I was going to buy these when at 108p few months ago but never had the courage. They reached new heights of about 134p recently but have slipped to around 113p at present.

They have a massive yield of 10%.

Does anyone have any views about buying into these.

I would be content to just have 10 or 20 per cent increase over the next year on thse if i got my 10 % divi.

Thanks

It is felt in some quarters that Drax Group plc may be looking to take over UKC. Drax would then be able to source its coal internally father than pay the soaring market price for coal. Peel have said in the past that it wouldn't make a bid itself for UKC but reserved the right to do so if another party showed interest. May see this situation warm up a bit over coming months.

Yes I think this particular run is press speculation.
Monday could be a good test.

Interesting one to keep an eye on though!!

The support at 420p has been broken now.


UK Coal slumps to H1 pre-tax loss.


The UK's biggest coal miner UK Coal slumped to a pretax loss in the first half, but said it remained on target to meet its profit expectations for the full year.

UK Coal, which has mining operations in Britain and a property portfolio, said the non-cash property valuation gains of last year were significantly reduced as a result of the current property downturn.

The company reported a pretax loss of 9.9m for the six months to June 30th, compared with a pretax profit of 40.6m a year ago.

Numis Securities said the pretax loss, resulting from the company's deep mining operations, would be reversed in the second half.

The sharp increase in the price of coal, up 45% from the start of the year to July, is set to boost cash flows for the company, which supplies around 15% of the coal burned in the UK.

UK Coal said it would produce 5 million tonnes of coal in the second half, compared with 3.7 million in the first half.

Agreed with your comment hyleo after seeing results and sold out my remaining shares yesterday at 402p. These have been a good servent but the property side may affect sentiment for a while. Have switched funds into BP.

Well done, Gus. Good to see I was right on this. 313p now. I think it will go lower with the housing market giving more dire news today.

Expectations for the remainder of 2008 for UK Coal

While output in the third quarter, and in particular in September, was reduced in part by non-recurring events, poor geology has continued to affect output at Kellingley and Thoresby. As a consequence, we believe that full year sales will total around 8 million tonnes, compared to earlier expectations of around 8.7 million tonnes (2007: 7.8m tonnes, excluding Maltby). We expect full year Deep Mine sales will be no more than 6.2 million tonnes and Surface Mines will realise circa 1.8 million tonnes.

In revenue terms for the full year, until recently we expected that part of this output shortfall would have been offset by higher than expected realised average sales prices. However, following the recent fall in the market price of coal we now expect an average fourth quarter sales price of 1.85 to 1.90 /GJ, taking fixed price contracts into account, making the average out-turn for the full year within our previously announced range of 1.90 to 1.95/GJ, rather than higher than this range as it might have been.

The world coal price has recently dropped from over $190 per tonne at the end of August for H2 2008 deliveries to $129 per tonne as of 14 October 2008 for Q4 2008 deliveries. At an exchange rate of circa 1:$1.75, this converts into a current UK market price of around 3/GJ. Compared to previous years, and indeed to the start of 2008 when the world coal price was around $118/tonne or 2.35/GJ at 1:$2, this remains a very high market price. However, very significant amounts of our deliveries are still contracted at prices historically fixed well below this level. The volume of these older contracts is set to fall sharply after next year.

The changes in the production outlook for the year, coupled with the market price for coal, lead us to conclude that our overall results for the year will be significantly below our previous expectations.

UK COAL lowers production forecasts
Business Financial Newswire


Deep mine output at UK COAL's pits - with the exception of Kellingley - has been materially lower than anticipated over the past three weeks.

The firm said that despite deploying increased man hours and taking other mitigating actions, it believes that deep mine production for the year ending 26 December is now likely to be between 5.7 and 5.8 million tonnes instead of the 6.2 million tonnes forecast in its interim management statement on 26 october.

It said that at Kellingley, the required work has been completed on the face equipment following the recent tragic fatality, and face production has restarted on the schedule.

However, the speed of recovery towards a normalised level of production has been slower than originally anticipated, and as a result, the Company has therefore revised down estimated production by a further 100,000 to 150,000 tonnes, making a total impact of 300,000 to 350,000 tonnes from the tragedy.

