UK Coal has confirmed that it is carrying out an independent valuation of its 50,000 acre land bank and eyeing development opportunities as it updated on losses in its mining business.
The group, which has recently attracted a £200m break-up bid from a consortium targeting its property portfolio, said in a trading statement that it anticipates reporting a loss before tax for the six months ended 30 June of around £30m.
The group said this would be on sales of £164m propped up by the disposal of £4.5m of property and net rental income of £1.4m.
The group is increasingly focusing on the enhancement of its property assets via redevelopment as the mining business struggles.
Profits from property in the first half year came in at £8.2m, up from £1.9m.
UK Coal said it hoped to add significant value to the portfolio “should planning permission be granted in respect of the many applications currently being processed”.
It added: “We have submitted planning applications for business park use in respect of all the former Selby mines and have an agreed masterplan to add a further 400,000 sq ft of accommodation on our Asfordby site.
“If planning permission is granted these sites will total some 300 acres.”
It added that rent reviews have been carried out in respect of agricultural land, which is held for surface mining purposes, and a survey is being carried out to assess further development opportunities.
The group said that rental income on business parks had continued to grow and existing buildings at Asfordby and Whitemoor were now almost fully let.
New leases agreed in the first half year in respect of its business parks and commercial properties have increased the annual rent roll by £400,000.
Development properties at Orgreave, Prince of Wales, Waverly and other sites totalling 1,250 acres are the subject of master planning or specific planning applications.
An additional 140 acres of former colliery and surface mine land received planning approval in the first half year.
The company said that the first six months of the financial year had been affected by lower mining output, despite good progress on the operational initiatives to improve performance and higher average selling prices.
It added that three collieries – Harworth, Rossington and Welbeck – were “under review”.
Last month UK Coal rebuffed a £200m break-up bid from a consortium comprising John Moulton’s Alchemy Partners, Morston Assets and the Duke of Buccleuch.
References: EGi News 20/07/05
