RJB stuns City as profits rise by 10%
Wednesday 09 April 1997
The upbeat news followed RJB's announcement on Monday that it had joined forces with National Power and Texaco to explore the development of a new generation of clean coal power stations.
Shares in RJB continued their climb, rising another 7p to 397.5p following Monday's 10 per cent increase.
Richard Budge, chief executive, said he was confident of coming to an acceptable agreement with the three main coal-fired electricity generators when RJB's supply contracts expire next March. He also voiced optimism that RJB would strike deals to develop its clean coal stations with other generators than National Power.
RJB is forecasting that total UK demand for coal will slip from 63 million tonnes in 1996 to 58 million tonnes this year in the face of the "dash for gas" by the electricity industry.
The company predicts that by the turn of the century gas-fired generation will have displaced 50 million tonnes of coal consumption compared with 26 million tonnes last year.
But it believes that improving cost-competitiveness, allied to the arrival of clean coal stations will maintain a market for coal of around 45 million tonnes a year.
The upcoming negotiations with National Power, PowerGen and the Energy Group, formerly Eastern Electricity, will be crucial in determining RJB's medium-term future. Mr Budge said that no talks had yet taken place and judging by past experience, the generators would leave it until the eleventh hour.
However, RJB is pressing ahead with plans to spend nearly pounds 400m this year on the development of its deep mines and other capital expenditure.
Last year's advance in profits was achieved despite a 10 per cent fall in turnover to pounds 1.3bn. Mr Budge paid tribute to the increased efficiency achieved by the RJB workforce which has seen average production costs fall from over pounds 1.30 a gigajoule under British Coal to pounds 1.17.
Buoyed by a strong operating cash flow of pounds 321m, RJB repaid the remaining pounds 160m of bank debt during the year - well in advance of the five-year timescale set out when the group took over the coalfields in December 1994. At the same time RJB repaid pounds 127m to shareholders through two share buy-backs, leaving it with gearing at the year-end of 40 per cent.
- 1 I was a Woman Against Feminism too
- 2 Fifty Shades of Grey movie trailer released: First look at Jamie Dornan as Christian Grey
- 3 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 4 Students offered grants if they tweet pro-Israeli propaganda
- 5 The Tory donor whose firm is one of Britain’s biggest tax avoiders - with HMRC's blessing
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...
competitive: Progressive Recruitment: This really is a fantastic chance to joi...
£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...