For the full year, Kellingley is now expected to produce around 1.0 million tonnes. Investigations are still continuing into the cause of the fatality.

Production at Thoresby continues to be affected by the previously reported very poor environmental and geological conditions on its last old panel and has not seen the improved output rates expected at the time of the 26 October 2009 announcement.

Daw Mill is still expected to mine all the remaining coal in the current panel prior to Christmas and achieve production of 3 million tonnes for the full year.

The last part of the current panel is being affected by a larger dirt band than originally anticipated, which will require additional washing and grading and, as a consequence, some reduction in saleable production.

At Welbeck, production has been affected by geological effects on the face.

While these have now been substantially worked through, this slow production has reduced our production expectations for this mine.

In consequence, Welbeck's production is now expected to be around 1.0 million tonnes for the year against the previous forecast of nearer 1.1 million tonnes.

Broker note from Arbuthnot 06.01.10:
"UK Coal has strengthened its board in terms of coal experience with the addition of Gareth Williams, a welcome development for the company which has struggled in recent times to achieve forecast productions. Mr Williams is currently employed by Anglo Coal as head of operational performance for Anglo Coal Canada and South America and has operational experience from some of Anglo Coals largest operations.

The company has also guided that 2009 production will be at the lower end of guidance given in November which was for 7.1Mt (this was a cut of 500kt at the time) lower production is due to poor geological conditions at its three operations. This is being addressed however the tone of the statement looks likely that guidance for 2010 will be lowered when the company puts out its pre close statement at the end of January. Powered roof support installation at Daw Mill was supposed to be in place in January, this has been pushed back by a month to Feb. Kellingley and Thoresby appear to be on track.

We retain our 120p target price for the moment with the expectation that the company will mitigate some of this lost production with higher prices, however we expect to see the shares softer today"

Perhaps a little early but the chart is starting to look more promising? (Nice price target!)

Rising due to Daily Mail possible cash bid.

"UK COAL has noted the speculation in today's Daily Mail relating to a purported proposal for a cash offer for the Group. UK COAL is not aware of any such proposal from the Group's major shareholder or any other source."

However:
"The Group is at a very early stage of investigating an approach it has received which could address the Group's exposure to the volatile performance of its deep mines through a merger transaction. It is emphasised that this proposal is highly conditional and at a very preliminary stage and no view can be expressed as to whether a transaction will result.
As has been reported to the market, the Group has encountered continuing difficulties in the performance of its deep mines in recent months, which is having a material impact on its financial position. At Daw Mill, as previously reported, preparation for production at the new face was hindered by difficult geological conditions and, as a result, the start of production on the new face is now expected during April rather than around the end of March. The exposure of the Group to the volatile performance in its deep mines is a significant concern to the directors and mitigating the effects of this exposure, by operating improvements or structural means, is a priority."

Broker note from Arbuthnot today:
"Looking to offset underground exposure.
We read this to mean that UK Coal is looking at reducing the group's exposure to the revenue interruptions caused by underground delays by acquiring or merging with a business that has a more reliable and stable revenue stream. . The FT reported this morning that Hargreaves Services is the company most likely to have made the approach. The motivation to improve the financial structure and cashflow stability for the deep mines seems sound. Hargreaves successfully bought the Maltby colliery from UK Coal in 2007 and has shown it can operate a deep mine efficiently.
Deep under-performance.
More negative is the director's obvious concern over the potential liability created by the deep mines if the poor performance continues. UK Coal, knowing full well that the status quo is unacceptable, has recently appointed a Director of Mining tasked with lifting the mine's performance. However, further Daw Mill (or other mining) delays will make it extremely difficult to combat unit cost increases, in a volume driven and highly operationally geared business.
We expect our forecasts for the year, which were at the low end of the range, to remain achievable. However, to meet production expectations of 7.6-7.8mt for the year, UK Coal now has no margin for error (which is not a comfortable situation given we are only three months into the year). Cash flow will continue to be a problem for the loss-making group in 2010, particularly with planned capex of 40-45m and a last reported net debt position of 180m (inc. Prepayments and exc. restricted cash). Despite these facts, our recommendation is based on UK Coal being a turn-around play. This still remains possible and could be assisted by the right transaction (Hargreaves Services currently in the frame), although we recognise that any visibility on the timing or success of either event is very limited."

