News Archive

15 April 2008

ATH Resources restates its 2007 Financial Information under IFRS

ATH Resources plc ("the Group") announces the impact of the adoption of International Financial Reporting Standards (“IFRS”) on its previously published results for the year ended 30 September 2007 and the six months ended 1 April 2007.

For all accounting periods up to and including the year ended 30 September 2007, the Group has prepared its financial statements under UK Generally Accepted Accounting Principles (“UK GAAP”).  For accounting periods from 1 October 2007, the Group is required under AIM rules to prepare its consolidated financial statements in accordance with IFRS as adopted by the European Union.

The Group's first results on this basis will be its Interim Results for the six months ended 30 March 2008, which will be announced on 10 June 2008.  The Group's first audited annual consolidated financial statements under IFRS will be for the year ended 28 September 2008. 

As comparative figures are required in the presentation of results under IFRS, the effective date for transition to IFRS is 1 October 2006.  Accordingly the results presented in the interim report for the six months ended 1 April 2007, and the annual report for the year ended 30 September 2007 have been restated under IFRS.

The effect of the restatement under IFRS on the Group's consolidated financial results for the six months ended 1 April 2007 and the year ended 30 September 2007 is summarised below, alongside the equivalent numbers reported under UK GAAP for those periods.

Impact on Restatement of 2006/7 Results

Whilst there is no change in the Group's cash flows, the adoption of IFRS has an impact on the amortisation of goodwill and on the treatment of deferred tax in respect of share option schemes.

Treatment of goodwill amortisation

IFRS 3 'Business Combinations' requires that goodwill be capitalised at cost and is subject to an annual impairment review.  Amortisation of goodwill is prohibited.

The Group has taken the option to apply IFRS 3 from the date of transition. Accordingly, the goodwill value at 1 October 2006 has been frozen and the amortisation charge arising in the year ended 30 September 2007 has been reversed.

Impairment tests have been carried out by the Group against the goodwill held at 1 October 2006 and 30 September 2007 without impairment charges arising.

The goodwill amortisation reversed amounted to £793,000 for the year ended 30 September 2007 and £396,000 for the six months ended 1 April 2007.

Treatment of deferred tax on share options

IAS 12 'Income Taxes' includes specific guidance on the treatment and calculation of deferred tax in respect of share option schemes.  Accordingly the Group has recalculated the amount arising on this revised basis and an additional deferred tax provision has arisen.

The adjustment arising increases the deferred tax charge and associated provision by £127,000 for the six months ended 1 April 2007 and year ended 30 September 2007.  No adjustment arises in the opening balance sheet at 1 October 2006.

The Group's report “2007 IFRS Restatement” contains full details of the restatement and may be accessed by visiting the ATH Resources website at www.ath.co.uk.  

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Notes to Editors

ATH Resources is an AIM-listed operator of opencast coal mines in the UK with its current four operational mines, Skares Road, Grievehill, Glenmucklock and Laigh Glenmuir in East Ayrshire in Scotland.  The Company is currently the third largest producer of coal in the UK producing approximately 1.7 million tonnes per annum.  Coal was used to generate 34 per cent of the UK's electricity in 2005 and the Company 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. Following ATH Resources' incorporation in October 2003, and backed by a follow on investment from The Alchemy Plan, the Company acquired the Garleffan mine in November 2003. Garleffan is currently being restored having finished coaling in June 2006. ATH Resources listed on the AIM market of the London Stock Exchange in June 2004.

In June 2005, having raised £18 million by way of an Open Offer, the Group acquired two new opencast sites, Grievehill and Glenmuckloch in Scotland. 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 Company 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.

In May 2006, the Group acquired Doncaster-based A Ogden & Sons Limited a successful coal recovery, land remediation and regeneration business with a particular focus on colliery spoil heap reclamation projects.  ATH paid net £9.5 million for the business.  The acquisition, which was earnings enhancing, allowed ATH to build on its skills as a regenerator of land, whilst developing strong relationships with key English planning authorities.  The Company has been successfully integrated into the Group. The operational diversification that the acquisition brings to the Group will be a significant driver of ATH's organic growth going forward.

For the year ending 30 September 2007, the Group achieved turnover of £70.5 million, an increase of 30% on its 2006 year end, while EBITDA was up 31% to £25.1 million for the same period.

Further information on ATH Resources can be found at www.ath.co.uk