Half-yearly Report – London Stock Exchange

27 August 2015

BISICHI MINING PLC

Interim Results for the period ended 30 June 2015

For the six months ending 30th June 2015:

    • Group Revenues:  £13.879 million           (2014: £12.313 million)
    • EBITDA:                  £1.232 million            (2014: £1.077 million)
    • EPS (basic):            2.56p                        (2014: Loss: 0.26p)
    • EBITDA increased 14% over H1 2014 despite depressed international coal price
    • Total production for first 6 months up 21% to 838,000 metric tonnes
    • Continuing focus on control of costs and production at Black Wattle Colliey
    • Physical demand for Black Wattle coal remains strong despite historically low international coal prices
    • UK property portfolio performing well with voids across the portfolio at only 2.3% (2014: 2.9%.

END

For further information, please call:

Andrew Heller/Garrett Casey
Bisichi Mining PLC
020 7415 5030

Bisichi Mining PLC

Half year review – 30 June 2015

For the six month period ending on 30 June 2015, Bisichi Mining achieved earnings before interest, tax, depreciation and amortisation of £1.232million (2014: £1.077 million).

In an environment where we have seen coal prices continue to weaken, to a significant extent these earnings have been achieved due to the continued focus by your management in London and at Black Wattle Colliery, our direct coal mining asset in South Africa, on keeping cost of production low and ensuring adequate levels of production are achieved.

In 2015 to date, although demand for our coal has remained strong, international coal prices have continued to weaken. At the beginning of 2014, the average weekly price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4) was US$85. By the end of last year the price had weakened to under US$64. Further weakness in 2015 has seen the coal price go below US$55, less than half the price of US$120 achieved in 2011. A depreciation in the South African Rand against the US Dollar has helped to offset partially this decline. We believe that we can best continue to counter the adverse impact of lower international coal prices through a continuation of our existing management strategy.

As part of Black Wattle’s production plan for the year, the mine has combined production from its existing reserves with coal received from the new reserve at Blue Nightingale, with total production for the first six months of the year of 838,000 metric tonnes (2014: 690,000 metric tonnes). As previously reported, the coal from the new reserve is delivered under an agreement with Blue Nightingale, a South African black owned and managed mining company.

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.

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 2.3% (2014: 2.9%).

Your directors intend to pay an interim dividend of 1p per share which will be paid on the 5 February 2016, to shareholders on the register at the close of business on 8 January 2016.

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
27 August 2015

 

Bisichi Mining PLC
Consolidated income statement
for the six months ended 30 June 2015

Unaudited Unaudited Audited
6 months ended 6 month
ended
Year
ended
30 June 30 June 31 December
2015 2014 2014
Notes  £000 £000  £000
Group revenue 1           13,879 12,313            26,500
Operating costs         (13,450) (12,858)           (25,049)
Operating profit/(loss) on trading activities          429 (545)             1,451
Decrease in value of investment properties                  –                    (6)
(Decrease)/Increase in value of other investments (1) (1) 1
Gains/(Loss) on held for trading investments                    – 4                    (82)
Operating profit/(loss) 1           428 (542)             1,364
Share of profit in joint ventures                  100 285                  563
Profit/(Loss) before interest and taxation           528 (257)             1,927
Interest receivable                  124 157                 234
Interest payable              (245) (188)               (593)
Profit/(Loss) before taxation 1           407 (288)             1,568
Income tax 2               (87) 159                 (365)
Profit/(Loss) for the period           320 (129)             1,203
Attributable to:
Equity holders of the company             273 (28) 1,103
Non-controlling interest              47 (101)                100
Profit/(Loss) for the period           320  (129)             1,203
Earnings/(Loss) per share – basic 3 2.56p (0.26p) 10.33p
Earnings/(Loss) per share – diluted 3 2.56p (0.26p) 10.23p

Bisichi Mining PLC
Consolidated statement of comprehensive income
for the six months ended 30 June 2015