Hi
can anyone explain why there are so many rule 8.3 take over code transactions taking place.

I know I may sound like a novice but are most if not all of these transactions indeed sales? if so why? am I missing some important news.

Pro TAer Zak Mir commentating on the stock this morning....

Zak Mir



Reged: 28/06/07
Posts: 1273
Re: CHART ATTACK - Longs and Shorts
#463680 - 14/04/10 08:07 AM Edit Reply Quote



Well, this is another incredible pick, with the March / April double support. Any sustained price action above the 50 day moving average now at 52p this week could deliver an initial target as high as the March intraday high of 66.75p over the next 2-4 weeks for UKC.

Interesting to see Arbuthnot joining the list of Broker Buys here yesterday.

Maybe a merger is really on its way at last.

UK Coal PLC

FORECASTS
2009 2010

Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Arbuthnot Securities
14-04-10 BUY -114.18 -59.50 -55.03 -18.60

Milkstone Ltd
07-04-10 HOLD -115.00 -60.00 -20.00 -12.00

Evolution Securities Ltd
04-03-10 BUY -114.50 -59.60 -36.10 -12.10

Numis Securities Ltd [D]
29-01-10 BUY -111.10 -57.70 -48.80 -16.30

2009 2010
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus -114.50 -59.54 -36.10 -12.05

1 Month Change 3.27 1.80 0.00 0.05
3 Month Change -11.70 -6.04 -1.80 -0.55

Notes to forecasts
D flag: Numis estimate figures includes the non cash impact of property revaluation


GROWTH

2008 (A) 2009 (E) 2010 (E)
Norm. EPS % % %
DPS % % %

INVESTMENT RATIOS
2008 (A) 2009 (E) 2010 (E)

EBITDA 53.78m -43.10m 32.67m

EBIT 3.28m -91.70m -39.41m

Dividend Yield % % %

Dividend Cover x x x

PER -8.57x -0.90x -4.46x

PEG f f f

Net Asset Value PS 161.10p p p

(hemscott premium)

Moving along nicely today about 16% up for the week.

Not sure wether we are getting corporate action.

AN EARLY LOOK AT SHARES MAGAZINE
15 April, 2010 08:08:41 AM


The Cover Story
* Double your money (Ten stocks set to bounce back): - Begbies Traynor, Connaught, Datacash, Game Group, Findel, HMV, Luminar, Omega Insurance, Paypoint, UK Coal

Dunno what it says............anyone have a copy??????????

From Shares Mag this week:
Share price: 50.3p
Share price low since 1 Jan 2007: 49p (2 Mar 10)
All-time high: 541.6p (15 May 96)
Support level: 49.0p
"The troubled miner has seen its market valuation fall from nearly 1 billion in May 2008 to a mere 150 million. The shares have been hit by operational problems with its underground mines and writedowns in its property portfolio. Coal miner-to-haulage group Hargreaves Services (HSP:AIM) has proposed a merger, having already worked closely with UK Coal in the past on the Maltby colliery, which it subsequently bought, and a previous joint venture called Coal4Energy. Speculation 28% shareholder Peel Land and Property was preparing a bid had given some support to UK Coals share price earlier this year, but the revelation it was Hargreaves instead doing the talking has subsequently seen the share price weaken again. Buying the shares is high risk, yet UK Coals turnaround potential remains intact. After recent writedowns, its property portfolio is still worth 394 million and offers huge potential for building homes and office space.
Net debt stands at 180 million. The priority is to sort out the deep mining issues. A merger with Hargreaves would be a bonus and is not a prerequisite of the turnaround story. If UK Coal goes it alone, we believe the share price has already factored in mining risks and there is considerable upside on the property developments."
(DC)

cheers Harry.