investors presentation€¦ · • investment properties £260m (dec-12) • gross debt of £75m to...
TRANSCRIPT
27 August 2013
Jonson Cox, Chairman
Jeremy Hague, Finance Director
Coalfield Resources plc is the listed entity which, following the restructuring of UK Coal plc,now only holds an actively managed investment in Harworth Estates
Investors Presentation
Agenda
2
1. Current position of Coalfield Resources plc (CfR)
2. Balance sheet position
3. Interim update
4. Harworth Estates : the potential
5. Strategic options for CfR & Harworth Estates
6. The Rights Issue
27 August 2013 Presentation to Investors & Analysts
Current structure – CfR post July 2013 restructure
3
• No equity interest or liability for governance of UK Coal Mining business
• Running and employee costs affirmed to be met by Harworth Estates (until 2016)
• Indemnity from “new” mining business against Blenkinsopp pension scheme (£0.2m pa)
Harworth
Estates
Blenkinsopp pension indemnity (supported by
HEMPL guarantee and security)
Owner of freeholds
CfR plc
New MineCo
Owned by
Employee
Benefit Trust
Cash to
PPF
24.9%equity
Running costs(subject to certain limitations)
Pension
Fund
75.1%equity
27 August 2013 Presentation to Investors & Analysts
Current position – Coalfield Resources (CfR plc)
4
• CfR plc sole active investment is 24.9% stake in Harworth Estates - £50.6m (Jun 13)– Mining restructure completed in July 13 and completes the removal of any CfR responsibility
or liability for mining
• Short-term bank facility (LBG) in place until May 14 - up to £5m– Payment of fees from 2012 restructure– Facility includes an obligation to undertake a Rights Issue to repay by 31 October 2013– Peel have guaranteed the loan
• Rights issues process underway – Repay drawn element of facility; settle remaining restructuring fees with excess providing
additional working capital (any costs not covered by Harworth Estates funding)– Underwritten by Peel
• Small team – Chairman, 2 executives, 3 NED’s and PA– CfR funding reaffirmed until 2016 from Harworth Estates as part of July restructuring
• ‘Put and Call’ option on Harworth Insurance remains following July restructure: potential to sell Harworth Insurance to be discussed with mining administrator
27 August 2013 Presentation to Investors & Analysts
CfR & Harworth Estates balance sheets
5
Assets £m
Non-current assets
Intangible assets 0.7
Investment property 260.1
Investments in joint ventures 1.8
Other 1.3
Total non-current assets 263.9
Current assets
Trade and other receivables 17.7
Cash and cash equivalents 31.6
Total current assets 49.3
Total assets 313.2
Current liabilities
Trade and other payables (15.3)
Borrowings (14.6)
Provisions (0.1)
Total current liabilities (30.0)
Non-current liabilities
Derivative financial instruments (0.8)
Borrowings (60.7)
Total non-current liabilities (61.5)
Total liabilities (91.5)
Net assets 221.7
Coalfield Resources plc as at Jun-13 Harworth Estates Group as at Dec-12
27 August 2013 Presentation to Investors & Analysts
Assets £m
Non-current assets
Investments in associates 50.6
Total non-current assets 50.6
Current assets
Trade and other receivables 0.7
Assets classified as held for resale 22.3
Cash and cash equivalents 0.7
Total current assets 23.7
Total assets 74.3
Current liabilities
Trade and other payables (6.7)
Liabilities classified as held for resale (17.6)
Borowings (2.9)
Total current liabilities (27.2)
Net current liabilities (3.5)
Non-current liabilities
Retirement benefit obligations (0.7)
Total non-current liabilities (0.7)
Total liabilities (27.9)
Net assets 46.4
CfR interim update – June 2013
27 August 2013 Presentation to Investors & Analysts 6
• Net assets of £46.4m • Net assets per share 15.5p (pre Rights Issue)• Harworth Estates Group net assets £223.1m – CfR investment 24.9%• Loss in period £1.7m – non cash write off in respect of mining debts• Governance links to mining business relinquished
Net asset per share 29-Jun-13 29-Dec-12
£mPence per
share£m
Pence per share
Harworth Estates Group
Investment properties 260.1 - 260.1 -
Other asset and liabilities (37.0) - (38.4) -
Net assets 223.1 - 221.7 -