Unaudited Unaudited Audited
6 months
ended
6 months
ended
Year
ended
30 June 30 June 31 December
2015 2014 2014
 £000  £000  £000
Profit/(Loss) for the period 320     (129)      1,203
Other comprehensive income:
Exchange differences on translation of foreign operations        (217)        (135)          (121)
Transfer of gain on available for sale investments 56
Loss on available for sale investments (28)
Taxation 6 (15)
Other comprehensive income for the period, net of tax     (239)     (135)         (80)
Total comprehensive income for the period     81 (264)         1,123
Attributable to:
Equity shareholders     58 (149)         1,036
Non-controlling interest        23 (115)          87
Total comprehensive income for the period     81 (264)         1,123

 

Bisichi Mining PLC
Consolidated Balance Sheet
 as at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Assets £000 £000 £000
Non-current-assets
Value of investment properties  attributable to the group 11,620 11,576 11,575
Fair value of head leases       195       196       195
Investment property 11,815 11,772 11,770
Reserves, plant and equipment 6,159 6,212 6,064
Investments in joint ventures 2,909 3,520 2,898
Loan to joint venture 1,029 984 1,040
Other investments       151       153       152
Total non-current assets  22,063  22,641  21,924
Current assets
Inventories 1,394 1,130 1,760
Trade and other receivables 8,496 7,792 6,860
Corporation tax recoverable 31 33 35
Available for sale investments 768 826 796
Cash and cash equivalents    2,789    1,232    2,838
Total current assets  13,478  11,013   12,289
Total assets  35,541  33,654  34,213
Liabilities
Current liabilities
Borrowings (3,115) (8,173) (2,139)
Trade and other payables (5,738) (6,315) (4,986)
Current tax liabilities       (23)       (2)            (23)
Total current liabilities  (8,876)  (14,490)  (7,148)
Non-current liabilities
Borrowings (5,957) (49) (6,013)
Provision for rehabilitation (919) (878) (930)
Finance lease liabilities (195) (196)  (195)
Deferred tax liabilities   (2,210)   (1,704)   (2,208)
Total non-current liabilities   (9,281)   (2,827)   (9,346)
Total liabilities (18,157) (17,317) (16,494)
Net assets     17,384    16,337     17,719
Equity
Share capital 1,068 1,064  1,068
Share premium 258 249 258
Translation reserve (1,870) (1,690) (1,677)
Available for sale reserves 19 41
Other reserves 663 626  652
Retained earnings  16,819  15,844  16,973
Total equity attributable to equity shareholders  16,957  16,093   17,315
Non-controlling interest        427           244          404
 Total equity    17,384    16,337    17,719

Bisichi Mining PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2015

Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
 £000  £000  £000
Cash flows from operating activities
Operating profit/(loss) 428 (542)             1,364
Depreciation 704 1,334              2,682
Unrealised (gain)/loss on investments held for trading (4)                 82
Unrealised loss/(gain) on other investments 1 1 (1)
Unrealised loss on investment properties 6
Share based payment expense 11 39                    65
Share of profit of joint venture 88
Increase in working capital (865) (515)               (506)
Net interest paid (79) (31)               (272)
Income tax paid               (14)
Cash flow from operating activities 288 282               3,406
Cash flows from investing activities (1,202) (764)             (1,903)
Cash flows from financing activities (218) (229)              488
Net decrease in cash and cash equivalents (1,132) (711)             1,991
 Cash and cash equivalents at 1 January 719 (1,322)             (1,322)
 Exchange adjustment 95 97                  50
 Cash and cash equivalents at end of period (318) (1,936)              719
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 2,789 1,232              2,838
Bank overdrafts (3,107) (3,168)             (2,119)
Cash and cash equivalents at end of period (318) (1,936)              719

Bisichi Mining PLC
Consolidated statement of changes in shareholders’ equity
for the six months ended 30 June 2015

