UK COAL PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2004
UK COAL PLC, the coal mining and property group, today announces its interim
results for the six months ended 30 June 2004.
• Operating loss on continuing operations before exceptional items of
£14.2 million (2003: profit of £0.7 million)
• Loss before tax of £5.8 million (2003: loss of £0.8 million)
• Cash outflow, before use of liquid resources financing and dividends, of
£1.9 million (2003: cash inflow £30.3 million)
• Dividend 5.0 pence per share (2003: 5.0 pence per share)
• Sales volumes 7.4 million tonnes (2003: 9.9 million tonnes)
• Deep mine production 6.0 million tonnes (2003: 7.9 million tonnes);
surface mine production 1.2 million tonnes (2003: 1.8 million tonnes)
• Property sales income £1.9 million (2003: £8.3 million); planning
approvals for a further 40 acres
Commenting on the results, Gordon McPhie, Chief Executive of UK COAL, said:
'Production performance was disappointing in the first half year, limiting
sales, and unit costs have increased. The second half performance should improve
with fewer production gaps at the deep mines, and a return to full production at
Kellingley Colliery. We continue to work to mitigate the effect of cost
increases through Project 105 and other initiatives.
'International coal prices have remained high throughout the period and should
be reflected in higher prices in 2005 and beyond. We therefore continue to
invest in improved production equipment and in accessing new reserves at our
deep mines assisted by the Government's Coal Investment Aid programme. In
contrast, the surface mining business is reducing in size through lack of
planning approvals.
'The outlook for the property business remains good and we will continue to
generate added value to our significant property portfolio by obtaining planning
permissions and by development and restoration where appropriate.'
For further information, please contact:
UK COAL PLC
Gordon McPhie, Chief Executive Today : 020 7554 1400
Chris Mawe, Finance Director Thereafter: 01302 751751
Gavin Anderson & Company
Liz Morley 020 7554 1400
Ken Cronin
Stuart Oliver (Operational) 01525 381759
07774 231 178
RESULTS
In the half year to 30 June 2004, the Group sustained an operating loss, on
continuing operations before exceptional items, of £14.2 million (2003: profit
of £0.7 million). The loss is stated after release of provisions of £4.8 million
(2003: £0.3 million). The losses resulted from reduced deep mine operational
performance and gaps in production due to face changes together with industrial
action at Kellingley. However, there was some saving from lower costs at Selby,
which is in its run down phase. As a result, total mining costs were £1.30 per
gigajoule (2003: £1.18 per gigajoule).
After incorporating exceptional items, credits from Coal Investment Aid, profits
on sales of land and buildings and profit on the sale of Gloucester Coal, the
Group reported a loss before tax of £5.8 million (2003: loss of £0.8 million).
First half sales mainly fulfilled existing fixed-priced contracts, leaving
little opportunity to benefit from higher prices. Income for the period was
£1.17 per gigajoule (2003: £1.15 per gigajoule), and is expected to remain
around this level for the rest of the year.
With sales volumes restricted by production, volumes in the first half-year were
limited to 7.4 million tonnes (2003: 9.9 million tonnes).
Cash flow
Cash outflow before use of liquid resources financing and dividends amounted to
£1.9 million (2003: £30.3 million inflow) and was affected by lower sales which
reduced operating earnings before interest, tax, depreciation and amortisation
to £14.7 million (2003: £29.1 million).
Cash was realised from coal stocks which reduced by 0.2 million tonnes (2003:
0.2 million tonnes reduction).
Capital expenditure amounted to £23.7 million (2003: £11.9 million). The Group
received £2.0 million in the period from the Government in respect of Coal
Investment Aid. At the half year, £14.1 million (2003: £nil) remains outstanding
and is included within working capital. This will be received in the second half
year.
Expenditure in respect of redundancy and surface mine restoration was in line
with the prior year and amounted to £14.5 million (2003: £14.0 million).
Property sales generated £1.9 million cash in the period (2003: £8.3 million).
The sale of Gloucester Coal realised £19.8 million.