Coalfield Resources plc
24.9% share in Harworth Estates Group 55.6 18.6 55.3 18.5
£5.0 million dividend restriction (5.0) (1.7) (5.0) (1.7)
Carrying value of investment 50.6 16.9 50.3 16.8
Other assets and liabilities (4.2) (1.4) (2.4) (0.8)
Net assets 46.4 15.5 47.9 16.0
Number of shares in issue 299,298,160 299,298,160
Harworth Estates: The Potential
7
• Sites comprise coalfield land (both deep and surface mining, covering 30,000 acres) and rights to current mines
• Track record - residential, commercial, renewables and waste management
• Track record of cash realisation (over £80m Jan 2011 to Dec 2012) and valuation gains (£21.7m Jan 2011 to Dec 2012)
• Investment properties £260m (Dec-12)
• Gross debt of £75m to Lloyds and Barclays - £32m also held in cash (Dec 2012)
• Pay off debt before dividends with some retentions for development. Anticipating a more flexible refinancing in 2014
• Expectation of Harworth Estates paying dividends post refinancing
• Liabilities: no underground liabilities and no material net surface liabilities; strong record of clean up and realising scrap value
27 August 2013 Presentation to Investors & Analysts
Harworth Estates : Portfolio
827 August 2013 Presentation to Investors & Analysts
Harworth Estates has six
divisions:
• Strategic Land: growing
value through beneficial
planning consents and
strategic development;
• Major Developments:
strategic phased delivery of
five major sites;
• Business Parks: growing
revenue generation from
portfolio of industrial sites;
• Natural Resources:
growing income from over
forty sites across twelve
mineral & energy sectors;
• Operations & Recycling:
site remediation bringing
income generation from
coal fines & aggregates;
• Legacy: skilled
management to remove
contingent liabilities and
environmental / H&S risk.
DivisionStrategic
Land
Major
Developments
Business
Parks
Natural
Resources
Ops &
Recycling Legacy
44 sites
3,370 acres
subject to
planning
8,000 plots &
550 acres of
employment
land
5 major sites
1,754 acres
5.5 million sq
ft employment
land
Over 6200
housing plots
15 sites
430 acres
consented
land
1 million sq ft
of built
industrial
offices
46 sites
(agriculture)
26 sites (natural
resources)
60 schemes
within 15,000
acre agricultural
portfolio
Active on
four sites
Major site
is Rufford
Restoration
at Cutacre
Liability
reduction
across entire
portfolio
Land /
Schemes
Major
Sites /
Activities
Valuation
Total*
£260m
(Dec 12)
44 direct sites
plus
26 overage
sites with
Delivery
Partnerships
Waverley
Cutacre
Prince of
Wales
Harworth
North Gawber
Asfordby
Gascoigne
Wood
Riccall
Harworth
Whitemoor
Bilsthorpe
Agriculture
Minerals
Energy
Waste
Water
Leisure
Aggregates
Recycling
Coal Fines
Scrap
Recovery
Colliery spoil tips
Waste mgt
licences
Old legal
agreements
Pumping stations
Structures
£58m
valuation
£89m
valuation
£63m
valuation
£58m
valuation
£(7)m
valuation
provision
Harworth Estates : Six divisions
9
*divisional values based on HEL management split
27 August 2013 Presentation to Investors & Analysts
DivisionStrategic
Land
Major
Developments
Business
Parks
Natural
Resources
Ops &
Recycling Legacy
Planning
promotion
Obtaining
planning
consent
Land Sales
Optimising
planning
Value
engineering
Land sales vs
direct develop
Improve
service &
physical
appearance to
drive yield
Expand onto
consented
space
Disposals
Planning
promotion
Longer term
leasesCapital
Growth
Income
Streams
Liability
Reduction
Financing
support / grant
bids
Financing
support / grant
bids
Improve park
services
Marketing
Renewals
Non-property
rent streams
Agriculture
Coal Recovery
Waste
Surface Mining
Energy
Coal fine
recovery
Demolition &
scrap
Aggregate
recycling
Demolition &
scrap
Technical due
diligence
Brownfield
expertise
Mitigate /
reduce
planning
obligations
Engineering
design
Improved
tenant mix
Minimise voids
Long term
maintenance
Pass on
planning &
development
risk
Discharging
restoration
obligations
Reduce
contingent
liabilities
Understanding
historic liability
Proven
solutions
There are three distinct drivers
of value for Harworth Estates:
• capital growth;
• income generation; and
• liability management.
