RNS Number:7279P
Anglo Pacific Group PLC
12 September 2003
Anglo Pacific Group PLC
Interim Report for the six months ended 30th June 2003
CHAIRMAN'S REVIEW
RESULTS
I am pleased to report that our coal royalty interests are now valued at #38.8
million as of June 2003 which is over #10 million more than the valuation at
31st December 2002.
Our cash and mining operational interests and quoted stakes in gold, diamond and
PGM projects were valued at 30th June 2003 at circa #7.6 million and currently
show a healthy unrealised profit over book value.
We will announce our interim dividend in November 2003.
Following reduced royalty receipts from our Australian coal mining interests,
Group profits before tax for the six months ended 30th June 2003 were #1,738,000
compared to #2,900,000 for the same period last year. Profits after tax were
#1,245,000 compared to #1,979,000 with earnings per share for the half year of
1.42p compared to 2.27p.
Our coal royalty is shared with the Queensland Government and recent output has
been mainly from the Crown's area of the coal deposit rather than the privately
owned area. This accounts for the drop in our coal royalty receipts over the
last six months. Mining will be more from the privately owned ground later this
year.
OPERATIONAL REVIEW
COAL ENERGY INTERESTS
Coal royalties from the two mines in Queensland, Australia, were #1.88 million,
(2002 #3.3 million).
The independent valuation of the coal royalty in June 2003, based on a net
present value of the pre-tax cashflow discounted at a rate of 7%, was #38.8
million (A$95.4 million) compared to #28.7 million (A$81.4 million) at 31st
December 2002. At present the net royalty income is taxed in Australia at 30%.
We have increased our holdings of Canadian coal deposits and coal bed methane
interests.
GOLD, DIAMOND AND PLATINUM GROUP METALS
Amongst other mining interests, the Company still has substantial stakes in
Kirkland Lake Gold and Platinum Australia.
Kirkland Lake is now in production which has been reflected in a sharp rise in
its market capitalisation.
Platinum Australia recently announced the postponement of the start of mining at
its Panton project in Western Australia due to lower palladium prices and the
strong Australian dollar. Despite this setback, we continue to be positive about
this project and have been increasing our holding at the lower levels.
More information on these projects and our other mining interests can be found
on the Group's website at www.anglopacificgroup.com .
OUTLOOK
Output from Queensland's coal deposits is at record levels and the outlook for
prices for coking and steaming coal remains encouraging after recent rises. This
is reflected in the increased valuation of our coal royalty and the continued
high output from the two mines operated by BHP Billiton and Rio Tinto.
With the recent strong dollar and higher gold price, the Board remains confident
in its strategy of acquiring further stakes in gold, diamond and PGM projects
that can lead to capital appreciation and increased royalty flows for the Group.
The Board's strategy is to pay a proportion of its royalty cashflow as dividends
to shareholders whilst endeavouring to make full use of its substantial tax
losses.
P.M.Boycott
Chairman
12th September 2003
Anglo Pacific Group PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30th JUNE 2003
6 months to 6 months to Year to
June 2003 June 2002 Dec. 2002
#'000 #'000 #'000
Turnover
Continuing operations 1,874 3,284 5,802
Discontinued operations 0 123 142
1,874 3,407 5,944
Cost of sales
Discontinued operations 0 -144 -169
0 -144 -169
Gross profit 1,874 3,263 5,775
Continuing operations
Administrative expenses -419 -419 -733
Profit on disposal of 158 0 7
investments
Other operating income 56 46 120
Operating profit from 1,669 2,911 5,196
continuing operations
Discontinued operations
Administrative expenses 0 -47 -57
Operating loss from 0 -68 -84
discontinued operations
Total operating profit 1,669 2,843 5,112
Profit on disposal of 0 0 75
subsidiaries
Net interest received 69 57 148
Write down of assets 0 0 -144
Profit on ordinary activities 1,738 2,900 5,191
before tax
Taxation on ordinary -493 -921 -1,631
activities
Profit for the financial 1,245 1,979 3,560
period
Dividends 0 -1,525
Retained profit for the 1,245 1,979 2,035
financial period
Earnings per share 1.42p 2.27p 4.09p
Fully diluted earnings per 1.42p 2.22p 4.03p
share
STATEMENT OF CONSOLIDATED RETAINED PROFITS
#'000 #'000 #'000
