News Archive

02 April 2009

Pre-Close Trading Update

ATH Resources plc, one of the UK's largest coal producers, today issues the following trading statement ahead of its interim results for the six months to 29 March 2009 which will be announced on Tuesday, 9 June 2009.

It is expected that trading for the full year will be in line with market expectations. Sales volumes for the six months, which increased by 6% to around 840,000 tonnes, were generated entirely by the mining business. This business showed strong volume growth compared with the prior period with an increase in sales in excess of 150,000 tonnes. There was, as expected, no production from the ATH Regeneration business as the Grimethorpe site completed operations in July 2008 and no further sites have yet been commenced.

As previously notified, the Group was disappointed that Derbyshire County Council refused its application for planning consent to develop the proposed regeneration scheme at Langton, Nottinghamshire. This was despite Nottinghamshire County Council, the other planning authority required to approve the scheme, having previously given its planning approval. ATH Resources has appealed against the Derbyshire County Council decision and the result is expected later in the year.

The average selling price continues to improve to over £40 per tonne, despite a reduction in the international market price of coal, reflecting the Group's contract position and strategy. A further increase is expected in the second half of the year as coal deliveries commence later this month under a previously notified 800,000 tonnes supply agreement.

As expected, the margin in the first half of the year will reflect the lack of lower cost ATH Regeneration production and an increase in the average cost of production in the mining business due to a change in the mix of output from the various sites.

Discussions continue with two large mining companies to develop the ATH Regeneration business in Australia. Commercial negotiations continue to progress and the Directors will provide a further update in due course.

During the period, proven coal reserves were increased with the receipt of full planning consent for two extensions at the Glenmuckloch mine, representing 0.7 million tonnes and a new mine at Rigg for 1.1 million tonnes in Dumfries and Galloway. Planning consent for an extension to the Skares Road mine for 0.6 million tonnes is expected to be received in the next three months and the Group is on track to submit further planning applications in the next six months for an additional 3 million tonnes of coal reserves.

The Group's total reserve base currently stands at 7.4 million tonnes.

For further information:

Notes to Editors

ATH Resources was listed on the AIM market of the London Stock Exchange in June 2004 and operates five surface coal mines in Scotland; Skares Road, Grievehill and Laigh Glenmuir in East Ayrshire, Glenmuckloch in Dumfries and Galloway and Muir Dean in Fife. The Group is currently the third largest producer of coal in the UK producing approximately 2 million tonnes per annum. Coal is used to generate around a third of the UK's electricity and the Company now holds coal supply contracts with four of the UK's main electricity generating companies.

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%. 

In May 2006, the Group acquired ATH Regeneration a successful coal recovery, land remediation and regeneration business with a particular focus on colliery spoil heap reclamation projects. The acquisition, which was earnings enhancing, allowed ATH Resources 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 both in the UK and overseas and the business is actively pursuing a number of projects in Australia.

For the year ending 28 September 2008, the Group achieved turnover of £76.9 million, an increase of 9% on its 2007 year end, whilst operating profit increased by 8% to £11.9m for the same period.

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