BISICHI MINING PLC ANNUAL REPORT 2017

STRATEGIC REPORT FINANCIAL & PERFORMANCE REVIEW
Cashflow & financial position
The following table summarises the main components of the
consolidated cashflow for the year:
Year ended
31 December
2017
£’000
Year ended
31 December
2016
£’000
Cash flow generated from operations before working
capital and other items 5,819 1,625
Cash flow from operating activities 7,270 2,614
Cash flow from investing activities (1,936) (1,691)
Cash flow from financing activities (429) (521)
Net (decrease) / increase in cash and cash equivalents 4,905 402
Cash and cash equivalents at 1 January (890) (626)
Exchange adjustment 50 (666)
Cash and cash equivalents at 31 December 4,065 (890)
Cash and cash equivalents at 31 December comprise:
Cash and cash equivalents as presented in the balance sheet 5,327 2,444
Bank overdrafts (secured) (1,262) (3,334)
4,065 (890)
£18.8million during the year primarily due to a
decrease in current borrowings from £3.4million
in 2016 to £1.3million in 2017. This decrease
can mainly be attributed to a decrease in
borrowings drawn from the groups’ South African
structured trade facility utilised by the groups’
mining operations. The overall exchange gain
recorded through the translation reserve on
translation of the group’s South African net
assets at year end decreased to £0.1million
(2016: £1.0million) as a result of the reduced
movement of the South African Rand against
UK sterling year to year.
Further details on the group’s cashflow and
financial position are stated in the Consolidated
Cashflow Statement on page 59 and the
Consolidated Balance Sheet on page 56.
Cash flow generated from operating activities
increased compared to the prior year to £7.3million
(2016: £2.6 million) mainly due to the improved
operating performance of our South African
mining operations, as outlined above. Overall
the group achieved an increase in operating
profit during the year of £3.8million (2016:
£0.6million). In addition to operating profit, the
increase in cashflow generation from operating
activities can also be attributed to a cashflow
increase from trade receivables of £0.9million
(2016: £0.2million), as a result of an decrease in
the trade receivables balances of our South
African domestic coal customers, and a
cashflow increase from inventories of £0.9million
(2016: decrease of £0.26million), as a result of
improved coal sales from our South African
mining operations in the last quarter of 2017.
Investing cashflows primarily reflect the net
effect of capital expenditure during the year of
£1.8million (2016: £2.9million) which can mainly
be attributable to the new infrastructure
improvements to the washing plant facility at
Black Wattle, as outlined in the Mining Review.
As at year end the group’s mining reserves,
plant and equipment had a net asset value of
£8.6million (2016: £8.5million) with capital
expenditure being offset by depreciation of
£1.8million (2016: £1.8milion) for the year.
Cash outflows from financing activities included
dividends paid to shareholders of £0.4million
(2016: 0.4 million).
Overall, the group managed to achieve an
overall increase in cash and cash equivalents
of £4.9million (2016: £0.4million) for the year.
After taking into account an exchange gain of
£0.05million (2016: loss of £0.7million) on the
translation of the group’s year end net balance
of cash and cash equivalents that were held in
South African Rands, the group’s net balance of
cash and cash equivalents (including bank
overdrafts) at year end was £4.1 million (2016:
balance owing of: £0.9million).
The group has considerable financial resources
available at short notice including cash and cash
equivalents (excluding bank overdrafts) of
£5.3million (2016: £2.4million), investments
available for sale of £1.1million (2016: £0.8million)
and its £2m loan to Dragon Retail Properties
Limited which accrues annual interest at 6.875
per cent. The above financial resources totalling
£8.4million (2016: £5.2million).
The net assets of the group reported as at year
end were £17.7million (2016: £17.0million). Total
assets remained stable at £36.6million (2016:
£36.9million) mainly due to a decrease in inventory
and trade receivables balances at year end, as
outlined above, and the write off of the groups’
joint venture investment in Ezimbokodweni Mining
(Pty) Ltd of £1.8million offsetting the increase in
the groups’ cash and cash equivalents balance
from £2.4million to £5.3million during the year.
Liabilities decreased from £19.9million to
Future prospects
As we continue into 2018, the group’s financial
position remains strong and we expect to achieve
significant additional value from our existing
mining operations. The group continues to seek
to expand its operations in South Africa through
the acquisition of additional coal reserves, in
particular in areas surrounding Black Wattle
where additional value can be achieved through
the use of our existing infrastructure. In addition,
management is currently investigating other major
investment opportunities in the domestic property
sector in line with the groups’ overall strategy of
balancing the high risk of our mining operations with
a dependable cash flow and capital appreciation
from our UK property investment operations.
Further information on the outlook of the
company can be found in both the Chairman’s
Statement on page 2 and the Mining Review on
page 6 which form part of the Strategic Report.
Signed on behalf of the Board of Directors
Garrett Casey
Finance Director
20 April 2018
Bisichi Mining PLC
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