The turnaround at Bisichi Mining's Black Wattle Colliery in South Africa has gained pace after its dismal performance in last year's first half. Indeed, the opening of a third opencast pit at the site has allowed the company to ramp up production to 150,000 tonnes of coal a month. That's up from 135,000 tonnes a month in 2011's second half and 110,000 tonnes a month a year ago. Yet, with the coal price looking uncertain, investors should be cautious.
Bisichi has a record of producing excellent results in one period and then disappointing in the next. What's more, coal export prices at South Africa's Richards Bay terminal, where Bisichi ships a portion of its coal, have fallen steeply in recent months to under $90 (£57) a tonne on a free-on-board basis. That's down from over $105 a tonne at the start of the year and roughly $120 a tonne at times during the second half of 2011.
Nevertheless, Bisichi has had success recently with selling coal into the domestic market and management remains upbeat about continued strong local demand.
BISICHI MINING (BISI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 130p | MARKET VALUE: | £13.7m | |
| TOUCH: | 120-140p | 12-MONTH HIGH: | 163p | LOW: 103p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 165p | NET DEBT: | 31% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 13.2 | -1.83 | -11.5 | 1.0 |
| 2012 | 16.5 | 1.12 | 10.9 | 1.0 |
| % change | +25 | - | - | - |
Ex-div: 2 Jan Payment: 1 Feb | ||||
