ATH Resources plc
AIM : ATH

ATH Resources plc

June 14, 2005 02:15 ET

ATH Resources plc Interim Results-Tuesday 14 June 2005

LONDON, UNITED KINGDOM--(CCNMatthews - June 14, 2005) - ATH Resources plc ("ATH Resources" or "the Group")(AIM:ATH), one of the UK's largest coal producers, reports its Interim Results for the six months ended 3 April 2005.

Highlights

- Sale of 638,000 tonnes of coal produced turnover of Pounds Sterling 17.1 million

- EBITDA of Pounds Sterling 3.8 million

- Profit before interest and tax totalled Pounds Sterling 1.8 million

- Earnings per share of 3.39 pence per share

- Interim dividend of 3.36 pence per share proposed

- Group's permitted reserve base now risen to 6.6 million tonnes from 2.4 million tonnes at 26 September 2004

Commenting on the Interim Results, Tom Allchurch, Chief Executive of ATH Resources, said: "The last six months have continued the rapid pace of activity set last year. The Group has now secured additional reserves which should enable it to grow production during each of the next 5 years. Recent trading has shown improvement over the same period last year, however severe wet weather during December and January did limit performance.

"With the purchase of the Grievehill and Glenmuckloch sites now completed, and our ongoing commitment to developing the reserve base, ATH Resources will continue to grow in what is an essential constituent of the country's electricity supply industry."



For further information:
ATH Resources

Tom Allchurch, Chief Executive Tel: +44 (0) 1302 760462
tom@ath.co.uk www.ath.co.uk

Seymour Pierce Limited

Sarah Wharry, Corporate Finance Tel: +44 (0) 20 7107 8000
sarahwharry@seymourpierce.com www.seymourpierce.com

Media enquiries:
Abchurch

Henry Harrison-Topham / Sarah Hollins Tel: +44 (0) 20 7398 7702
henry.ht@abchurch-group.com www.abchurch-group.com


Chairman's Statement

The last six months have continued the rapid pace of activity set last year. The Group has now secured additional reserves which should enable it to grow production during each of the next five years. Recent trading has shown improvement over the same period last year, however severe wet weather during December and January did limit performance.

Business progress

As reported in my last Annual Review the Group is focused upon increasing the reserves of the business to secure profitability and growth. In line with this strategy I am pleased to advise that we have applied for an extension to our Skares Road site and a new site at Laigh Glenmuir, gained consent for an extension to our Garleffan site and also concluded the purchase of two new sites from Scottish Coal.

Consequently the permitted reserve base of the Group has increased from 2.4 million tonnes as at 26 September 2004 to 6.6 million tonnes today.

Trading Results

In the six months to 3 April 2005, turnover of Pounds Sterling 17.1 million was achieved on sales of 638,000 tonnes.

EBITDA was Pounds Sterling 3.8 million with operating profit of Pounds Sterling 1.8 million. Earnings per share were 3.39p and the Board is proposing an interim dividend of 3.36p per share payable on 22 July 2005.

The results for the six months, although better than the same period last year, were affected by three factors:

I. The exceptional wet weather over the Christmas holiday and early January, which resulted in Carlisle being flooded, also hit our sites with the excavations being inundated with water. This caused operations to be restricted as the bottom coal seams, which had been exposed prior to the Christmas holiday period ready for lifting, were under water for some weeks.

II. The price of gas oil, which is closely aligned with crude oil, increased substantially. However, wherever possible this extra cost has been passed on to those customers not under contract.

III. Plant availabilities had suffered during the preceding year due to the poor performance of the main supplier of plant to the Group. However, new arrangements have yielded a solution which will now maintain an acceptable level of availability across the plant fleet. In addition, a significant order for new dumptrucks has been placed with an alternative supplier, which will ensure that we operate a modern and cost efficient plant fleet.

Business progress

The Group continues to pursue a number of development prospects which will lead to the submission of further planning applications during the coming six months.

In France drilling has been undertaken at Commentary and will shortly commence at Bertholene in order to assess quality and design parameters of the sites. The development of these sites is being progressed through the planning system with an environment assessment due to commence shortly at Commentary.

Staff

The period since the listing of the Group has been a very busy time and it is only through the hard work and dedication of the employees of the Group that I am able to report on the positive progress that we have achieved in the relatively short time as a plc and for which I am very grateful.

Outlook

With the purchase of the Grievehill and Glenmuckloch sites now completed, and our ongoing commitment to developing the reserve base, ATH Resources will continue to grow in what is an essential constituent of the country's electricity supply industry.

