UK Coal Share Discussion Threads

[499budgie] 26/8/2011 05:15

warbaby.
I know somebody who works.....I don't know the specifics, but I do know the plaster board company attached to Ferrybridge PS is enjoying the byproduct !
But to be honest the recovery is in place and the timing is good, wholesale prices moving higher UKC are joining the food chain....
In my opinion this is a strong "BUY"....but it is only my opinion....DYOR.499

[jacks13] 25/8/2011 20:57

From my limited knowledge the coal is pulverised before being hopper fed onto moving grate furnaces. (The residue of combustion, the pulverised fuel ash, is used to make building blocks.)

Powerful fans blast air through the grate from below and every last calorie is extracted out of the coal and as realminer says the fuel mix can be of very low quality, not the anthracite steam coal we might imagine.

In Australia they burn the indigenous brown coal which is part formed coal open-cast mined local to the power stations.

[warbaby43] 25/8/2011 18:21

499budgie, a highly intriguing post from someone who is clearly a man on the inside, so it would be most interesting if you could give us a non-technical explanation of how Kellingley's Beeston coal is proving to be of a better quality than the power stations can cope with.

[ivancampo] 25/8/2011 12:24

Wuold expect to see more purchases in the coming days, including new appt.

[jeffian] 25/8/2011 12:21

Nice to see a bit of Director buying too. Not huge amounts, but one of 'em's the FD and they don't put their hands in their pockets too easily!

[499budgie] 25/8/2011 08:03

once they sort out the new contracts with the power stations they will benefit big.....the new face at Kellingley is good coal, the power stations are not used to the quality having to mix ...but Kellingley is flying....when the new contracts have been done and dusted the profits will jump up BIG.
the recovery is well underway and the shares will re-rate.....patience...

[greatwhitefunkmaster] 24/8/2011 08:45

FT Article


UK Coal returns to profit after four years

By William MacNamara in London

UK Coal turned in its first profit since 2007 as an overhaul of the struggling coal miner started to bear fruit.
UK Coal first-half results to June 25 Sales Pre-tax profit Earnings per share Dividend
£256m £22m 7.4p –
↑82% £93m loss 30.7p loss –

The UK's biggest coal producer overcame production stoppages at its deep-level Daw Mill mine in the first six months of the year to increase coal production from 2.7m tonnes to 4.1m tonnes.

The company also achieved higher prices for its coal, as it continued to wind down legacy contracts that are favourable to its power-producing customers but unfavourable to UK Coal.

Average coal sales prices were 20 per cent higher in the interim period than 2010 prices. By 2012 most of the economically unfavourable coal contracts will have been filled, analysts say.

For the six months ending on June 25, the group reported a pre-tax profit of £22m ($36m) compared with a loss of £93m previously and a full-year loss of £125m for 2010. As UK Coal returned to the black after years of losses exceeding £100m, the shares rose 1.3 per cent to 39p despite a fall in the FTSE mining index.

Jonson Cox, the company's executive chairman, said: "Despite this relatively good half year, the group still remains in a challenging financial position. Losses of around £270m over the last three years have left net debt levels over £200m."

After last year's annual loss Mr Cox, a former Anglian Water chief executive, called for a "fundamental overhaul" that included accelerating the sale of UK Coal's landholdings, the value of which has propped up its finances during three lossmaking years.

UK Coal gained £54m from land sales in the first half, with proceeds helping to pay down net debt, which fell from £242m at the end of 2010 to £207m.

Mr Cox warned that the Daw Mill mine's problems were not necessarily over, as geologically complex expansion works continue.

"The greatest risk to group output this year is at Daw Mill as a result of the operational consequences of the change of face, mining through the fault and the impact of discussions surrounding labour terms and conditions," he said.

Group revenues rose from £141m to £256m and earnings per share were 7.4p, against a loss per share of 30.7p last time. There was no interim dividend.

.......................................................................

● FT Comment

Deep-level problems remain at UK Coal, despite the company celebrating its return to profit. Net debt remains 10 times higher than Numis Securities' £20m annual pre-tax profit forecast and its pension deficit widened to £156m. Nonetheless, long-predicted structural improvements are coming to pass including higher coal sales prices and better output. For anyone who thinks these trends may continue, the current multiple of 1.6 times 2012 forecast earnings represents a buying opportunity.