The detailed cash flow is included in the financial statements.
DIVIDEND
The Board has declared an interim dividend of 5.0 pence per share (2003: 5.0
pence per share) which will be paid on 19 November 2004 to shareholders on the
register on 22 October 2004. In declaring this level of dividend the board has
taken into account cash requirements and the Group's future prospects which will
benefit from higher international coal prices.
UK MINING
Deep Mines
Deep mine production in the period was 6.0 million tonnes (2003: 7.9 million
tonnes). The Selby Complex, which will shortly cease operations, produced 2.1
million tonnes (2003: 1.9 million tonnes) as its planned phased closure
progressed.
As a result of the reduced volumes, offset partly by lower operating costs at
the Selby complex, unit production costs increased to £1.36 per gigajoule (2003:
£1.18 per gigajoule).
Production has improved and output has recently returned to expected levels. New
working arrangements have been agreed at Kellingley and the industrial action
has been withdrawn. A re-invigoration of the Project 105 initiatives is being
implemented to improve operational performance across the business.
Daw Mill is producing around 60,000 tonnes per week, following difficult mining
conditions in 2003. The next panel of coal to be worked will utilise a new set
of face equipment being purchased during 2004, which will reduce the risk of
production gaps from face changes in future years. A seismic survey has now been
completed over the next two faces giving increased confidence in the geology of
the reserves.
We continue to invest in improving mine infrastructure and equipment with
capital purchases for the Group of £23.7 million in the half year (2003: £11.9
million). We are increasing sums expended on seismic and geological mapping
giving increased confidence in the reserves and future mining plans. Further
investment in new mining equipment is planned for the second half of the year at
similar levels to the first half.
Surface Mines
Surface mine output reduced in the period to 1.2 million tonnes (2003: 1.8
million tonnes), with coal recovery being completed at several long term sites.
No new planning approvals were received, in a planning environment that remains
difficult for English operators.
Coal Sales Contracts
UK COAL has agreed heads of terms with Drax Power Ltd, for the supply of almost
14 million additional tonnes of coal over a five-year period. The value of the
contract is linked to international prices, with limits to protect both parties
from extreme fluctuations in price, and will range from almost £400 million to
around £450 million before inflation. These additional deliveries will be phased
in from January next year, with 0.5 million tonnes to be supplied in 2005,
increasing to 4 million tonnes by 2007, and extends to December 2009. Together
with existing contracts, this will result in UK COAL supplying a total of 18
million tonnes to Drax over the five years.
Coal Investment Aid
Applications for £37.5 million of Coal Investment Aid relating to accessing coal
reserves at the Group's ongoing deep mines were approved by the Department of
Trade and Industry. Applications for further Coal Investment Aid have been
submitted in respect of deep mines investment planned for 2005.
EC Large Combustion Plant Directive
The implementation of the Large Combustion Plant Directive aimed at reducing
sulphur emissions from power stations, and other large plant from 2008, has
continued to be the subject of detailed discussion and intensive lobbying. The
Government is continuing to work with Brussels on a solution that meets both the
environmental aims of the directive and the concerns of coal producers and other
industries in the UK.
AUSTRALIA
The sale of the Group's 97% investment in Gloucester Coal Limited (GCL), the
Company's mining activity in Australia, was successfully completed on 2 April
2004.
The price for the sale of UK COAL's 75,572,049 shares in GCL was A$0.69 (28.5p)
per share, resulting in net proceeds after transaction costs of A$47.8 million
(£19.8 million). The consideration was received in cash. A profit on disposal of
£2.5 million is included in the profit and loss account.
GCL incurred a trading loss in the three months prior to the sale of £1.3
million.
PROPERTY
The Group, operating through its property arm, Harworth Estates, continues to
create added value by obtaining new planning permissions to develop its former
mine sites, and by conversion of brownfield sites to land suitable for
development. It is actively managing its property portfolio and agricultural
land holdings. This comprises some 49,000 acres, which was valued in 2002,
before deduction of rehabilitation and aftercare costs, at £174 million £96
million in excess of book value. Surveyors have been instructed to carry out a
property valuation to be published with the full years results.
