News Archive

06 October 2005

Trading Update

ATH Resources plc (AIM:ATH.L), one of the UK’s largest coal producers , today issues the following update on trading ahead of its Preliminary Results for the year ended 2 October 2005 which will be announced on Wednesday 7 December 2005.

Trading has been generally in line with Directors’ expectations for the year. However, following the acquisition of the Grievehill and Glenmuckloch sites in June 2005 production at the Garleffan site was scaled back in order to facilitate the opening up of the Grievehill site ahead of the winter months. We are able to report that Grievehill dispatched its first coal prior to the year end and the Directors are extremely pleased with the way this site is developing.

Coal supplied to customers in the year ended 2 October 2005 was some 1.5 million tonnes. (10 months to 26 September 2004 1.3 million tonnes).

Following the acquisition the Group has successfully renegotiated sales contracts with three of our Electricity Supply Industry (ESI) customers. These are in line with the Directors’ expectations and the business should benefit from these renegotiated contracts in forthcoming years. Some pricing improvement has already been achieved towards the end of this trading period. However, the rise in crude oil prices has impacted on the cost of gas oil having increased by 32% during the course of the year and which accounts for some 17% of our direct costs. Profit before tax is therefore anticipated to be below expectations and, although the Directors cannot give an exact number, it is expected that this will be not less than £5.6 million. It is not expected that this will impact on the Company’s ability to pay the anticipated level of full year dividend on 13 January 2006 to Shareholders on the register on 23 December 2005.

The Group continues to develop a number of new sites as well as extensions to our existing portfolio in Scotland and France. The Directors are pleased with the prospects unfolding for the Group in future years. As at 2 October 2005, the Group had some 5.6 million tonnes of permitted reserves which represented more than three years of production.

The Directors believe that the outlook for 2005/06 remains robust. Although increases in gas oil prices may lead to slightly reduced profits next year, the Directors are confident that its current strategy of growing the Group through a combination of acquisition and organic in-house development will ensure that the Group will be able to continue to develop and maintain its dividend policy into the future.

 

For further information:

ATH Resources plc
Tom Allchurch, Chief Executive	Tel: +44 (0) 1302 760 462
tom.allchurch@ath.co.uk	www.ath.co.uk

Media enquiries:

Abchurch
Henry Harrison-Topham / Sarah Hollins	Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com	www.abchurch-group.com

 

Notes to Editors:

ATH Resources plc is an AIM-listed operator of opencast coal mines in the UK with its current three operational mines, Skares Road, Garleffan and Grievehill, located near New Cumnock, East Ayrshire in Scotland. The Group is currently the third largest producer of coal in the UK producing approximately 1.5 million tonnes per annum. Coal was used to generate 32.7 per cent of the UK’s electricity in 2004 and the Group holds coal supply contracts with four of the UK’s main electricity generating companies.

The management team has been in place since 1998. It acquired the rights to operate (and subsequently acquire) the Skares Road mine with support from The Alchemy Plan and Bank of Scotland. Following ATH Resource’s incorporation in October 2003, and backed by a follow on investment from The Alchemy Plan, the Company acquired the Garleffan mine in November 2003.

In June 2005 the Group acquired two new opencast sites, Grievehill and Glenmuckloch in Scotland for £18 million using the £16.8 million raised by way of an Open Offer on the basis of 1 New Ordinary Share for every 3 Existing Ordinary Shares. The acquisition increased the Group’s reserve base by 160% and provided longer term stability to the business.

In addition to its operating mines, the Group also has a number of other coal mining projects in Scotland and two through its French subsidiary, SRMMC, including a series of six existing coal concessions in south-central France covering an area of 36km ² , with an estimated resource of approximately 4.5 million tonnes of recoverable coal.

ATH Resources listed on the AIM market of the London Stock Exchange in June 2004.

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