David Port

Chairman

7 June 2005



Consolidated profit and loss account
For the six months ended 3 April 2005


Unaudited Unaudited Audited
six months period period
ended ended ended
3 April 28 March 26 September
2005 2004 2004
Pounds Pounds Pounds
Sterling Sterling Sterling

Turnover 17,099,741 13,455,300 31,390,930

Cost of sales (13,514,538) (12,033,303) (27,267,466)
----------------------------------------

Gross profit 3,585,203 1,421,997 4,123,464


Administrative expenses (1,846,727) (1,500,535) (3,335,071)
Other operating income 39,000 92,172 578,625
----------------------------------------


Operating profit 1,777,476 13,634 1,367,018


Interest payable and
similar charges (333,783) (558,132) (1,115,920)
Interest receivable 13,192 3,347 13,535
----------------------------------------


Profit on ordinary
activities before
taxation 1,456,885 (541,151) 264,633

Tax on profit on
ordinary activities (446,960) (34,252) (174,432)
----------------------------------------

Profit on ordinary
activities after
taxation 1,009,925 (575,403) 90,201
Dividends paid (1,000,278) - -
----------------------------------------



Retained profit for
the period 9,647 (575,403) 90,201
----------------------------------------
----------------------------------------


Earnings per share 3.39p (4.04)p 0.44p
----------------------------------------
----------------------------------------


The profit on ordinary activities before taxation arises from the Group's operations, all of which were acquired on 28 November 2003 and which are continuing.

There are no recognised gains and losses other than as stated in the profit and loss account.



Consolidated balance sheet
As at 3 April 2005


Unaudited Unaudited Audited
as at as at as at
3 April 28 March 26 September
2005 2004 2004
Pounds Pounds Pounds
Sterling Sterling Sterling

Fixed assets
Goodwill 1,709,180 1,906,392 1,807,784
Tangible fixed assets 15,777,187 16,947,511 15,537,095
Investments 2 2 2
---------------------------------------

17,486,369 18,853,905 17,344,881

---------------------------------------
Current assets
Stocks 5,777,314 5,669,112 5,007,841
Debtors 8,982,824 10,292,917 8,115,563
Cash at bank - 960,078 2,525,196

---------------------------------------
14,760,138 16,922,107 15,648,600


Creditors: amounts falling
due within one year (10,001,391) (24,176,448) (11,080,880)
---------------------------------------

Net current assets/
(liabilities) 4,758,747 (7,254,341) 4,567,720
---------------------------------------

Total assets less current
liabilities 22,245,116 11,599,564 21,912,601


Creditors: amounts falling
due after more than one
year (4,228,627) (4,938,000) (4,010,044)


Provisions for liabilities
and charges (6,366,660) (7,136,967) (6,262,090)
----------------------------------------


Net assets 11,649,829 (475,403) 11,640,467
----------------------------------------
----------------------------------------


Capital and reserves
Called up share capital 148,851 100,000 148,851
Share premium account 11,401,415 - 11,401,415
Profit and loss account 99,563 (575,403) 90,201
----------------------------------------


Equity shareholders'
funds 11,649,829 (475,403) 11,640,467
----------------------------------------
----------------------------------------


Consolidated cash flow statement
For the six months ended 3 April 2005

Unaudited Unaudited Audited
six months period period
ended ended ended
3 April 28 March 26 September
Notes 2005 2004 2004
Pounds Pounds Pounds
Sterling Sterling Sterling

Net cash from
Operating
activities 3 2,163,960 5,439,559 8,677,466

Returns on investment
and servicing
of finance
Interest received 13,192 3,347 13,535
Interest paid (149,317) (89,563) (655,513)
Interest element of
finance leases (183,290) (90,575) (274,182)

------------------------------------------
(319,415) (176,791) (916,160)

Taxation paid (330,088) (668,796)

Capital expenditure
Payments to acquire
tangible fixed
assets (357,275) (1,699,400) (514,712)
Receipts from sales of
tangible fixed
assets 242,000 - 575,813

Acquisitions
Net overdraft - (1,626,037) (1,626,037)
Purchase of business (3,125,000) (4,035,000) (5,835,000)

------------------------------------------
(3,240,275) (7,360,437) (7,399,936)

Equity dividends paid (1,000,278) - -

Cash flow before ------------------------------------------
financing (2,726,096) (2,097,669) (307,426)

