Investors Presentation€¦ · • Investment properties £260m (Dec-12) • Gross debt of £75m to...

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


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


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


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

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• 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


Harworth Estates : Portfolio


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


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


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


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)


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


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.


Investors Presentation€¦ · • Investment properties £260m (Dec-12) • Gross debt of £75m to...

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