UK COAL, the country’s biggest coal miner, saw its shares fall off a cliff yesterday after its own chairman slammed last year’s pre-tax loss of £124.6m as “woeful”.
The company narrowed its losses by three per cent in 2010 but has lost a total of £269.3m and 90 per cent of its market value in the last three years.
“It’s a story of woeful and sustained underperformance that’s been tolerated for far too long,” said Jonson Cox, who took over as chairman last November.
UK Coal is expected to finish a root and branch strategic review of its operations by June.
“Shareholders deserve a far better return than they have had in recent years,” said Cox. “It’s very clear that this business is very heavily leveraged and the future sustainable financing of this group is from equity not from debt.”
UK Coal said its net debt rose 24 per cent to £242m in 2010, but that Lloyds Banking Group has agreed to extend its borrowing facilities.
Deep mine operating costs have doubled from £28 per tonne to £56 per tonne at the firm’s three mines.
Former chief executive Jon Lloyd, who stepped down in November, was awarded a £435,000 pay-off on top of his £344,000 salary last year, the firm’s annual report shows. Departed chairman David Jones was handed a £38,000 golden parachute.
The firm was the biggest faller in the FTSE yesterday, plunging 11 per cent to 34.5p.