ATH cuts debts during 'challenging' year

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DONCASTER-based ATH Resources said it was determined to keep its place as one of Britain's lowest cost coal producers as it revealed that it had suffered a fall in full year profits.

In the year ended October 3 2010, sales increased to 78.3m, from the previous year's figure of 77.5m. Profit before tax from the continuing operations for the year was 4m, compared with 6.1m for the previous year.

After accounting for a loss on the disposal of the group's regeneration business, the group recorded a post tax loss for the year of 1.8m, which compared with a profit of 2.6m for the previous year. Net borrowings fell by 4.9m to 34.5m.

The company has a new executive team in place with the appointments of Alistair Black as chief executive and Andrew Weatherstone as group finance director

In a statement to accompany the results, ATH said it was well positioned to concentrate its energies on maintaining and developing its surface mining business as one of the leading producers of coal in the UK.

By selling the group's regeneration business, the board said it had reduced the volatility of the group's earnings, and removed the potential for a substantial cash call that would have been necessary had the business expanded overseas.

Mr Black said: "During a difficult year, the group disposed of the regeneration business, significantly reducing debt and enabling the management team to focus on its core activities.

"The group also increased its proved reserve base by 30 per cent to record levels. 2011 will see production commencing at two new mines at Netherton and Duncanziemere which will form the cornerstone of the group's production for the next few years.

"Debt is expected to continue to reduce and, over the medium to long term, reserves should increase further. The group is well positioned to deliver increasing returns to shareholders as the impact of its legacy contracts reduces significantly during 2012."