UK Coal optimistic as Warwickshire yields rise
UK Coal is cautiously optimistic about the future after recording strong production figures for the third quarter and is preparing to appoint a new executive chairman.
The group said it remained on track for around 6m tonnes to be extracted from deep mine operations during the full year, while surface tonnage is likely to be around 1.5m.
Shares were steady in early trading, up almost 4%.
The company saw like-for-like deep mine production rise 40% in the last three months with Daw Mill in Warwickshire again proving the most productive pit. Daw Mill and Thoresby both delivered yields above expectations, while Kellingley is working its way towards improved conditions.
Surface mine output grew by two thirds as the new Potland Burn and Park Wall North operations came on stream.
Work has also started on the new Huntington Lane surface mine near Telford. The start-up follows delays in obtaining full planning consent. UK Coal said while soil stripping and other preparatory works are under way, the start of coaling would depend upon the weather conditions over the next few weeks.
The delay is likely to reduce surface mine production meaning full year yields could come in under target.
Its property division has received planning permission for 150 homes in South Normanton and is expecting a further decision on plans for a major residential, retail and industrial development in North Nottinghamshire by the end of the year.
The company has accepted offers on 5,000 out of 8,000 acres of agricultural land it is looking to sell which are expected to generate more than £24m. Offers have been received on a further 2,000 acres.
Debts at the firm at the end of September were £265m, up £40m from the same point last year although UK coal expects its property sales and fourth quarter performance to make inroads into that.
“Overall, with Q3 showing a small operating profit, mining output starting to show more consistent performance, and our asset sales on track, we remain cautiously optimistic about the remainder of 2010 and 2011,” it said in an interim management statement.
On its hunt for an executive chairman, announced in July, the company said the board expected to make an announcement “in the near future”.
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