[spob] 24/8/2011 05:01

access denied

care to paste the above article

then again, knowing the FT, it's probably not worth it

[ivancampo] 23/8/2011 21:52

FT Comment:

[warbaby43] 23/8/2011 20:23

UKC shareholders can always use some good news and your very welcome return sure comes into that category RM

[realminer returns] 23/8/2011 19:42

Hello folks, been away too long, infact left altogether, i could not resist the lure of redundancy that was offered to me.
Worry you not, i still have lots of friends still working within the industry.
The results/tonnes etc are still available just might take a little longer to get them.

RM R.

[hvs] 23/8/2011 13:44

ITS BANKRUPT.

[greatwhitefunkmaster] 23/8/2011 12:20

One might hope that a break above 40p might be the last time we see the 30's.

[argylerich] 23/8/2011 11:57

Thanks for the replies. I guess I kind of already knew the answer but wanted to be sure.

Looks like an interesting H2 ahead if Daw Mill problems can be avoided and the moves to un-contracted sales result in higher returns.

The company may then be able to declare that the turning point has been reached and real profitability is on the way.

Here's hoping that the rest of the negotiations go smoothly.

[jacks13] 23/8/2011 11:51

I'm going on the 7:00am headline statement. Apologies, I hadn't looked at the detail.

[jeffian] 23/8/2011 11:42

"From today's statement we can't be sure what has been booked to profit from the sales of property, it will depend on the timing of the accounting entries."

Eh? Seems clear enough from today's Interim statement

"Property related transactions.......are separately disclosed on the face of the Consolidated Income Statement, where material.

Disposals with a net book value of £51.7m were made in the first half, realising net proceeds of £53.8m, of which £34.9m was received in the period."

The Consolidated Income Statement shows they booked a profit on these transactions of £2.105 in the period.

[jacks13] 23/8/2011 11:17

ArgyleRich - 2571 of 2574

From today's statement we can't be sure what has been booked to profit from the sales of property, it will depend on the timing of the accounting entries.

Payment for some recent property sales has not yet have been received. It is also likely that some of the H1 debt repayment was from income received from last year's property disposals.

The CFO will have some discretion as to the timing of how cash movements are booked, although the policy should be consistent.

At least that's my understanding.

[greatwhitefunkmaster] 23/8/2011 10:34

UK Coal swings to profits, but financial position remains challenging
9:42 am by Sergei Balashov



UK Coal managed to reduce its debt by £35 million to £207 million during the first half
UK Coal (LON:UKC) has made "reasonable progress" during the first six months of the year, swinging to profits for the first time in four years as its coal production and revenues climbed.

However, Britain's largest coal producer noted that its financial position still remains "challenging" as it has lost £270 million over the last three years, leaving it with a £207 million debt, down £35 million from end-2010.

"Whilst we are making progress, particularly in tackling historically unreliable production, pension liabilities and rising employment costs, there remains much to do. Most importantly we need, operating safely, to start generating cash from our mining business," said chairman of UK Coal Jonson Cox.

During the period, UK Coal's total revenues jumped from £141.3 million in the same period last year to £256.1 million in the six months to end June as production rose from 2.7 million tonnes to 4.1 million tonnes.

As turnover climbed, the company was able to post a pre-tax profit of £22.1 million compared to a loss of £93.2 million in the first half of 2010.

Property disposals reached £54 million during the first half, representing the majority of all disposals targeted for the whole year. UK Coal said it continues to market "surplus agricultural and other land" to proceed with its debt reduction programme.

Investors welcomed the report as shares in UK Coal climbed 2.5 percent to trade at 39.5 pence in early deals, giving the company a market cap of £118.2 million.

[strutt12] 23/8/2011 10:30

The Group reports an overall pre-tax profit of £22.1m arising from an 81% increase in first half revenues, this is indicative both of higher volumes arising from more reliable mining performance and an increase in average realised sales prices for the first half.

The £54m raised from property of which £P34.9m was received in the period has been applied to our debt.

Hope this answers your question?

[greatwhitefunkmaster] 23/8/2011 10:26

After. Put simply mining needs to continue to improve (better pricing, better production) so that profitability doesn't have to come from land sales. It's looking promising that this will happen, but at the moment that's not the case.

Think the glass is half full now though, a solid set of FY figures and this could multi-bag IMO.

As has been said before, there will doubtless be bumps in the road though!

[argylerich] 23/8/2011 10:02

Is the £22m profit before or after the £54m raised from property sales?