22 March 2010

 

Palmaris Capital Plc ("Palmaris" or the "Company")

 

Results for the 6 months ended 31 December 2009

 

The Board of Palmaris, the investment company with interests in coal mining, is pleased to present its unaudited results for the 6 month period ended 31 December 2009.  

 

Key points include:

 

·    A loss on ordinary activities before tax of £73,195 (2008: £(61,551));

 

·    An increase in valuation of SRG shares from £2.20 per share to £2.40 per share; and

 

·    Net assets are £15.72m (2008: £13.29m).

 

 

For further information contact:
Greg Melgaard, Managing Director	0779 965 7553
www.palmariscapital.com
John Llewellyn-Lloyd/Harry Stockdale, Execution Noble & Company Limited (Nominated Adviser)	0207 456 9191

Chairman's Statement

Results

The interim accounts for the six months to 31 December 2009 show a loss of £73,195 compared with a loss of £61,551 last year. The increased loss was almost wholly due to lower interest rates, resulting in a reduction in the interest receivable. Our net assets stand at £15.7M or 10.08p per ordinary share. The sole remaining investment is in Scottish Resources Group Limited (SRG), the UK's largest surface coal mining company, which includes a renewable energy business and a property development business.

 

Scottish Resources Group

The SRG audited accounts for the year to March 2009 were published in January 2010. The result for the year was a loss of £9.1M compared with a profit of £0.2M the previous year. This was the first set of SRG's accounts prepared adopting IFRS reporting, resulting in substantial differences in the reported figures and comparatives. The loss before exceptional items was £5.2M compared with a loss of £7M in 2008. The exceptional items in the current year produced a loss of £3.9M compared with a profit of £7M the previous year.

 

During the year coal sales tonnages increased from 2.9M to 3.1M and sales revenue increased from £111.8M to £143.5M. This significant increase was achieved because the average sales price increased from £1.47 per gigajoule to £1.77 per gigajoule, an increase of some 20%.

 

In addition, an increasing number of SRG sales contracts have gas oil and inflation adjustment clauses to offset the variable cost pressures facing the coal industry.

SRG invested heavily during the year with over £25M of new plant and equipment purchased, which will improve its efficiency and ability to increase production in future years. This was financed partly by cash generated from operations during the year (£14.1M before interest) and partly by long-term asset finance.

 

The SRG land and renewable energy business has the land assets and skill base to allow it to provide low carbon energy alternatives. This will be a key growth area for SRG in the future with the immediate focus being on developing maturing wind energy opportunities. The existing wind farm proposals in partnership with Infinis are progressing through the planning system at present. SRG Estates is also currently promoting 14 large strategic property development sites through the planning process which should yield in excess of 300 residential units and over 1 million sq ft of commercial space. It should have a ready supply of valuable consented sites to realise in the market when economic recovery takes place.

 

The positive effect of increased sales prices is being felt to a greater extent in the current year. SRG budgeted for a substantial improvement in operating profit and performance to date is in line with expectations. This profit is allowing the group to make a significant reduction in its indebtedness.

In the light of the improved performance of SRG we have decided to increase our valuation of SRG shares from £2.20 per share to £2.40 per share.

 

Following reports in the press that SRG was planning a flotation on the London Stock Exchange later this year, SRG has confirmed thata number of options in terms of its capital structure, including flotation, are reviewed on an ongoing basis.

 

Conclusion

Against a background of higher contracted coal prices for 2009/10 and the long-term potential for sustained demand for coal as an energy source, the outlook for SRG is positive. Its profits for the year to March 2010 are expected to be excellent, and we still hope that our investment will be realisable at a good valuation within the next year or so.

 

 

 

T.P. Noble

Chairman

19 March, 2010

 

 

UNAUDITED PROFIT AND LOSS Account

for the period ended 31 December 2009

	(Unaudited)	(Unaudited)	(Audited)
	6 months to	6 months to	12 months to
	31 Dec 2009	31 Dec 2008	30 June 2009
	£	£	£
Turnover	-	-	-
Cost of sales	-	-	-
Gross profit	-	-	-
Administrative expenses	(81,793)	(80,405)	(165,332)
Operating (loss)	(81,793)	(80,405)	(165,332)
Investment and other income	8,598	18,854	29,169
(Loss) on ordinary activities before taxation	(73,195)	(61,551)	(136,163)
Taxation on (loss) on ordinary activities	-	-	-
(Loss) on ordinary activities after taxation	(73,195)	(61,551)	(136,163)
(Loss) for the financial period	(73,195)	(61,551)	(136,163)
Earnings per ordinary share
(Loss) per ordinary share	(0.05)p	(0.04)p	(0.09)p
Diluted (loss) per ordinary share	(0.05)p	(0.04)p	(0.09)p
Net assets per share
Net assets per ordinary share	10.08p	8.52p	9.30p
Diluted net assets per ordinary share	10.08p	8.52p	9.30p