Development is progressing on the Waverley site near Rotherham. The first phase,
the Waverley Advanced Manufacturing Park, has seen significant progress. The
first new building, constructed by Sheffield University in conjunction with
Boeing, is now occupied.
We are looking at development opportunities on the Selby sites where mining will
shortly cease. Potential tenants have expressed interest in these sites subject
to gaining the required planning consents. Work has also commenced on preparing
and servicing an initial development phase on the former Bilsthorpe Colliery
site in Nottinghamshire, which was granted planning consent this year.
Infrastructure works continue at Tetron Point, the development site in
Derbyshire, where we are currently marketing serviced plots of land for
industrial and distribution users.
Master plans are being drawn up for the development of two former colliery sites
in West Yorkshire.
Property sales for the first six months totalled £1.9 million (2003: £8.3
million). Further sales are under negotiation and are expected to be completed
in the second half year.
Occupation rates of 90% and 58% have been maintained at Asfordby and Whitemoor
Business Parks and have increased to 60% (2003: 34%) at North Selby. These
former mining sites are providing good regeneration opportunities, and, when
fully occupied, will create significant employment opportunities.
BANKING FACILITIES
UK COAL successfully refinanced its £50 million revolving credit facility to be
used for general corporate purposes. The new facility matures in July 2007.
DIRECTORS
We are pleased to welcome Graham Menzies who joined the Board on 1st June 2004
as a non-Executive Director. He is a respected industrialist and UK COAL will
benefit from his strong engineering and operational background and experience in
the management of change.
OUTLOOK
The second half performance should improve with fewer production gaps at the
deep mines, and a return to full production at Kellingley Colliery. We continue
to work to mitigate the effect of cost increases through Project 105 and other
initiatives.
International coal prices have remained high throughout the period and should be
reflected in higher prices in 2005 and beyond. We therefore continue to invest
in improved production equipment and in accessing new reserves at our deep mines
assisted by the Government's Coal Investment Aid programme. The surface mining
business is reducing in size through lack of planning approvals.
We continue to add value to our significant property portfolio by obtaining
planning permissions and by development and restoration where appropriate.
Production - 6 months to 30 June 2004
Deep mines 2004(mt) 2003(mt)
Ongoing mines
Daw Mill 1.4 1.0
Ellington 0.3 0.4
Harworth 0.5 0.5
Kellingley 0.3 0.9
Maltby 0.4 0.8
Rossington 0.2 0.5
Thoresby 0.4 0.9
Welbeck 0.4 0.8
----- -----
Sub total 3.9 5.8
Selby Complex 2.1 1.9
Closed mines Nil 0.2
----- -----
Total Deep Mines 6.0 7.9
Surface mines 1.2 1.8
----- -----
Total Production 7.2 9.7
===== =====
UK COAL PLC
Consolidated profit & loss account
for the six months ended 30 June 2004
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
Notes £'000 £'000 £'000
-------------------- ------- -------- -------- -------
Turnover
- Continuing operations 222,385 286,126 538,221
- Discontinued operations 5,856 13,090 25,633
--------------------- ------- -------- -------- -------
Total turnover 2 228,241 299,216 563,854
Cost of sales before exceptional items (240,210) (294,855) (558,982)
Exceptional items
Net closure and redundancy costs 3,250 (1,349) (1,983)
Amounts recovered against TXU - - 6,467
Provision against other amounts
receivable - (792) (1,681)
--------------------- ------- -------- -------- -------
Exceptional cost of sales 3 3,250 (2,141) 2,803
Total cost of sales (236,960) (296,996) (556,179)
Gross (loss)/profit (8,719) 2,220 7,675
Exceptional item-Coal Investment Aid 4,449 - 3,522
Other operating income and expenses (3,518) (4,847) (11,359)
-------------------------- -------- -------- -------
Total other operating income & expenses 931 (4,847) (7,837)
-------------------------- -------- -------- -------
Operating result on continuing
operations before exceptional items 9 (14,185) 736 (2,495)
Exceptional items 3 7,699 (2,141) 6,325
--------------------- ------- -------- -------- -------
