UK Coal reports return to profit

UK Coal returned to profit last year, and has agreed land sales worth £18m, the company said.

The Doncaster-based company said in a trading update for the year ending December 31, 2011, that it had continued to make progress on the group’s three year strategic recovery plan, which was launched in May last year.

In a statement released today, it said: “In 2011, UK Coal was restored to profitability and the board now anticipates operating profit for the full year to be in line with expectations, with full year tonnage of 7.5m tonnes.”

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It continued: “We realised £65m of property net receipts in the year and this, together with operating cash-flow, reduced our total net debt to £139m and net bank debt to £55m, excluding restricted cash. Looking forward, delivery of the recovery plan at Daw Mill remains the highest priority.”

A key priority for 2012 is to “safely recover production levels” and “significantly improve development at Daw Mill”, its coal producing mine located at Arley, near Coventry, the firm said.

Total production in the fourth quarter was 1.6m tonnes, bringing full year production to 7.5m tonnes, in line with expectations, the company said.

The statement read: “Property disposals have generated around £6m of net receipts in the fourth quarter, bringing total net receipts in the year to £65m. We recorded a profit on property disposals of £3m for the full year. We have exchanged conditional contracts on further sales with a value of £18m, meaning net property sales of around £106m have been exchanged under our new approach since Q4, 2010.”

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