman of SAC Ltd, Chairman of UKAS Ltd (United Kingdom 
Accreditation Service), Chairman of Greenfield Holdings Ltd, Non-Executive 
Director of British Polythene Industries plc and Joint Chairman of the Risk and 
Regulation Advisory Council (formerly the Better Regulation Commission). He was 
appointed President of the Royal Scottish Geographical Society in 2005 and is 
Vice-President of the Royal Smithfield Club. 
 
Rt Hon. Brian Wilson, Independent Non-executive Director, aged 61 
Brian Wilson is a former Labour MP for the Cunninghame North constituency in the 
west of Scotland and remains a member of the Privy Council. Between 1997 and 
2005, when he retired from politics, he held six Government posts under Tony 
Blair including Scottish Education Minister, UK Trade Minister, UK Energy 
Minster and Prime Minister's Special Representative on Overseas Trade. Since 
leaving politics, Brian has developed an extensive business and academic 
portfolio. Reflecting the fact that his last Ministerial post was in Energy, a 
number of his current roles are energy-related. He is a director of Amec Nuclear 
and Greenrock Energy and chairs his own consultancy company. He is also a 
director of Celtic Football Club, a consultant to Diageo plc, chairman of Flying 
Matters (which promotes sustainable aviation) and Visiting Professor of 
Government and Media at Glasgow Caledonian University. Brian was educated at 
Dundee University (MA Hons) and University College, Cardiff. 
 
Adrian Ewer FCA, Independent Non-executive Director, aged 56 
After qualifying as a member of the Institute of Chartered Accountants, Adrian 
pursued his career with key posts in Chloride Group plc, Akai (UK) Ltd, the 
Ratcliffe Group Ltd, and as Group Treasurer for Lilley plc prior to joining John 
Laing plc in 1991. Adrian was appointed as John Laing plc's Deputy Finance 
Director in March 1995, Group Finance Director in June 1999 and became Chief 
Executive on 1 June 2006. 
 
Keith Falconer, Independent Non-executive Director, aged 55 
After qualifying as a Chartered Accountant in 1979, Keith joined Martin Currie, 
the Edinburgh-based investment firm. Following several years of managing 
institutional portfolios he became head of sales and client service, retiring in 
2003. He is Chairman of Aberdeen New Thai Investment Trust plc and of Impax 
Asset Management Group plc, an AIM quoted investment company specialising in the 
renewable energy, water and waste sectors. 
 
 
 
1. Introduction to the Group 
 
The core activity of the Group is surface coal mining. As a result of its mining 
operations, the Group has a strategic land portfolio in the central belt of 
Scotland which represents a significant ongoing opportunity to apply for 
planning consents for residential and commercial developments as well as for 
renewable energy projects. The Group's headquarters, business and assets are 
located in Scotland. 
 
The Coal Division is the UK's largest surface coal mining operation with an 
approximate 34 per cent. share of surface mine coal production in the UK and an 
approximate 20 per cent. share of total UK coal production in 2009. In the 2010 
Financial Year, the Group produced 3.38 million tonnes of coal from nine 
operating sites which, with imports and other UK purchases, enabled the Group to 
sell 4.05 million tonnes of coal primarily to its power generator customers. 
This represented 99.8 per cent. of the Group's turnover in the 2010 Financial 
Year. Coal sales contributed GBP24.4 million of total Group operating profit. As 
at 27 March 2010, the Group had audited coal reserves and resources of 52.26 
million tonnes with a further 7.59 million tonnes of reported resources. The 
Group has an ongoing reserves replenishment programme, and it is the Group's 
policy to operate all of its own sites. 
 
The Group has a freehold land portfolio of approximately 25,000 acres. DTZ, 
acting as external valuer, has provided a Red Book valuation of this land 
portfolio of GBP55.7 million as at 30 April 2010. 
 
The Estates Division generated turnover of approximately GBP0.3 million in the 
2010 Financial Year, whilst it contributed approximately GBP8.6 million to the 
operating profit of the Group. This was achieved principally through property 
revaluations arising from advancing projects through the planning process and an 
improvement in property market conditions. 
 
The Renewables Division is pursuing opportunities in wind farms, biomass, 
biofuel trading, waste-to-energy and other clean energy sources and associated 
infrastructure. These opportunities are at the early stage of seeking relevant 
consents or commercial agreements. The Renewables Division generated turnover of 
GBP0.2 million and contributed operating profit of GBP0.1 million in the 2010 
Financial Year. 
 