Operating (loss)/profit-continuing
operations (6,486) (1,405) 3,830
Operating (loss)-discontinued operations (1,302) (1,222) (3,992)
-------------------------- -------- -------- -------
Operating loss (7,788) (2,627) (162)
Profit on sale of land and buildings 1,315 5,860 5,830
Profit on sale of subsidiary 12 2,489 - -
--------------------- ------- -------- -------- -------
(Loss)/profit on ordinary activities
before interest and taxation (3,984) 3,233 5,668
Interest receivable and similar income 4 2,726 1,345 3,141
Interest payable and similar charges 5 (1,540) (1,773) (3,486)
Unwinding of discount on provisions 13 (3,049) (3,644) (6,570)
------------------------ ---- -------- -------- -------
Net (1,863) (4,072) (6,915)
interest
Loss on ordinary activities before
taxation (5,847) (839) (1,247)
Taxation 6 - - 5,109
------------------------ ---- -------- -------- -------
(Loss)/profit on ordinary activities
after taxation (5,847) (839) 3,862
Equity minority interest 47 45 138
------------------------ ---- -------- -------- -------
(Loss)/profit for the period (5,800) (794) 4,000
Dividends 8 (7,303) (7,292) (14,591)
------------------------ ---- -------- -------- -------
Loss sustained for the period (13,103) (8,086) (10,591)
------------------------ ---- -------- -------- -------
(Loss)/profit per ordinary share 7 (4.0p) (0.5p) 2.7p
Statement of total recognised gains and
losses for the six months ended 30 June 2004
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
Notes £'000 £'000 £'000
----------------------- ----- -------- -------- -------
(Loss)/profit for the period (5,800) (794) 4,000
Exchange adjustments (1,023) 3,521 4,721
Surplus arising on revaluation of - - 220
tangible property assets ----- -------- -------- -------
-----------------------
Total recognised gains and losses
for the period (6,823) 2,727 8,941
----------------------- ----- -------- -------- -------
Consolidated balance sheet at 30 June 2004
At At At
30-Jun 30-Jun 31-Dec
2004 2003 2003
Notes £'000 £'000 £'000
-------------------------- ----- ------- -------- -------
Fixed assets
Tangible fixed operating assets 367,597 405,897 393,148
Investment properties 6,720 6,500 6,720
Investments - 25 27
-------------------------- ----- ------- -------- -------
374,317 412,422 399,895
Current assets
Stocks 56,226 79,201 59,496
Debtors: amounts falling due after one
year 634 715 637
Debtors: amounts falling due within one
year 97,170 73,891 81,772
Cash at bank and in hand 10 57,431 61,547 60,350
------------------------ ---- -------- -------- -------
211,461 215,354 202,255
------ ------- -------- -------
Total assets 585,778 627,776 602,150
------------------------ ---- -------- -------- -------
Equity shareholders' funds 11 218,123 223,198 222,242
Equity minority interests - 340 262
------------------------ ---- -------- -------- -------
Capital employed 218,123 223,538 222,504
Provisions for liabilities and charges 13 209,892 249,792 226,987
Creditors: amounts falling due after
more than one year 14 12,183 20,500 15,302
Creditors: amounts falling due within
one year 14 145,580 133,946 137,357
------------------------ ---- -------- -------- -------
367,655 404,238 379,646
------------------------ ---- -------- -------- -------
Total funds employed 585,778 627,776 602,150
------------------------ ---- -------- -------- -------
Consolidated cash flow statement
for the six months ended 30 June 2004
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
Notes £'000 £'000 £'000
---------- ---------- -------- ----- -------- -------- -------
Operating activities
Net cash (outflow)/inflow from
operating activities 15 (408) 33,300 46,026
Returns from investments and
servicing of finance
Interest paid (425) (541) (1,171)
Interest paid on hire purchases and
finance leases (714) (809) (1,933)
Financing costs - (63) (203)
Interest received 1,297 1,345 2,577
Inland Revenue interest received - - 564
----------------------- ----- -------- -------- -------
Net cash inflow/(outflow) from
returns on investments and servicing
of finance 158 (68) (166)
Taxation - 393 3,967
Capital expenditure and financial
investment
Development expenditure (3,268) (1,183) (3,778)
Purchase of fixed assets (20,466) (10,687) (15,300)
Receipts from sale of fixed assets 2,742 8,507 10,410
----------------------- ----- -------- -------- -------
(20,992) (3,363) (8,668)
