ATH keeps producing despite share price fall
ATH Resources, one of the UK’s largest coal producers, has seen an 8% rise in profits and believes it will continue to benefit from higher coal prices but that does not stop chief executive Tom Allchurch being “cheesed off” with its share price.
While the Doncaster-based opencast mining group continues to produce strong figures, its share price has been hit by the stock market freefall and it has decided to “rebase” or cut its final dividend by 6p to 2.64p to allow it to invest more cash in projects including potential contracts to wash coal tips in Queensland, Australia.
In the year to September 28 ATH saw profits before tax and interest up 8% to £11.9m on turnover up 9% to £76.9m on sales of 2m tonnes of coal.
Its average selling price increased by 21% to £38 per tonne and its proven reserves were up 29% to 4.5m tonnes with a further 1.8m tonnes added since the year-end following planning successes.
It has reduced its full year dividend to 6p from 11.6p last year, which, if maintained, said Mr Allchurch, would have offered a 14% yield.
Mr Allchurch said: “I am extremely pleased to be reporting on another year of solid profits growth. The business is starting to benefit from higher coal prices and is continuing to build upon an already healthy base of reserves and long term supply agreements.
“The exciting opportunities for significant growth in our regeneration business are gathering momentum and, for this reason, we have decided to rebase our dividend to allow a greater proportion of the investment required for these projects to be funded from our existing cash resources. I am confident that the Group will continue to deliver significant value to shareholders in the years ahead,” he added.
ATH has recently received planning consent from Nottinghamshire County Council for a 0.5m tonne regeneration project at Langton and expects to get consent from Derbyshire County Council early next year.
Its main opencast mines are in Fife and East Ayrshire in Scotland.
