Bisichi Plc - Half-year Report
31 August 2022
This announcement contains inside information for the purposes of Article 7 of the UK Market Abuse Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018
BISICHI PLC
Interim Results for the period ended 30 June 2022
For the six months ending 30th June 2022:
- EBITDA [1]: £22.25million (2021: £1.03million)
- Adjusted EBITDA [2]: £22.24million (2021: £0.74million)
- Profit before tax £21.17million (2021: Loss: £0.7million)
- EPS (basic): 108.29 p (2021: 2.78 p loss)
- The substantial increase in group earnings and cash generation in the first half of the year can be attributed to a very strong performance from the Group’s South African mining and processing operations.
- International coal market conditions continued to improve significantly in first half of 2022 with Group exports to date in line with average export tonnages achieved in 2021.
- Black Wattle’s transition into new mining areas now complete with mining production expected to improve in the second half of 2022.
- In light of the strong results achieved for the first half of the year and the performance of the Group’s South African operations in the second half of the year to date, an interim dividend of 10p declared.
END
For further information, please call:
Andrew Heller/Garrett Casey Bisichi PLC 020 7415 5030
[1] Earnings before Interest, taxation, depreciation and amortisation.
[2] Operating profit before depreciation, fair value adjustments and exchange movements.
Bisichi PLC
Half year review – 30 June 2022
Follow our trading update on 6 June 2022, I am very pleased to report to shareholders that for the half year ended 30 June 2022, your company made a profit before interest, tax, depreciation and amortisation (EBITDA) of £22.25million (2021: £1.03 million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £22.24million (2021: £0.74million).
These unprecedented earnings for the Group can be attributed to a strong performance from Sisonke Coal Processing, the Group’s South African coal processing operation which benefited from significantly higher prices of Free on Board (FOB) coal from Richards Bay Coal Terminal (API4 price). During the period, the weekly API4 price averaged $277 compared to $97 in the first half of 2021 and $151 in the second half the year. Despite constraints in transporting coal for export on the South African rail network, constraints which were largely beyond our control, we were able to take advantage of the improved international coal price by increasing our export sales during the first half of the year to 177,000 metric tonnes, compared to 171,000 metric tonnes in the first half of 2021 and 320,000 metric tonnes overall in 2022.
Results would have been even better if we had not encountered operational delays that impacted our transition into new mining areas at Black Wattle, which in turn impacted adversely our coal production. During the period the mine achieved production of 301,000 metric tonnes compared to 553,000 metric tonnes in the first half of 2021. We are pleased to report that these delays have now been addressed successfully and in July the transition into the new mining areas was completed. Consequently, we expect mining production to recover in the second half of the year to the levels seen in 2021. The increases evident on the balance sheet in our reserves, plant and equipment is mainly attributable to the costs of completing the development of these new mining areas which will be mined throughout the remainder of 2022 and 2023.
Despite the lower coal production from Black Wattle, at Sisonke Coal Processing, we were able maintain our overall levels of coal processed. During the period the Group sold 614,000 metric tonnes (2021: 731,000 metric tonnes) and reported £44.7million in mining revenue (2021: £23.0million) with the higher prices achievable for our coal offsetting the lower overall quantity of coal sold.
Looking forward into the second half of 2022, we are already beginning to see the benefits from the mining of the new areas at Black Wattle. This is mainly due to the higher quality coal being mined which is currently in high demand in both our export and domestic markets. As a result, we are pleased to report that, in the second half of the year to date, we have achieved significant improvements in prices for our coal in the domestic market. In the export market, the API4 price continues to remain at levels similar to the first half of 2022 and exports for the year to date are in line with the average export tonnages we achieved in 2021. However, looking beyond the year to date, uncertainties remain. These are particularly with regard to the sustainability of the higher coal prices in both our markets, as well as the impact of continued constraints in transporting coal for export on the South African rail network.
In addition to our existing mining and processing operations, the Group is searching for new independent mining and renewable energy related opportunities.
In the UK, we have seen rental revenue from our retail property portfolio remain stable in the first half of 2022. Overall, the Group billed revenue from our directly owned property portfolio of £0.56million (2021: £0.59million) during the first half of the year. The Group continues to hold its joint venture development investment in West Ealing, with London Associated Properties PLC and Metroprop Real Estate Ltd. We continue to progress the development and a final decision on whether we will develop this asset ourselves or sell it has yet to be taken.
Finally, in light of the strong results achieved for the first half of the year and the performance of the Group’s South African operations in the second half of the year to date, your directors intend to pay an interim dividend of 10p (2021: Nil) per share. The dividend will be payable on Friday 3 February 2023 to shareholders registered at the close of business on 6 January 2023.