Acquisitions and disposals
Disposal of subsidiary 12 19,800 - -
Cash disposed with sale of
subsidiary (417) - -
Purchase of trade and assets - - (2,076)
Cash (outflow)/inflow before
use of liquid resources (1,859) 30,262 39,083
financing and dividends
Equity dividends paid (7,267) (7,255) (14,521)
----------------------- ----- -------- -------- -------
Cash (outflow)/inflow before use
of liquid resources and financing (9,126) 23,007 24,562
Management of liquid resources
Cash deposited in subsidence
security fund (920) (377) (792)
Cash expended to cover insurance 2,636 2,353 4,471
requirements
Other cash security deposits 590 (1,968) (2,053)
----------------------- ----- -------- -------- -------
Net cash (outflow)/inflow
before financing (6,820) 23,015 26,188
Financing
Issue of ordinary share capital 61 - 128
Drawdown/(repayment) of bank
borrowings 9,073 (22,571) (21,343)
Hire purchase and finance lease
capital repaid (2,864) (3,219) (8,690)
Increase in finance lease debt - 3,437 4,737
----------------------- ----- -------- -------- -------
Net inflow/(outflow) from
financing 6,270 (22,353) (25,168)
----------------------- ----- -------- -------- -------
(Decrease)/increase in cash (550) 662 1,020
----------------------- ----- -------- -------- -------
Notes to the financial statements
for the six months ended 30 June 2004
1 Preparation of interim statements
The interim financial statements have been prepared on the basis of the
accounting policies set out in the Group's 2003 statutory accounts. The interim
financial statements are not statutory accounts for the purposes of S240 of the
Companies Act 1985. The figures for the full year to 31 December 2003 do not
constitute the statutory accounts for the year. They have been abridged from the
statutory accounts which have been filed with the Register of Companies and
contain the auditors' report, which was unqualified and did not contain a
statement under either S237(2) or S237(3) of the Companies Act 1985. The
half-year figures, which are for a 26-week period (2003: 26 weeks), have not
been audited, but have been reviewed by the auditors. The auditors' review
report is included with the interim statements. The Board approved the interim
financial statements on 8 September 2004 .
2 Segmental and geographical analysis
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Turnover
Continuing operations
Coal sales - deep mines 183,190 237,778 447,351
Coal sales - surface mines 25,228 36,221 66,236
-------------------------- -------- -------- -------
UK Mining 208,418 273,999 513,587
Other associated activities 1,940 2,670 3,856
Manufactured fuel and combined heat
and power 9,925 7,692 16,965
Property activities 2,102 1,765 3,813
Discontinued operations
Australia - coal sales 5,856 13,090 25,633
-------------------------- -------- -------- -------
228,241 299,216 563,854
-------------------------- -------- -------- -------
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Geographical analysis by destination
Continuing operations
United Kingdom 217,448 282,835 530,287
Europe 4,937 3,291 7,934
Discontinued operations
Europe - 1,473 1,591
Asia - Pacific 5,856 11,617 24,042
-------------------------- -------- -------- -------
228,241 299,216 563,854
-------------------------- -------- -------- -------
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Profit/(loss) before taxation
Continuing operations :
Coal sales - deep mines (20,826) (252) (8,552)
Coal sales - surface mines 4,221 (1,417) 668
Exceptional items (note 3 ) 7,699 (2,141) 6,325
-------------------------- -------- -------- -------
UK Mining (8,906) (3,810) (1,559)
Other associated activities 182 285 738
Manufactured fuel and combined 78 310 360
heat and power
Emissions trading 1,251 1,368 3,230
Property activities - rentals and
other property income 909 442 1,061
- profit on sales 1,315 5,860 5,830
Discontinued operations
Australia - coal sales (1,302) (1,222) (3,992)
-------------------------- -------- -------- -------
(6,473) 3,233 5,668
Profit on sale of subsidiary -
Australia 2,489 - -
Net interest payable (1,863) (4,072) (6,915)
-------------------------- -------- -------- -------
(Loss) before taxation (5,847) (839) (1,247)
-------------------------- -------- -------- -------
Due to the nature of the Group's business, distribution expenses are treated as
a part of cost of sales.