 
2. Key strengths 
 
2.1 Market leading position 
The Group is the largest surface coal mining business in the United Kingdom and 
is an integral part of the UK coal market. The Group has a proven track record, 
having been in operation since privatisation in 1994. The Group has a broad 
portfolio of current and future sites, well-developed infrastructure, operates 
one of the largest heavy earth moving fleets in Europe and benefits from 
significant economies of scale. 
 
2.2 Integrated business model 
The Group's business model closely integrates each of its three Divisions, which 
combine together to maximise the opportunities in coal mining, land development 
and renewables projects across the portfolio. The Group's key skills in planning 
and stakeholder engagement are common across the Divisions. These skills 
combined with expertise in implementation provide a strong platform to 
accelerate delivery of optimal value for all land uses. 
 
2.3 Substantial reserves and asset base 
The Group has significant audited and reported reserves and resources amounting 
to approximately 60 million tonnes of coal and has identified further surface 
mine prospects of over 40 million tonnes. Since privatisation in 1994, the Group 
has been able to replenish its reserves base in excess of production. Its 
success in building reserves has been driven by the strength of its in-house 
geological and planning teams. The Group has approximately 25,000 acres of 
freehold land, containing operational, restored and future coaling assets. The 
majority of these assets have multiple land use opportunities. 
 
2.4 Strong customer relationships 
The Group has long-standing supply relationships with the majority of the 
principal UK electricity generators. At 27 March 2010, the Group had 
approximately 10.63 million tonnes of forward sales contracts. 
 
2.5 Strength of management 
The Group has a high quality team of experienced staff at all key levels in the 
business. The executive team has been strengthened over the last three years 
with the recruitment of a new Finance Director, Estates and Renewables Managing 
Director and a new Chief Executive Officer, Don Nicolson. 
 
 
3. Growth opportunities and strategy 
 
The Group has a growth strategy in place to drive shareholder value from each of 
its three integrated Divisions. The strategy will exploit the Group's market 
leadership to increase coal production and its resource base. The Group will 
also seek to diversify through increasing the contribution to Group earnings of 
the Estates Division and the Renewables Division. 
 
The Group's strategy will be delivered primarily through organic growth from its 
large resource base and land bank. In addition, selected value-enhancing 
opportunistic acquisitions may be pursued. 
 
Individual Divisional strategies are as follows: 
 
- Coal Division 
The Group will seek to increase levels of production each year whilst targeting 
reserve and resource growth in excess of production levels. The strategy will be 
based on continuing to deliver strong operational efficiencies whilst seeking to 
deliver continuous improvement in health, safety and environmental performance. 
 
- Estates Division 
The Group will seek to deliver a combination of capital value growth and cash 
returns through obtaining planning consents, making asset sales and entering 
into joint ventures. 
 
- Renewables Division 
The Group will seek to exploit its land portfolio through pursuing planning 
consents which will allow the development of renewable energy projects over the 
medium term. 
 
The Directors believe that the combination of the Group's strong asset base, 
skill sets, stakeholder relationships and track record will underpin the 
successful delivery of its strategy. 
 
 
 4. Summary financial information 
 
The information below has been extracted without material adjustment from the 
Group's audited financial information for the periods ended 29 March 2008, 28 
March 2009 and 27 March 2010. 
 
+-----------------------+-----------+------------+------------+ 
| Income statement      |      2010 |       2009 |       2008 | 
| extracts              | Financial |  Financial |  Financial | 
|                       |      Year |       Year |       Year | 
|                       |   GBP'000 |    GBP'000 | GBP'000(1) | 
+-----------------------+-----------+------------+------------+ 
| Revenue               |   229,891 |    144,597 |    112,609 | 
+-----------------------+-----------+------------+------------+ 
| Gross profit          |    32,203 |      2,871 |      1,905 | 
+-----------------------+-----------+------------+------------+ 
| Operating             |    33,097 |    (6,188) |      9,398 | 
| profit/(loss)         |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| Profit/(loss) for the |    21,237 |    (9,120) |        204 | 
| year                  |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| EBITDA before         |    48,164 |     16,543 |     16,562 | 
| revaluation movements |           |            |            | 
| (2)                   |           |            |            | 
+-----------------------+-----------+------------+------------+ 
|                       |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| Balance sheet         |  27 March |   28 March |   29 March | 
| extracts              |      2010 |       2009 |       2008 | 
|                       |   GBP'000 |    GBP'000 |    GBP'000 | 
+-----------------------+-----------+------------+------------+ 
| Property, plant and   |   116,997 |    104,065 |     79,517 | 
| equipment             |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| Investment property   |    37,721 |     26,210 |     29,910 | 
+-----------------------+-----------+------------+------------+ 
| Financial liabilities |    11,019 |     33,691 |     22,020 | 
| - current borrowings  |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| Financial liabilities |    49,436 |     33,735 |     23,572 | 
| - non-current         |           |            |            | 
| borrowings            |           |            |            | 
+-----------------------+-----------+------------+------------+ 
| Net assets            |    27,359 |     13,583 |     26,082 | 
+-----------------------+-----------+------------+------------+ 
|                       |           |            |            | 
+-----------------------+-----------+------------+------------+ 
 
