I am very pleased to be able to inform shareholders that Bisichi Mining made a profit before tax in 2009 of £5 million (2008: £2.1 million) and a trading profit before tax of £4.7 million (2008: £6 million).

 In a year when international coal prices continued to fall, to a significant extent this profit was attributable to the continued success of our opencast mining operations at Black Wattle Colliery in South Africa and the protection from the lower coal price arising from our fixed price export contract, which provided the group with prices above market rates for most of 2009.

As a result of the last two financial years’ profitability, Bisichi’s financial position has never been stronger with, at the year end, just under £7 million in cash and no net debt.

As I reported at the time of the half year results, the second half of 2009 was a much more challenging environment than the first half. This was principally due to the strengthening of the South African Rand against the US Dollar and the reduction in coal prices in all of the group’s markets.

2010 looks to be another very challenging year, as the Rand continues to be strong against the US Dollar. In order to address this situation and mitigate the consequences, the Bisichi management has taken several steps that are focussed on increasing production, including:

• Increasing the capacity of the washing plant from 130,000 to 170,000 metric tonnes per month as well as increasing the flexibility of the product mix produced by the washing plant so that we can sell our output into different markets;
• Expanding the rail siding by installing a third rail line; and 
• Buying-in high quality coal from nearby reserves.

At the same time, I can report that all of Black Wattle’s remaining open cast permissions were granted in February 2010. This is very important news as it gives us the ability to increase further our own opencast production. The benefits of this increased production will come through in the second half of 2010.

In terms of markets, the physical demand for our product remains strong both domestically and internationally.

On the important subject of health and safety, I am very pleased to report that we had our best year ever. A more detailed report on health and safety is included in the Mining Review.

Bisichi’s UK retail property portfolio, managed by London & Associated Properties PLC, continues to perform in line with the market. After the significant downward revaluation in the previous couple of years, I am pleased to report that the external property revaluations at the year end increased marginally and most importantly there has been no reduction in rental income.

In terms of our borrowing facilities in the UK, I am pleased to report that a new term loan and overdraft facility has been signed. These facilities, secured against the group’s UK retail property portfolio, will expire in December 2012.

Finally, your Board has decided to declare a final dividend of 3.5p. This will be paid to shareholders on 9 August 2010 who were on the share register at the close of business on 2 July 2010. This dividend, combined with the interim dividend of 1p, represents an increase of 29% on the prior year and is a indication of the Board’s confidence in the current and future prospects of your business. On behalf of your Board, I would like to thank all of our staff who contributed to these results.

Michael Heller, Chairman