UK Coal digs deep for profits as debt remains high
UK COAL said today it has made “reasonable progress” in the first half of the year as it saw a rise in turnover and profit.
For the six months to June 25, the Doncaster-based firm said production has improved and revenues over the period have increased 81% to £256.1m from £141.3m in the corresponding period last year.
Pre-tax profits have increased to £22.1m from a £93.2m loss in the first six months of 2010.
Nevertheless, debt levels remain high and the company, which operates Daw Mill colliery in Warwickshire, said its strategic recovery plan was under way and it had made encouraging progress to date.
Property sales were above plan, the company said, with £54m sold in the first half, while total debt reduced by £35m, funded by receipts from property disposals.
Jonson Cox, UK Coal chairman, said: “This set of results marks my first six months as chairman. I am pleased to report on reasonable progress.
“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. 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. Coal still supplies around 30% of the fuel for the nation’s electricity. UK Coal has a vital role to play supplying about half of indigenous coal production.”
He added: “Our focus over the next period is to continue the work towards securing a future which is in the best interests of all stakeholders. Delivering our strategic recovery plan is necessary to ensure the viability of the business. This plan requires the support and cooperation of the entire workforce; an essential element of the group’s future.”
