Losses widen at UK Coal

COAL price falls, geological problems and land depreciation have taken their toll on UK Coal with the firm expected to record a first half pre-tax loss of around £82m.
 
For the same period in 2008 losses were £9.9m.

The mine operator said that as a result of geological factors in its deep mines and increased developments it was expecting its deep mines operation to record a first half operating loss of around £35m – up from £24.2m for the same period 2008.

The subdued property market has also knocked its property division Harworth Estates.

The Doncaster-based coal mining group manages around 46,500 acres through Harworth. Much of this land is on the site of former collieries in Yorkshire and the North East.

However, it is developing a 1,000-acre site at Cutacre, Bolton, part of which is ear-marked for a mixed-use business park.

The firm said that although there had been signs in the past month that the general market was stabilising, the market for redevelopment land was still depressed and valuations had fallen.

Consequently the value of Harworth Estates will have fallen around 9% in the first half resulting in a first half non-cash valuation loss of some £37m.

In a statement the firm said: “In Harworth Estates, we anticipate planning progress at a number of sites in the second half. This should reinforce the underlying momentum for value creation in our property interests.

“We remain unchanged in our view as to the long term value in our property portfolio, notwithstanding shorter term fluctuations in the market.”

Manchester-based Peel Holdings has a 27% stake in UK Coal and is also working with the group on the development of windfarms on its land.