On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work during this extraordinary period.
Sir Michael Heller Andrew Heller
Chairman Managing Director
30 August 2022
Bisichi PLC
Consolidated income statement
For the six months ended 30 June 2022
| Unaudited | Unaudited | Audited | |||
| 6 months ended | 6 months ended | Year ended | |||
| 30 June | 30 June | 31 December | |||
| 2022 | 2021 | 2021 | |||
| Notes | £000 | £000 | £000 | ||
| Group revenue | 1 | 45,399 | 23,639 | 50,520 | |
| Operating costs | (23,937) | (24,238) | (48,184) | ||
| Operating profit on trading activities | 21,462 | (599) | 2,336 | ||
| Decrease in value of investment properties | - | - | 255 | ||
| Gain/(Loss) on investments held at fair value | 49 | (261) | 812 | ||
| Operating profit | 1 | 21,511 | (223) | 3,403 | |
| Share of loss in joint ventures | (1) | (80) | (125) | ||
| Profit before interest and taxation | 21,510 | (303) | 3,278 | ||
| Interest receivable | 39 | 19 | 22 | ||
| Interest payable | (383) | (392) | (799) | ||
| Profit before taxation | 1 | 21,166 | (686) | 2,501 | |
| Income tax | 2 | (5,956) | 272 | (795) | |
| Profit/(Loss) for the period | 15,210 | (414) | 1,706 | ||
| Attributable to: | |||||
| Equity holders of the company | 11,562 | (297) | 1,491 | ||
| Non-controlling interest | 3,648 | (117) | 215 | ||
| Profit/(Loss) for the period | 15,210 | (414) | 1,706 | ||
| Earnings per share - basic | 3 | 108.29p | (2.78p) | 13.96p | |
| Earnings per share - diluted | 3 | 103.63p | (2.78p) | 13.94p | |
Bisichi PLC
Consolidated statement of comprehensive income
For the six months ended 30 June 2022
| Unaudited | Unaudited | Audited | ||
| 6 months ended |
6 months ended |
Year ended |
||
| 30 June | 30 June | 31 December | ||
| 2022 | 2021 | 2021 | ||
| £000 | £000 | £000 | ||
| Profit/(Loss) for the period | 15,210 | (414) | 1,706 | |
| Other comprehensive income/(expenses): | ||||
| Exchange differences on translation of foreign operations | 565 | 6 | (60) | |
| Taxation | - | - | - | |
| Other comprehensive income for the period, net of tax | 565 | 6 | (60) | |
| Total comprehensive income for the period | 15,775 | (408) | 1,646 | |
| Attributable to: | ||||
| Equity shareholders | 12,052 | (292) | 1,439 | |
| Non-controlling interest | 3,723 | (116) | 207 | |
| Total comprehensive income for the period | 15,775 | (408) | 1,646 | |
| Bisichi PLC | ||||
| Consolidated Balance Sheet | ||||
| as at 30 June 2022 | ||||
| Unaudited | Unaudited | Audited | ||
| 30 June 2022 | 30 June 2021 | 31 December 2021 | ||
| Assets | £000 | £000 | £000 | |
| Non-current-assets | ||||
| Value of investment properties | 10,525 | 10,270 | 10,525 | |
| Fair value of head leases | 175 | 201 | 175 | |
| Investment property | 10,700 | 10,471 | 10,700 | |
| Mining reserves, plant and equipment | 14,342 | 9,674 | 9,065 | |
| Investments in joint ventures | 1,130 | 1,174 | 1,130 | |
| Other investments at fair value through profit and loss (“FVPL”) | 6,418 | 2,721 | 3,631 | |
| Total non-current assets | 32,590 | 24,040 | 24,526 | |
| Current assets | ||||
| Inventories | 4,188 | 2,593 | 1,253 | |
| Trade and other receivables | 8,820 | 7,659 | 8,626 | |
| Investments in listed securities held at FVPL | 1,209 | 923 | 685 | |
| Cash and cash equivalents | 5,176 | 3,543 | 3,018 | |
| Total current assets | 19,393 | 14,718 | 13,582 | |
| Total assets | 51,983 | 38,758 | 38,108 | |
| Liabilities | ||||
| Current liabilities | ||||
| Borrowings | (3,929) | (3,995) | (2,666) | |
| Trade and other payables | (9,246) | (12,807) | (10,743) | |
| Current tax liabilities | (1,657) | (1) | (726) | |
| Total current liabilities | (14,832) | (16,803) | (14,135) | |
| Non-current liabilities | ||||
| Borrowings | (3,903) | (4,076) | (3,853) | |
| Provision for rehabilitation | (1,609) | (1,461) | (1,390) | |
| Finance lease liabilities | (400) | (437) | (389) | |
| Deferred tax liabilities | (57) | (200) | (506) | |
| Total non-current liabilities | (5,969) | (6,174) | (6,138) | |
| Total liabilities | (20,801) | (22,977) | (20,273) | |
