New UK Coal boss completes strategic review

New executive chairman Jonson Cox told investors at the Doncaster-based group’s annual meeting that he has completed a strategic recovery review and started implementing it.

The former managing director of Yorkshire Water was appointed in January and pledged to weed out “deep-rooted” problems and cut debt. Shares rose 3.3 per cent to 39.5p yesterday.

Investors backed all resolutions at the group’s annual meeting yesterday, but three per cent of votes, some 4.5m shares, were cast against its remuneration report. Another 12.6m shares were withheld.

The group’s annual report revealed former chief executive Jon Lloyd received a £435,000 pay-off when he left the group in November. The remuneration report also revealed finance director David Brocksom’s total pay packet increased from £271,000 in 2009 to £321,000 in 2010.

Mr Cox will receive a £350,000 salary, which will not be reviewed until 2012. He could also be in line to earn 2.8m new shares.

His recovery plan involves stabilising mining production at Daw Mill in the West Midlands, Thoresby in Nottinghamshire and Kellingley, near Knottingley, in West Yorkshire.

He also wants to overhaul safety standards, cut costs and embark on a “more robust and reliable commercial strategy”.

UK Coal has been unable to capitalise on soaring coal prices because it is tied to selling coal at lower prices. Forced to spend millions on upgrading its mines, it has reported three years of consecutive losses, totalling £269.3m.

Mr Cox has also pledged to overhaul working patterns and pensions. Earlier this year he revealed plans to close UK Coal’s final salary pension schemes, and has also cut its salary tie to retail price inflation, which would have cost it £5m. It hopes to shave £12m from its budget this year.

He said the group’s land division, Harworth Estates, continues to sell surplus land. Contracts have been exchanged to sell 764 acres of farming land to housebuilder Taylor Wimpey for £10m, a price which could rise depending on development. The land was worth £12.6m in December.

It has sold land worth £33.6m since January, which will go to paying down debt.