3 Exceptional items
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Coal Investment Aid 4,449 - 3,522
Net closure and redundancy costs 3,250 (1,349) (1,983)
Amounts recovered against TXU - - 6,467
Provision against other amounts
receivable - (792) (1,681)
------------------------- -------- -------- -------
7,699 (2,141) 6,325
------------------------- -------- -------- -------
4 Interest receivable
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
------------------------- -------- -------- -------
Interest receivable 2,726 1,345 3,141
------------------------- -------- -------- -------
5 Net interest payable and similar charges
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
On hire purchase and finance leases
repayable within 5 years 865 1,048 1,931
Amortisation of loan issue costs 250 184 384
On bank loans, overdrafts and other
loans repayable within 5 years 425 541 1,171
------------------------- ------ ------- ------
1,540 1,773 3,486
------------------------- ------ ------- ------
6 Taxation
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
On ordinary activities
United Kingdom corporation tax at
30% ( 2003: 30% ) - - (1,898)
Adjustment in respect of previous years - - (5,109)
------------------------- -------- -------- -------
Total current tax on ordinary activities - - (7,007)
On exceptional items
United Kingdom corporation tax
at 30% (2003: 30%) - - 1,898
------------------------- -------- -------- -------
Total current tax credit - - (5,109)
------------------------- -------- -------- -------
The tax credit at 31 December 2003 of £5.1 million arose as a result of the
Group reaching agreement with the Inland Revenue on the open issues relating to
prior years.
7 Earnings per share
Earnings per share have been based on the weighted average number of shares in
issue and ranking for dividend being 146,033,889 (June 2003 - 145,847,454: Dec
2003 - 145,887,376)
6 months to 6 months to Year to
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
(Loss)/profit per ordinary share basic (4.0p) (0.5p) 2.7p
diluted (3.9p) (0.5p) 2.7p
----------------------------------------- ------ ------- ------
8 Dividends
The ordinary dividend will be paid on 19 November 2004 to shareholders on the
register on 22 October 2004. The interim report will be circulated to all
ordinary shareholders and will be available at the Company's registered office
at Harworth Park, Blyth Road, Harworth, Doncaster, South Yorkshire, DN11 8DB.
2004 2004 2003 2003
pence per pence per
share £'000 share £'000
Interim 5.00 7,303 5.00 7,292
Final 5.00 7,299
---------------- -------- -------- -------- -------
10.00 14,591
---------------- -------- -------- -------- -------
9 Operating result on continuing operations before exceptional items
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Operating (loss)/profit on continuing
operations (6,486) (1,405) 3,830
Coal Investment Aid (4,449) - (3,522)
Exceptional items (3,250) 2,141 (2,803)
------------------- -------- -------- -------- -------
(14,185) 736 (2,495)
------------------- -------- -------- -------- -------
10 Cash at bank and in hand
30-Jun 30-Jun 31-Dec
2004 2003 2003
£'000 £'000 £'000
Cash deposited to cover insurance
requirements 30,254 35,008 32,890
Subsidence security fund 24,943 23,608 24,023
Other security funds 1,463 1,968 2,053
Other cash balances 771 963 1,384
------------------- -------- -------- -------- -------
57,431 61,547 60,350
------------------- -------- -------- -------- -------
11 Movements in shareholders' funds
6 months to
30-Jun-04
£'000
Shareholders' funds at 1 January 2004 222,242
Loss sustained for the period (13,103)
Goodwill charged to profit and loss account on disposal of
subsidiary 8,470
Accrual for long-term incentive plan liabilities 1,476
Exchange adjustment (1,023)
Ordinary shares issued 1
Premium on shares issued 60
------------------- --------
Shareholders' funds at 30 June 2004 218,123
------------------- --------
12 Disposal of subsidiary
On 2 April 2004, the Group disposed of its Australian operating subsidiary,
Gloucester Coal Ltd, for a cash consideration, net of transaction costs, of
£19,800,000.