| Net assets | 31,182 | 15,781 | 17,835 | |
| Equity | ||||
| Share capital | 1,068 | 1,068 | 1,068 | |
| Share premium | 258 | 258 | 258 | |
| Translation reserve | (2,050) | (2,483) | (2,540) | |
| Other reserves | 707 | 707 | 707 | |
| Retained earnings | 28,940 | 16,231 | 18,019 | |
| Total equity attributable to equity shareholders | 28,923 | 15,781 | 17,512 | |
| Non-controlling interest | 2,259 | - | 323 | |
| Total equity | 31,182 | 15,781 | 17,835 | |
Bisichi PLC
Consolidated Cash Flow Statement
For the six months ended 30 June 2022
| Unaudited | Unaudited | Audited | ||
| 30 June | 30 June | 31 December | ||
| 2022 | 2021 | 2021 | ||
| £000 | £000 | £000 | ||
| Cash flows from operating activities | ||||
| Operating profit | 21,511 | (223) | 3,403 | |
| Depreciation | 744 | 1,338 | 2,571 | |
| Unrealised (gain)/loss on investments | (49) | (376) | (812) | |
| Unrealised loss on investment properties | - | - | (255) | |
| Exchange adjustments | 37 | 9 | 121 | |
| Movement in working capital | (4,960) | 2,075 | 397 | |
| Net interest paid | (344) | (383) | (777) | |
| Income tax (paid)/received | (5,554) | (211) | (216) | |
| Cash flow from operating activities | 11,385 | 2,229 | 4,432 | |
| Cash flows from investing activities | (8,680) | (1,395) | (2,706) | |
| Cash flows from financing activities | (1,889) | (142) | (271) | |
| Net increase/(decrease) in cash and cash equivalents | 816 | 692 | 1,455 | |
| Cash and cash equivalents at 1 January | 482 | (1,078) | (1,078) | |
| Exchange adjustment | (51) | (40) | 105 | |
| Cash and cash equivalents at end of period | 1,247 | (426) | 482 | |
| Cash and cash equivalents | ||||
| For the purposes of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts: | ||||
Cash and cash equivalents |
5,176 | 3,543 | 3,018 | |
| Bank overdrafts | (3,929) | (3,969) | (2,536) | |
| Cash and cash equivalents at end of period | 1,247 | (426) | 482 | |
Bisichi PLC
Consolidated statement of changes in shareholders' equity
For the six months ended 30 June 2022
| Share | Share | Translation | Available for sale | Other | Retained | Non- controlling |
Total | ||
| capital | premium | reserve | reserves | reserves | earnings | Total | Interest | Equity | |
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Balance at 1 January 2021 | 1,068 | 258 | (2,488) | - | 707 | 16,528 | 16,073 | 116 | 16,189 |
| Profit for the period | - | - | - | - | - | (297) | (297) | (117) | (414) |
| Other comprehensive income and expense | - | - | 5 | - | - | - | 5 | 1 | 6 |
| Total comprehensive income for the period | - | - | 5 | - | - | (297) | (292) | (116) | (408) |
| Dividend | - | - | - | - | - | - | - | - | - |
| Balance at 30 June 2021 | 1,068 | 258 | (2,483) | - | 707 | 16,231 | 15,781 | - | 15,781 |
| Balance at 1 January 2021 | 1,068 | 258 | (2,488) | - | 707 | 16,528 | 16,073 | 116 | 16,189 |
| Profit for the year | - | - | - | - | - | 1,491 | 1,491 | 215 | 1,706 |
| Other comprehensive income and expense | - | - | (52) | - | - | - | (52) | (8) | (60) |
| Total comprehensive income for the year | - | - | (52) | - | - | 1,491 | 1,439 | 207 | 1,646 |
| Dividend | - | - | - | - | - | - | - | - | - |
| Balance at 31 December 2021 | 1,068 | 258 | (2,540) | - | 707 | 18,019 | 17,512 | 323 | 17,835 |
| Profit for the year | - | - | - | - | - | 11,562 | 11,562 | 3,648 | 15,210 |
| Other comprehensive income and expense | - | - | 490 | - | - | - | 490 | 75 | 565 |
| Total comprehensive income for the period | - | - | 490 | - | - | 11,562 | 12,052 | 3,723 | 15,755 |
| Dividend | - | - | - | - | - | (641) | (641) | (1,787) | (2,428) |
| Balance at 30 June 2022 | 1,068 | 258 | (2,050) | - | 707 | 28,940 | 28,923 | 2,259 | 31,182 |
ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS:
The results for the six months ended 30 June 2022 have been prepared in accordance with International Financial Reporting Standards (IFRS). The principal accounting policies applied are the same as those set out in the Financial Statements for the year ended 31 December 2021, and which will form the basis of the 2022 Annual report.
