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

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.

UKC... UK Coal Chart starting to look positive. Caught MACD moving above signal line which as proved to be very positive in charts of late. I suppose we would be looking to take out short term resistance at 75p first stop.

Coal in big demand......

should help UKC.

http://business.timesonline.co.uk/tol/business/markets/article7100308.ece

Chart starting to look very positive....

This chap usually does very well from his investments.......


19/04/2010

Odey holding interests in both UK Coal and Hargreaves
Business Financial Newswire

Odey Asset Management has this morning revealed that it has an effective 2.96% holding in UK Coal, through direct holdings and derivatives, and a similarly effective 5.03% holding in Hargreaves Services.

On March 10 Heargreaves Services confirmed that it was in the early stages of merger discussions with UK Coal.

Losses have widen from 15 million to 129 million... that's bad.

It is also running out of cash, and it needs to sell its land now.
SELL at 52p

Half-year losses grow at UK Coal as financing costs bite.


In a trading update for the half-year to 26th June, UK Coal said its overall operating loss for the period, including its share of its joint ventures, is expect to be around 52m before revaluation movements and non-trading exceptionals.

Exceptional legal and professional fees of approximately 7.5m were incurred in the first half, principally relating to the refinancing exercise. These, together with around 1m of Harworth maintenance costs, will be treated as exceptional items in the period.

As a result, first half exceptional finance costs are expected to be around 10m (H1 2009: nil), and non-trading exceptional costs are expected to be around 8.5m (H1 2009: 3.7m).

Interest and other financing costs are expected to be around 13.5m (H1 2009: 10.2m), excluding the arrangement fees and the write off of previously hedged fair value movements referred to above.

The total first half pretax loss is expected to be around 94m (H1 2009: 81.5m).

Net debt excluding restricted cash and generator loans/prepayments at 26 June 2010 is expected to be around 170m (December 2009: 114.3m). Including generator loans/prepayments, but excluding restricted cash, net debt is expected to be around 255m (December 2009: 181m).

The Group said it continues to prioritise its safety culture and has seen some significant steps on a long journey in a number of areas in the first half of 2010. In particular, there has been a 50% reduction in the number of major injuries in the first half of 2010 compared to 2009.

Average realised sales price: Reflecting the rise in the world coal price over the period together with the move from our legacy contracts towards new supply contracts, the average realised sales price for the first half of 2010 was 1.97/GJ (H1 2009: 1.80/GJ, FY 2009: 1.87/GJ).

The outstanding tonnage to be delivered under legacy contracts continues to fall and the mix of supply is moving more towards the previously announced new or amended long-term contracts, which significantly increases our long-term contracted coal prices and our short-term cash flows. The legacy contracts will have been largely fulfilled by the end of this year, leaving only a further 2.6m tonnes to be delivered, predominantly in 2011.

Production: Total first half production was 2.7m tonnes (H1 2009: 3.7m tonnes, FY 2009: 7.0m tonnes), of which deep mine production was 2.2m tonnes and surface mine production was 0.5m tonnes (H1 2009: 3.0m tonnes and 0.7m tonnes respectively, FY 2009: 5.7m tonnes and 1.3m tonnes respectively).