Financing
Issue of ordinary
shares - 43,750 11,494,016
New secured loan - 3,000,000 3,000,000
Repayment of
secured loans (25,000) (525,000) (3,050,000)
Issue of loan notes - 1,480,530 1,480,530
Repayment of loan
notes - - (7,331,280)
Capital element
of finance
lease payments (1,840,506) (941,533) (2,760,644)

------------------------------------------
(1,865,506) 3,057,747 2,832,622

------------------------------------------
(Decrease)/
increase in
cash 5 (4,591,602) 960,078 2,525,196

------------------------------------------
------------------------------------------


Notes to the interim report
For the six months ended 3 April 2005


1. Preparation of unaudited interim report

The unaudited interim report has been prepared on the basis of the accounting policies set out in the Group's 26 September 2004 statutory financial statements. The interim report was approved by the Board of Directors on 7 June 2005. The figures for the period ended 26 September 2004 have been extracted from the financial statements for that year which have been filed with the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain any statement under Section 237 (2) or (3) of the Companies Act 1985.

The Group has drawn up its accounts for the 27 week period ended 3 April 2005. The prior periods are prepared from the date of incorporation of the Group on 10 October 2003 to the respective period end dates.

Fixed assets have been reclassified such that all mining related assets are now disclosed within tangible fixed assets. There have been no changes to the accounting policies of the Group, and therefore the results for the previous periods have not been altered by this reclassification.

2. Earnings per share

Basic earnings per share is calculated by reference to the weighted average number of ordinary shares in issue during the period of 29,770,176 (28 March 2004: 14,235,294, 26 September 2004: 20,302,635) and the profit after taxation. There is no difference between basic earnings per share and diluted earnings per share.



3. Reconciliation of operating profit to operating cash flows

Unaudited Unaudited Audited
six months period period
ended ended ended
3 April 28 March 26 September
2005 2004 2004
Pounds Pounds Pounds
Sterling Sterling Sterling

Operating profit 1,777,476 13,634 1,367,018

Depreciation charge 1,997,977 2,017,144 5,076,691

Profit on disposal of
fixed assets (20,341) - (88,570)

(Increase)/decrease
in stock (769,473) 1,047,322 1,708,593

Increase in debtors (867,261) (6,770,327) (3,925,856)

Decrease in creditors
and provisions 45,582 9,131,786 4,539,590

-------------------------------------------
Net cash inflow from
operating activities 2,163,960 5,439,559 8,677,466

-------------------------------------------
-------------------------------------------

4. Analysis of net debt

Audited Unaudited
as at Non- as at
26 September Cash cash 3 April
2004 Flow changes 2005
Pounds Pounds Pounds Pounds
Sterling Sterling Sterling Sterling

Cash at bank and
in hand 2,525,196 (4,591,602) - (2,066,406)

-----------

Debt due within
one year (50,000) - - (50,000)

Debt due beyond
one year (344,500) 25,000 - (319,500)

Finance leases and
hire purchase
contracts (5,304,504) 1,840,506 (3,353,850) (6,817,848)

---------
1,865,506

-------------------------------------------------
(3,173,808) (2,726,096) (3,353,850) (9,253,754)

-------------------------------------------------
-------------------------------------------------

5. Reconciliation of net cash flow to movement in net debt

Unaudited Unaudited Audited
six months period period
ended ended ended
3 April 28 March 26 September
2005 2004 2004
Pounds Pounds Pounds
Sterling Sterling Sterling

(Decrease)/increase in
cash in the period (4,591,602) 960,078 2,525,196
Cash inflow from increase
in debt and lease
financing 1,865,506 (3,013,997) 8,661,394

-------------------------------------------
Change in net debt
resulting from
cash flow (2,726,096) (2,053,919) 11,186,590

Net debt acquired with
subsidiary - (4,237,348) (4,237,348)

New debt issued - (5,850,750) (5,850,750)

New finance leases and
hire purchase contracts (3,353,850) (1,471,243) (4,272,300)

-------------------------------------------
Movement in net debt
in the period (6,079,946) (13,613,260) (3,173,808)
Net debt brought forward (3,173,808) - -

-------------------------------------------

Net debt carried forward (9,253,754) (13,613,260) (3,173,808)

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-------------------------------------------


6. Copies of the interim report

Copies of the interim report will be posted to shareholders in due course and are available from the Company's Head Office at: Richmonds House, White Rose Way, Doncaster DN4 5JH.


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