In the application of the Group's accounting policies, the
Directors are required to make judgements and estimates that can
have a significant impact on the financial statements. The most
critical accounting judgement relates to the classification of
royalty arrangements and the key sources of estimation uncertainty
relate to the calculation of certain royalty arrangement's fair
value and the key assumption used when assessing impairment of
property, plant and equipment and intangible assets. The use of
inaccurate assumptions in assessments made for any of these
estimates could result in a significant impact on financial
results. The critical accounting judgements and key sources of
estimations uncertainty are substantially the same as those
disclosed in the Group's consolidated financial statements for the
year ended December 31, 2014, which were published on March 25,
2015.
3 Changes in accounting policies and disclosures
The Condensed financial statements have been prepared under the
historical cost basis, as modified by the revaluation of coal
royalties (investment property) and certain financial
instruments.
The accounting policies applied are consistent with those
adopted and disclosed in the Group financial statements for the
year ended December 31, 2013, except for the adoption of amendments
to IAS 1, 'Financial statement presentation' regarding other
comprehensive income, IFRS 13, 'Fair Value Measurement' and IFRS 10
'Consolidated Financial Statements' and IAS 27 'Separate Financial
Statements'. These amendments have not had a material impact on the
accounting policies applied by the Group.
A number of other accounting pronouncements, principally
amendments to existing standards, issued by the IASB became
effective on January 1, 2014, and were adopted by the Group. These
pronouncements have not had a material impact on the accounting
policies applied by the Group.
The Group has not early adopted any other amendment, standard or
interpretation that has been issued but is not yet effective. It is
expected that where applicable, these standards and amendments will
be adopted on each respective effective date.
4 (Loss)/Earnings per share
Loss per ordinary share is calculated on the Group's loss after
tax of GBP47,589,000 (2013: GBP42,497,000) and the weighted average
number of shares in issue during the year of 113,075,454 (2013:
108,932,340).
Loss per ordinary share excludes the issue of shares under the
Group's JSOP, as the Employee Benefit Trust has waived its right to
receive dividends on the 925,933 ordinary 2p shares it holds as at
December 31, 2014 (December 31, 2013: 925,933).
2014 2013
GBP'000 GBP'000
Net profit attributable to shareholders
Earnings - basic (47,589) (42,497)
Earnings - diluted (47,589) (42,497)
========= =========
2014 2013
Weighted average number of shares in issue
Basic number of shares outstanding 113,075,454 108,932,340
Dilutive effect of Employee Share Option Scheme - -
------------ ------------
Diluted number of shares outstanding 113,075,454 108,932,340
============ ============
As the Group is loss making in 2014 and 2013, the Employee Share
Option Scheme is considered anti-dilutive because including it in
the diluted number of shares outstanding would decrease the loss
per share.
Due to the growing number of valuation and other non-cash
movements being recognised in the income statement, the Group
presents an adjusted earnings per share metric to better reflect
the underlying performance of the Group during the year. In
calculating the adjusted earnings per share, the weighted average
number of shares in issue remains consistent with those used in the
earnings per share calculation.
Diluted
Earnings earnings
Earnings per share per share
GBP'000 p p
Net profit attributable to shareholders
Loss - basic and diluted for the year ended December 31, 2014 (47,589) (42.09p) (42.09p)
Adjustment for:
Amortisation of royalty intangible assets 759
Gain on sale of mining and exploration interests (1,350)
Gain on disposal of coal tenures (1,409)
Impairment of mining and exploration interests 4,873
Impairment of royalty and exploration intangible assets 10,033
Impairment of royalty financial instruments 15,288
Impairment of property, plant and equipment 1,352
Revaluation of coal royalties (Kestrel) 11,822
Effective interest income on royalty financial instruments (194)
Tax effect of the adjustments above 3,577
---------
Adjusted loss - basic and diluted for the year ended December 31, 2014 (2,838) (2.51p) (2.51p)
========= ========== ==========
Diluted
Earnings earnings
Earnings per share per share
GBP'000 p p
Net profit attributable to shareholders
Loss - basic and diluted for the year ended December 31, 2013 (42,497) (39.01p) (39.01p)
Adjustment for:
Amortisation of royalty intangible assets 854
Loss on sale of mining and exploration interests 6,398
Impairment of mining and exploration interests 26,321
Impairment of royalty and exploration intangible assets 8,313
Revaluation of coal royalties (Kestrel) 13,568
Revaluation of royalty financial instruments 8,735
Effective interest income on royalty financial instruments (1,140)
Tax effect of the adjustments above (11,371)
---------
Adjusted earnings - basic and diluted for the year ended December 31, 2013 9,181 8.43p 8.43p
========= ========== ==========
5 Dividends
On February 4, 2014 an interim dividend of 4.45p per share was
paid to shareholders in respect of the year ended December 31,
2013. On August 7, 2014 a final dividend of 5.75p per share was
paid to shareholders to make a total dividend for the year of
10.20p per share. Total dividend, paid during the year were
GBP11.54m (2013: GBP11.07m).
On February 4, 2015 an interim dividend of 4.45p per share was
paid to shareholders in respect of the year ended December 31,
2014. This dividend has not been included as a liability in these
financial statements. The Directors propose that a final dividend
of 4.00p per share be paid to shareholders on August 7, 2015, to
make a total dividend for the year of 8.45p per share. This
dividend is subject to approval by shareholders at the AGM and has
not been included as a liability in these financial statements.
The proposed final dividend for 2014 is subject to shareholder
approval at the 2015 Annual General Meeting ('AGM'). The Board
proposes to pay the final dividend on August 7, 2015 to
shareholders on the Company's share register at the close of
business on June 26, 2015. The shares will be quoted ex-dividend on
the London Stock Exchange on June 25, 2015, and the Toronto Stock
Exchange on June 24, 2015. At the present time the Board has
resolved not to offer a scrip dividend alternative.
6 Coal royalties (Kestrel)
GBP'000
At January 1, 2013 170,995
Foreign currency translation (25,993)
Loss on revaluation of coal royalties (13,568)
---------
At December 31, 2013 131,434
Foreign currency translation (2,515)
Loss on revaluation of coal royalties (11,822)
---------
At December 31, 2014 117,097
=========
The Group's coal royalty entitlements comprise the Kestrel and
Crinum coal royalties, and derive from mining activity carried out
within the Group's private land area in Queensland, Australia.
Rather uniquely to this royalty, the sub-stratum land is the
property of the freeholder, including the minerals contained
within. The ownership of the land therefore entitles the Group to a
royalty, equivalent to what the State receives on areas outside the
Group's private land. This royalty is accounted for as Investment
Property in accordance with IAS 40.
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