1. Segmental analysis
For management purposes, the Group is organised into two operating Divisions, Mining and Property. These Divisions are the primary basis on which the Group reports its segment information. This is consistent with the way the Group is managed and with the format of the Group's internal financial reporting.
| Unaudited | Unaudited | Audited | ||
| 30 June | 30 June | 31 December | ||
| 2022 | 2021 | 2021 | ||
| £000 | £000 | £000 | ||
| Revenue | ||||
| Mining | 44,692 | 23,016 | 49,226 | |
| Property | 561 | 594 | 1,119 | |
| Other | 146 | 29 | 175 | |
| 45,399 | 23,639 | 50,520 | ||
| Operating profit/(loss) | ||||
| Mining | 21,055 | (900) | 1,574 | |
| Property | 264 | 275 | 847 | |
| Other | 192 | 402 | 982 | |
| 21,511 | (223) | 3,403 | ||
| Share of profit in joint ventures | (1) | (80) | (125) | |
| Interest receivable | 39 | 9 | 22 | |
| Interest payable | (383) | (392) | (799) | |
| Profit/(Loss) before taxation | 21,166 | (686) | 2,501 |
2. Taxation
| Unaudited | Unaudited | Audited | ||
| 30 June | 30 June | 31 December | ||
| 2022 | 2021 | 2021 | ||
| £000 | £000 | £000 | ||
| Based on the results for the period: | ||||
| Corporation tax at 28.00% (2021: 27%) | 6,425 | 5 | 750 | |
| Deferred taxation | (469) | (276) | 45 | |
| 5,956 | (271) | 795 |
3. Earnings/ (loss) per share
Both the basic and diluted earnings per share calculations are based on a profit of £11,562,000 (2021: loss of £297,000). The basic earnings per share has been calculated on a weighted average of 10,676,839 (2021: 10,676,839) ordinary shares being in issue during the year. The diluted earnings per share has been calculated on the weighted average number of shares in issue of 10,676,839 (2021: 10,676,839) plus the dilutive potential ordinary shares arising from share options of 479,878 (2021: nil) totalling 11,156,717 (2021: 10,676,839).
4. Investment properties
Investment properties are held a fair value at each reporting period. Management evaluate on an ongoing basis the impact of the current economic performance of the UK Retail market on the future performance of the group’s existing UK property portfolio. The Directors have placed a valuation on the properties which is not materially different to the value as at 31 December 2021. Therefore no change in fair value of investment properties has been made during the period. Investment properties are therefore included at a Director’s valuation which is considered to be the fair value as at 30 June 2022. Please refer to page 73 to 75 of the 2021 Annual report and Accounts for details on the valuation of investment and development properties as at 31 December 2021.
5. Related Parties
The related parties and the nature of costs recharged are as disclosed in the Group's annual financial statements for the year ended 31 December 2021. The Group paid management fees of £100,000 (30 June 2021: £100,000 December 2021: £200,000) to London & Associated Properties PLC, an associated company.
6. Financial information
The above financial information does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The figures for the year ended 31st December 2021 are based upon the latest statutory accounts, which have been delivered to the Registrar of Companies; the report of the auditors on those accounts was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006.
As required by the Disclosure and Transparency Rules of the UK's Financial Conduct Authority, the interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) and in accordance with both IAS 34 'Interim Financial Reporting' as adopted by the United Kingdom and the disclosure requirements of the Listing Rules.
The half year results have not been audited or subject to review by the company's auditors.
The annual financial statements of Bisichi PLC are prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The same accounting policies are used for the six months ended 30 June 2022 as were used for the year ended 31 December 2021.
The assessment of new standards, amendments and interpretations issued but not effective, are not anticipated to have a material impact on the financial statements.
