UK Coal property value increased to £174m

By Saeed Shah
Friday 07 March 2003 01:00

The value of UK Coal's property portfolio has risen by £50m, making the company's real estate assets worth much more than its stock market value.

Britain's biggest coal producer, UK Coal, posting a hefty loss for 2002, announced that its vast property holdings are now worth £174m. That is £50m up on its worth two years ago, when the last independent valuation was carried out and compares with the company's stock market capitalisation of £99m. The property is in UK Coal's books at just £79m.

The company reported a loss of £81.7m for 2002, after accounting for the ongoing process of closing unproductive mines. Its Selby collieries are next to be shut down. Before exceptional items, pre-tax profits were £8.4m, compared with a loss of £10.7m last time. UK Coal said it would return to profit in 2004 after breaking even this year.

Gordon McPhie, the chief executive, said that coal power stations had a future and that would give UK Coal a future if it was able to produce at internationally competitive prices. "We're working towards a core of [eight] competitive collieries.... Growth will come from the property side," he said.

The company is sitting on thousands of acres of land, left redundant at closed mines.

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