 

 

UNAUDITED BALANCE SHEET

As at 31 December 2009

		(Unaudited)	(Unaudited)	(Audited)
		As at	As at	As at
		31 Dec 2009	31 Dec 2008	30 June 2009
	Notes	£	£	£
Fixed assets
Investments	1	15,456,000	12,880,000	14,168,000
		15,456,000	12,880,000	14,168,000
Current assets
Trade debtors		5,750	2,906	2,875
Other debtors		14,590	14,729	13,409
Cash		280,262	422,901	339,551
		300,602	440,536	355,835
Creditors
Amounts falling due within one year
Other creditors		(41,572)	(33,699)	(23,610)
		(41,572)	(33,699)	(23,610)
Net current assets		259,030	406,837	332,225
Net assets		15,715,030	13,286,837	14,500,225
Capital and reserves
Called up equity share capital		7,796,665	7,796,665	7,796,665
Unrealised appreciation reserve		9,016,000	6,440,000	7,728,000
Capital reserve	2	(1,217,356)	(1,217,356)	(1,217,356)
Share premium		351,500	351,500	351,500
Profit and loss account	2	(231,779)	(83,972)	(158,584)
Shareholders' funds		15,715,030	13,286,837	14,500,225

 

 

 

CASH FLOW STATEMENT

for the period ended 31 December 2009

		(UNAUDITED)	(UNAUDITED)	(AUDITED)
		31 Dec 2009	31 Dec 2008	30 June 2009
	Notes	£	£	£
Net cash (outflow) from operating activities	A	(67,887)	(68,562)	(162,227)
Returns on investments and servicing of finance	B	8,598	18,854	29,169
Cash (outflow) before financing		(59,289)	(49,708)	(133,058)

 

 

NOTES TO THE CASH FLOW STATEMENT

for the period ended 31 December 2009

 

A. Reconciliation of operating loss to operating cash flows

	(UNAUDITED)	(UNAUDITED)	(AUDITED)
	31 Dec 2009	31 Dec 2008	30 JunE 2009
	£	£	£
Operating (loss)	(81,793)	(80,405)	(165,332)
(Increase)/decrease in debtors	(4,056)	(359)	992
Increase in creditors	17,962	12,202	2,113
Net cash (outflow) from operating activities	(67,887)	(68,562)	(162,227)

 

 

B.  Analysis of cash flows

Returns on investments and servicing of finance
Interest received			1,098	11,354	14,118
Fees and commissions received			7,500	7,500	15,051
Net cash inflow			8,598	18,854	29,169

 

 

C.  Analysis of net funds    

			1 JULY 2009	Cash Flow	31 DEC 2009
			£	£	£
Cash			339,551	(59,289)	280,262

 

Reconciliation of net funds                

	(UNAUDITED)	(UNAUDITED)	(AUDITED)
	31 DeC 2009	31 Dec 2008	30 JunE 2009
	£	£	£
(Decrease) in cash in the period	(59,289)	(49,708)	(133,058)
Net funds at beginning of period	339,551	472,609	472,609
Net funds at end of period	280,262	422,901	339,551

                                

 

 

NOTES TO THE ACCOUNTS

for the period ended 31 December 2009

 

 

1.   Details of investments are as follows:

 

	(unaudited)	(unaudited)	(audited)
	6 months to	6 months to	12 months to
	31 Dec 2009	31 dec 2008	30 june 2009
	£	£	£
Shares at Directors' valuation
Scottish Resources Group Ltd.	15,456,000	12,880,000	14,168,000
	15,456,000	12,880,000	14,168,000

 

 

2.  The calculation of the basic (loss) per ordinary share is based on the following: 

 

	(unaudited)	(unaudited)	(audited)
	6 months to	6 months to	12 months to
	31 Dec 2009	31 dec 2008	30 june 2009
	£	£	£
(Loss)	(73,195)	(61,551)	(136,163)
Weighted average number of ordinary
shares in issue during the period	155,933,304	155,933,304	155,933,304

 

 

3.  The interim financial statements are unaudited and do not constitute statutory financial statements as defined in Section 396 of the Companies Act 2006. These statements have been prepared on the basis of the accounting policies set out in the Company's 2009 Annual Report and Accounts.

 

          The financial statements for the year ended 30 June, 2009 are an abridged statement; the full audited financial statements for the year to 30 June 2009, which were unqualified, have been lodged with the Registrar of Companies.

 

4.       Copies of the Interim Results for Palmaris Capital PLC will be posted to shareholders on 23 March, 2010 and may be obtained free of charge from the Company's registered office or from the Company's nominated adviser and broker, Execution Noble & Company Limited, The Old Truman Brewery, 91 Brick Lane, London E1 6QL.

 

 

       19 March, 2010