The largest areas of estimation and uncertainty in the interim financial statements are in respect of:
- Life of mine and reserves;
- Depreciation;
- Provision for rehabilitation (relating to environmental rehabilitation of mining areas);
- Impairment; and
- The valuation of investment and development properties
Property, plant and equipment representing the group’s mining assets in South Africa are reviewed for impairment where there is evidence of a material impairment. The impairment test indicated significant headroom as at 31 December 2021 and no impairment was considered appropriate. The directors have used similar key assumptions and estimates as outlined on page 62 of the 2021 Annual report and Accounts, and no impairment was considered appropriate as at 30 June 2022.
Other areas of estimation and uncertainly are referred to in the Group's annual financial statements. There have been no significant changes to the basis of accounting of key estimates and judgements as disclosed in the annual report as at 31 December 2021.
The interim financial statements have been prepared on the going concern basis. Cashflow forecasts demonstrate that the group has adequate resources to continue in operational existence for the foreseeable future and is well placed to manage its business risks.
7. Dividend
The final dividends in respect of 2021, totalling £641,000 was approved by the shareholders at the Annual General Meeting held on the 16th June 2022 and were paid on the 29th July 2022. The final dividends in respect of 2022 are included as a liability in these interim financial statements. A proposed interim dividend for the year ended 31 December 2022 totalling £1,067,684 (2021: Nil) was approved by the Board of Directors on 30 August 2022 and has not been included as a liability in these Interim Financial Statements.
8. Principal risks and uncertainties
The Group has an established risk management process which works within the corporate governance framework as set out in the 2021 Annual Report and Accounts. Risks and uncertainties identified by the Group are set out on page 11 of the 2021 Annual Report & Accounts and are reviewed on an ongoing basis. There have been no significant changes in the first half of 2022 to the principle risks and uncertainties as set out in the 2021 Annual Report & Accounts.
Risks faced by the business are assessed by the Board on an ongoing basis. Strategies for mitigating the risks have been defined and specific measures for achieving these are already underway. These include the measures outlined in the Chairman’s Statement, Mining Review and Financial Review & Performance sections of the 2021 Annual report and Accounts.
The principal risks as stated in the 2021 Annual Report & Accounts reflect the challenging environment in which the business operates and are considered under the following broad headings:
Mining:
- Coal price and volume risk
- Mining risk
- Currency risk
- New reserves and mining permissions
- Power supply risk
- Flooding risk
- Environmental risk
- Health & safety risk
- Labour risk
- Cashflow
Property:
- Property valuation
- Economic performance of United Kingdom
- Covid-19
- Geo-political events in Ukraine
- Brexit
9. Board approval
These interim results were approved by the Board of Bisichi PLC on 30 August 2022.
DIRECTORS RESPONSIBILITY STATEMENT AND REPORT ON PRINCIPAL RISKS
AND UNCERTAINITIES
Responsibility Statement
We confirm to the best of our knowledge:
(a) the condensed set of financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU;
(b) the interim management report includes a fair review of the information required by:
(1) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(2) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during the period; and any changes in the related party transactions described in the last annual report that could do so.
This report contains forward-looking statements. These statements are based on current estimates and projections of management and currently available information. Future statements are not guarantees of the future developments and results outlined therein. Rather, future developments and results are dependent on a number of factors; they involve various risks and uncertainties and are based upon assumptions that may not prove to be accurate. Risks and uncertainties identified by the Group are set out on page 11 of the 2021 Annual Report & Accounts. We do not assume any obligation to update the forward-looking statements contained in this report.
Michael Heller Andrew Heller
Chairman Managing Director
30 August 2022
DIRECTORS AND ADVISERS
Directors Sir Michael A Heller MA, FCA (Chairman)
Andrew R Heller MA, ACA (Managing Director)
Robert Grobler PR Cert Eng (Mining Director)
Garrett Casey CA (SA) (Finance Director)
Christopher A Joll MA (Non-executive)
John A Sibbald BL (Non-executive)
John Wong ACA, CFA (Non-executive)
Secretary & Registered office Garrett Casey CA (SA)
12 Little Portland Street
London W1W 8BJ
Black Wattle Colliery - Directors Andrew Heller (Managing Director)
Garrett Casey (Finance Director)
Ethan Dube (Commercial Director)
Robert Grobler (Mining Director)
Millicent Zvarayi
Registrars and transfer office Link Group
Shareholder Services
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International Telephone: +44 (0) 371 664 0300
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Company registration number 112155 (Incorporated in England and Wales)
Web site www.bisichi.co.uk
E-mail admin@bisichi.co.uk