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 2014 1,064 249 (1,569) 587 16,297 16,628 359 16,987
Loss for the period (28) (28) (101) (129)
Other comprehensive income and expense (121) (121) (14) (135)
Total comprehensive  income  for the period (121) (28) (149) (115) (264)
Dividend (425) (425) (425)
Equity share options 39 39 39
Balance at 30 June 2014 1,064 249 (1,690) 626 15,844 16,093 244 16,337
Balance as at 1 January 2014 1,064 249 (1,569) 587 16,297 16,628 359 16,987
Revaluation of investment properties (6) (6) (6)
Other income statement movements 1,109 1,109 100 1,209
Profit for the year 1,103 1,103 100 1,203
Other comprehensive income and expense (108) 41 (67) (13) (80)
Total comprehensive  income  for the year (108) 41 1,103 1,036 87 (1,123)
Dividend (427) (427) (42) (469)
Share issues 4 9 13 13
Equity share options 65 65 65
Balance at 31 December 2014 1,068 258 (1,677) 41 652 16,973 17,315 404 17,719
Profit for the year 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

ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:

The results for the six months ended 30 June 2015 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 2014.

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
2015 2014 2014
 £000  £000  £000
Revenue
Mining 13,377 11,763             25,536
Property 488 526              931
Other 13 24 33
13,878 12,313 26,500
Operating profit/(loss)
Mining 286 (877)                    721
Property 131 310 693
Other 11 25 (50)
428 (542)               1,364
Share of profit in joint ventures 100 285 563
Interest receivable 124 157 234
Interest payable (245) (188) (593)
Profit/(Loss) before taxation 407 (288) 1,568

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 20.5% (2014: 23.5%) 2             16
Prior year adjustment – UK              20
2 36
Deferred taxation 85 (159) 305
Prior year adjustment – UK 24
87 (159) 365

3.          Earnings per share
Both the basic and diluted earnings per share calculations are based on a profit of £273,000 (2014: loss: £28,000). The basic earnings per share has been calculated on a weighted average of 10,676,839 (2014: 10,636,839) 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 (2014: 10,636,839) plus the dilutive potential ordinary shares arising from share options of nil (2014: nil) totalling 10,676,839 (2014: 10,636,839). In 2014, dilutive potential ordinary shares of 159,648 were excluded from the calculation of diluted ordinary shares as there was no dilutive effect due to the loss for the period.

4.         Investment properties
Investment properties are included at valuation as at 31 December 2014 plus additions in the period ended 30 June 2015.

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 2014. The group paid management fees of £68,750 (30 June 2014: £68,750 31 December 2014: £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 2014 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 2015 as were used for the year ended 31 December 2014.

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 largest areas of estimation and uncertainty in the interim financial statements are in respect of:
– The valuation of investment properties (which are not re-valued at the half year end unless there is evidence of a material change in valuation);
– Depreciation and;
– Provision for rehabilitation (relating to environmental rehabilitation of mining areas)

Other areas of estimation and uncertainly are referred to in the group’s annual financial statements.

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 2014, totalling £107,000 was paid on the 6th of February 2015. The final dividend in respect of 2014, totalling £320,000 was approved  by the shareholders at the Annual General Meeting  held on the 10th June 2015 and was paid on the 31st July 2015. The final dividend in respect of 2014 is included as a liability in these interim financial statements.

A proposed interim dividend for the year ended 31 December 2015 totalling £107,000 was approved by the Board of Directors on 27th August 2015 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 2014 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 10 of the 2014 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2015 to the principle risks and uncertainties as set out in the 2014 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
– Coal qualities
– Currency movements
– Regulatory requirements & permissions
– Transport
– Power supply
– Flooding
– Environment
– Labour

Property:
– Property valuation
– Occupancy

9          Board approval

These interim results were approved by the Board of Bisichi Mining on 27th August 2015.

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.

Michael Heller                                                                                       Andrew Heller
Chairman                                                                                              Managing Director
27 August 2015

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)
C A Joll  MA  (Non-executive)
John A Sibbald  MA (Non-executive)

Secretary & Registered Office:
Garrett Casey CA(SA)
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 0871 664 0300
(Calls cost 10p per minute + network extras)
or +44 203 728 5000 for overseas callers

Website:
www.capitaassetservices.com

E-mail: ssd@capitaregistrars.com

Company registration number
112155 (Incorporated in England and Wales)

Web site:
www.bisichi.co.uk
E-mail:
admin@bisichi.co.uk