Notes: 
1. The 2008 Financial Year was a 53 week period. 
2. EBITDA before revaluation movements is defined as operating profit/(loss) 
before revaluation movements, depreciation and amortisation. 
 
5. Dividend policy 
 
The Directors intend to pursue a progressive dividend policy and, in the absence 
of unforeseen circumstances, the first dividend following Admission will be a 
final dividend paid in respect of the 2011 Financial Year. 
 
 
DISCLAIMERS The contents of this announcement, which have been prepared by and 
are the sole responsibility of Scottish Resources Group plc, have been approved 
by Panmure Gordon (UK) Limited of Moorgate Hall, 155 Moorgate, London EC2M 6XB 
solely for the purposes of section 21(2)(b) of the Financial Services and 
Markets Act 2000. 
 
This announcement does not constitute or form part of any offer or invitation to 
sell, or any solicitation of any offer to purchase nor shall it (or any part of 
it) or the fact of its distribution, form the basis of, or be relied on in 
connection with, any contract therefor.  The offer and the distribution of this 
announcement and other information in connection with Admission and the Placing 
in certain jurisdictions may be restricted by law and persons into whose 
possession any document or other information referred to herein comes should 
inform themselves about, and observe, any such restrictions. Any failure to 
comply with these restrictions may constitute a violation of the securities laws 
of any such jurisdiction. 
Neither this announcement nor any copy of it may be made or transmitted into the 
United States, its territories or possessions or distributed, directly or 
indirectly, in the United States, its territories or possessions.  Neither this 
announcement nor any copy of it may be taken or transmitted into Australia, 
Canada, South Africa or Japan or to any persons in any of those jurisdictions. 
Any failure to comply with this restriction may constitute a violation of United 
States, Australian, Canadian, South African or Japanese securities law.  The 
distribution of this announcement in other jurisdictions may be restricted by 
law and persons into whose possession this announcement comes should inform 
themselves about, and observe, any such restrictions.  The securities referred 
to herein have not been registered under the applicable securities laws of the 
United States, Australia, Canada, South Africa or Japan and, subject to certain 
exceptions, may not be offered or sold within the United States, Australia, 
Canada, South Africa or Japan or to any national, resident or citizen of the 
United States, Australia, Canada, South Africa or Japan. 
This announcement does not contain or constitute an offer of, or the 
solicitation of an offer to buy or subscribe for, Ordinary Shares to any person 
in the United States, Australia, Canada, Japan or South Africa or in any 
jurisdiction to whom or in which such offer or solicitation is unlawful. In 
particular, this announcement is not an offer for sale of, or a solicitation to 
purchase or subscribe for, any securities in the United States. No securities of 
the Group have been, or will be, registered under the US Securities Act of 1933, 
as amended, and securities of the Company may not be offered or sold in the 
United States absent registration or an applicable exemption from, or 
transaction not subject to, the registration requirements of the US Securities 
Act of 1933, as amended. 
Forward Looking Statements 
This announcement contains "forward-looking statements" which reflect the 
Company's or, as appropriate, the Directors' current views with respect to 
financial performance, business strategy, plans and objectives of management for 
future operations (including development plans relating to the Company's or the 
Group's business). These statements include forward-looking statements both with 
respect to the Company and/or the Group and the sectors and industries in which 
the Company and/or the Group operates. Statements which include the words 
"expects", "intends", "plans", "believes", "projects", "anticipates", "will", 
"targets", "aims", "may", "would", "could", "continue" or, in each case, their 
negative. 
 