Each can be manifested in
different ways and have
varying importance in each of
the six different divisions.
The chart provides a
description of the key activities
behind each value driver for
each of the six divisions.
The colour coding represents
the relevant importance /
contribution of each value
driver (darker = higher),
highlighting a strong balance
of capital growth and income
generation across the group.
Harworth Estates : Divisional value drivers
1027 August 2013 Presentation to Investors & Analysts
Base valuation
of £260m
(Dec 2012)
Division TotalStrategic
Land
Major
Developments
Business
Parks
Natural
Resources
Ops &
Recycling
Legacy &
Overheads
Dec 2012 Valuation*
£260m£58m £89m £63m £58m £(7)m
• Robust base plan to deliver growth in assets over 5 years
– Base plan assumes minimal general market improvement
– Return from planning, development and sales
• Further opportunities
– Pre let development
– Land promotions
– Housing
• Risk Mitigation
– Strong operational capability and experience to handle any mining remediation
Harworth Estates : Strategic
1127 August 2013 Presentation to Investors & Analysts
Strategic options for CfR and Harworth Estates
12
• Coalfield Resources plc is an active investor with two directors and currently chairs the Harworth Estates Board
• Opportunity to discuss potential options with other Harworth Estates shareholder
– Potential disposal of all or part of their 75.1% shareholding
– Opportunity for CfR to assist in such process
– Potential to consolidate ownership and operational control of Harworth Estates (subject to financing being available)
27 August 2013 Presentation to Investors & Analysts
CfR Rights Issue
13
• Seeking net £5m
• £3.6m to discharge loan and balance of December 2012 restructuring fees; any excess providing additional working capital (any costs not covered by Harworth Estates funding)
• Peel underwritten & provided irrevocable undertaking– Irrevocable undertakings from Peel, Invesco and Pelham (approx. 45%)
• Pricing 1 New Ordinary Share at 2 pence per New Ordinary Share for every 1 Existing Ordinary Share
• Timetable– 7th August Announcement– 27th August General Meeting– 28th August nil paid dealing commences– 12th September trading fully paid
• Repay bank debt - nil gearing – stronger CfR
• Be in a strong position to pursue all strategic options in relation to Harworth Estates
27 August 2013 Presentation to Investors & Analysts
Disclaimer
14
• These presentation slides may contain forward-looking statements with respect to the business, performance and financial condition of Coalfield Resources plc. By their nature, these statements may involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. Any forward-looking statements reflect knowledge and information available at the date of preparation of these slides and Coalfield Resources plc undertakes no obligation to update these forward-looking statements. Nothing in this presentation should be construed as a profit forecast.
• No representation or warranty, express or implied, is given or made by Coalfield Resources plc or any of its directors, employees or advisers or any other person as to the achievement or reasonableness of any projections, targets, estimates or forecasts or the statements, beliefs and opinions expressed herein.
• No representation, warranty or undertaking is given by or on behalf of Coalfield Resources plc or their respective directors, officers, employees, agents and advisers as to the accuracy, completeness or reasonableness of the information or opinions contained in or given during this presentation and no liability is accepted or incurred by any of them for or in respect of any such information or opinions, provided that nothing in this paragraph shall exclude liability for any representations or warranty made fraudulently.
• In making these presentation slides available, Coalfield Resources plc makes no recommendation to buy, sell or otherwise deal in shares in the Coalfield Resources plc or in any other securities or investments whatsoever, and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity. Past performance is no guide to future performance. If you are considering engaging in investment activity, you should seek appropriate independent financial advice and make your own assessment.
• By accepting these presentation slides, you agree to be bound by the above conditions and limitations.
27 August 2013 Presentation to Investors & Analysts