At 1 January - Balance b/fwd 4,553 -6,170 -6,170
Capital reconstruction 0 0 9,320
Tfr to Special Reserve 0 0 -632
Profit for the period 1,245 1,979 2,035
Balance c/fwd 5,798 -4,191 4,553
Anglo Pacific Group PLC
CONSOLIDATED BALANCE SHEET
As at 30th June 2003
30th June 2003 31st December
2002
#'000 #'000 #'000 #'000
Fixed assets
Tangible assets 838 839
Coal royalties (at valuation) 28,713 28,713
Other investments (at cost) 4,013 2,910
33,564 32,462
Current assets
Debtors 1,094 1,091
Cash at bank and in hand 2,458 3,766
3,552 4,857
Current liabilities
Taxation -495 -823
Creditors - amounts falling due -248 -125
within one year
Dividends payable -569 -1,525
Net current assets 2,240 2,384
Total assets less current 35,804 34,846
liabilities
Creditors - amounts falling due
after more than one year
Deferred Tax -114 -411
-114 -411
35,690 34,435
Capital and reserves
Share capital 1,749 1,749
Share premium 420 420
Revaluation reserve 27,000 27,000
Foreign currency translation 91 81
reserve
Special reserve 632 632
Profit and loss account balance 5,798 4,553
Equity shareholders' funds 35,690 34,435
Notes
1. Fixed asset investments
(a) Coal Royalty Investments
#000's
At 1st January 2003 and 30th June 2003 28,713
The Group's coal royalty investments comprise the Kestrel and Crinum
coal royalties.
The Company commissioned a valuation of the coal royalties in June 2003,
based on a net present value of the pre-tax cashflow discounted at a
rate of 7%, which produced a valuation of #38.8 million (A$95.4
million), a surplus of #10.1 million over the book amount. At present
the net royalty income is taxed in Australia at a rate of 30%. Were the
coal royalties to be realised at the revalued amount there are #12.3
million (A$30.4 million) of capital losses potentially available to
offset against taxable gains.
Neither the revalued amounts nor the related potential tax liabilities
are incorporated in the accounts.
(b) Other investments
#000's
At 1st January 2003 2,910
Additions 1,594
Disposals (491)
At 30th June 2003 4,013
Quoted investments 3,941
Unquoted investments 72
4,013
The market value of the quoted investments at 30th June 2003 was
#5,223,000. The directors' valuation of the unquoted investments was
#72,000.
3. Basis of preparation
These unaudited accounts, which do not constitute statutory accounts
have been prepared using accounting policies set out in the Group's 2002
statutory accounts. The financial statements have been subject to a
review by the Group's auditors. The 2002 accounts received an
unqualified auditors' report and have been delivered to the Registrar of
Companies.
4. Earnings per ordinary share
The earnings per ordinary share is calculated on the Group's profit
after tax of #1,245,000 and 87,462,955 shares. Fully diluted earnings is
calculated on a profit after tax of #1,261,000 and 88,873,944 shares.
This statement will be sent to shareholders and will be available at the
Company's registered office at 29 Albemarle Street, London W1S 4JB.
Anglo Pacific Group PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30th JUNE 2003
Year ended
Six months Six months 31st
ended 30th ended 30th December
June 2003 June 2002 2002
#'000 #'000 #'000
Net cash inflow from operating 1,644 1,821 5,029
activities
Interest received (less paid) 69 57 148
Overseas tax paid -1118 -477 -995
Capital expenditure and -947 -649 -2986
financial investment
Disposal of a subsidiary 0 0 268
Equity dividends paid -956 0 0
Net cash inflow before -1,308 752 1,464
financing
Net cash inflow from 0 0 90
financing
(Decrease) / increase in -1,308 752 1,554
cash
RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOW
Year ended
Six months Six months 31st
ended 30th ended 30th December
June 2003 June 2002 2002
#'000 #'000 #'000
Operating profit 1,669 2,843 5,112
Depreciation 3 22 30
(Gain) on sale of tangible -158 -13 -7
fixed assets
Net decrease / (increase) in 130 -1031 -106
working capital
1,644 1,821 5,029
INDEPENDENT REVIEW REPORT TO ANGLO PACIFIC GROUP PLC
Introduction
We have been instructed by the company to review the financial information set
out on pages 2 to 6 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules
of the Financial Services Authority require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and based thereon, assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30th June 2003
BAKER TILLY
Chartered Accountants
274 Sauchiehall Street
Glasgow
G2 3EH
12h September 2003
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