By their nature, forward-looking statements address matters that involve risks 
and uncertainties because they relate to events and depend on circumstances that 
may or may not occur in the future. Forward-looking statements are not 
guarantees of future performance. Accordingly, there are or will be important 
factors that could cause the Company's and/or the Group's actual results to 
differ materially from those indicated in these statements. 
 
Any forward-looking statements contained in this announcement reflect the 
Directors' and/or the Company's current views with respect to future events and 
are subject to these and other risks, uncertainties and assumptions relating to 
the Company's and/or the Group's business, results of operations, financial 
condition and growth strategy. 
 
These forward-looking statements speak only as of the date of this announcement. 
Subject to any obligations under the Prospectus Rules, the Disclosure and 
Transparency Rules or the Listing Rules and save as required by the FSA, the 
London Stock Exchange, the City Code or applicable law and regulations, each of 
the Company, the Directors and Panmure Gordon (UK) Limited expressly disclaims 
any undertaking or obligation to publicly update or review any forward-looking 
statement, whether as a result of new information, future developments or 
otherwise. Any purchase of Ordinary Shares in the proposed Placing should be 
made solely on the basis of the information contained in the final Prospectus to 
be issued by the Company in connection with the Placing and Admission. No 
reliance should be placed by any person for any purposes whatsoever on the 
information contained in this announcement or on its completeness, accuracy of 
fairness. The information in this announcement is subject to change. 
 
All subsequent written and oral forward-looking statements attributable to the 
Company or individuals acting on behalf of the Company (including the Directors) 
are expressly qualified in their entirety by this paragraph. 
 
Timetable, Subscription of Ordinary Shares and Liability 
 
The Placing timetable, including the date of Admission, may be influenced by a 
range of circumstances such as market conditions. There is no guarantee that 
Admission will occur and you should not base your financial decisions on SRG's 
intentions in relation to Admission at this stage. 
This announcement does not constitute a recommendation concerning the Placing. 
The price and value of the Ordinary Shares can go down as well as up. Past 
performance is not a guide to future performance. Information in this 
announcement or any of the documents relating to the Placing cannot be relied 
upon as a guide to future performance. Acquiring Ordinary Shares to which this 
announcement relates may expose an investor to a significant risk of losing all 
of the amount invested. Potential investors should consult a professional 
advisor, authorised by the FSA and specialising in such investments, as to the 
suitability of investing in Ordinary Shares and of the Placing for the entity 
concerned. Panmure Gordon (UK) Limited, which is authorised and regulated in the 
United Kingdom by the FSA, is acting exclusively for the Company and no-one else 
in connection with the Placing. They will not regard any other person as their 
respective clients in relation to the Placing and will not be responsible to 
anyone other than the Company for providing the protections afforded to their 
respective clients, nor for providing advice in relation to the Placing, the 
contents of this announcement or any transaction, arrangement or other matter 
referred to herein.In connection with Admission and the Placing, Panmure Gordon 
(UK) Limited or any of its affiliates, acting as investors for their own 
accounts, may subscribe for or purchase Ordinary Shares and in that capacity may 
retain, purchase, sell, offer to sell or otherwise deal for their own accounts 
in such Ordinary Shares and other securities of the Company or related 
investments in connection with the Placing or otherwise. Accordingly, references 
in the prospectus, once published, to the Ordinary Shares being issued, offered, 
subscribed, acquired, placed or otherwise dealt in should be read as including 
any issue or offer to, or subscription, acquisition, placing or dealing by, 
Panmure Gordon (UK) Limited and any of its affiliates acting as investors for 
their own accounts. Panmure Gordon (UK) Limited does not intend to disclose the 
extent of any such investment or transactions otherwise than in accordance with 
any legal or regulatory obligations to do so. 
Neither Panmure Gordon (UK) Limited nor any of its respective affiliates or any 
of their respective directors, officers, employees, advisers or agents accepts 
any responsibility or liability whatsoever for/or makes any representation or 
warranty, express or implied, as to the truth, accuracy or completeness of the 
information in this announcement (or whether any information has been omitted 
from the announcement) or any other information relating to the Company, its 
subsidiaries or associated companies, whether written, oral or in a visual or 
electronic form, and howsoever transmitted or made available or for any loss 
howsoever arising from any use of this announcement or its contents or otherwise 
arising in connection therewith. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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