£'000
Tangible fixed assets 29,676
Stocks 1,007
Debtors 5,019
Creditors (6,919)
Inter-group loans at date of sale (18,991)
Cash 417
Provisions (1,155)
------------------------ ---------------------
9,054
Less Equity minority interests (213)
------------------------ ---------------------
8,841
Goodwill previously written off to reserves 8,470
------------------------ ---------------------
17,311
Profit on disposal 2,489
------------------------ ---------------------
Cash consideration net of transaction costs 19,800
------------------------ ---------------------
13 Provisions for liabilities and charges
At 1 Jan Created Released Subsidiary Utilised Unwinding At 30 June
2004 in period in period sold in period of discount 2004
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Provisions 226,987 11,605 (10,042) (1,155) (20,552) 3,049 209,892
-------- ------ ------- ------ ------- ------- -------- --------
Provisions released in the period include an exceptional release in respect of
redundancy of £5,195,000.
The Group's liabilities for surface mining restoration reduced by £1,155,000
with the sale of Gloucester Coal Ltd.
14 Creditors
The creditors figures shown in the balance sheet include the following
liabilities:
30-Jun-04 30-Jun-03 31-Dec-03
£'000 £'000 £'000
Creditors: amounts falling due after more
than one year
Hire purchase and finance lease
liabilities 12,021 17,762 15,106
------------------------- -------- -------- --------
Creditors: amounts falling due within one
year
Bank borrowings 16,547 5,936 7,224
Hire purchase and finance lease
liabilities 9,022 7,929 8,801
------------------------- -------- -------- --------
25,569 13,865 16,025
------------------------- -------- -------- --------
15 Reconciliation of operating loss to net cash (outflow)/inflow from operating
activities
6 months to 6 months to Year to
30-Jun-04 30-Jun-03 31-Dec-03
£'000 £'000 £'000
Continuing operations
Operating (loss)/profit (6,486) (1,405) 3,830
Depreciation on tangible fixed assets 22,351 31,567 52,189
Net (credit)/charge for surface mine
development (1,228) 2,837 5,832
and restoration assets
Decrease in coal and other stocks 2,463 980 20,236
(Increase)/decrease in debtors (2,946) 7,180 695
(Decrease ) in creditors (14,233) (7,817) (36,198)
Government contributions to redundancy
payments 5,200 1,800 4,800
------------------------- -------- -------- --------
Net cash inflow from continuing
operations 5,121 35,142 51,384
------------------------- -------- -------- --------
6 months to 6 months to Year to
30-Jun-04 30-Jun-03 31-Dec-03
£'000 £'000 £'000
Discontinued operations
Operating (loss) (1,302) (1,222) (3,992)
Depreciation on tangible fixed assets 159 162 565
Net (credit)/charge for surface mine
development and (1,923) 1,923 1,213
restoration assets
(Increase) in coal and other stocks (220) (1,072) (525)
(Increase) in debtors (2,388) (1,896) (3,546)
Increase in creditors 145 263 927
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Net cash outflow from discontinued
operations (5,529) (1,842) (5,358)
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Total net cash (outflow)/inflow from
operating activities (408) 33,300 46,026
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