Scottish Coal owner’s profits slump

SCOTTISH Resources Group (SRG), the coal miner and land developer which abandoned a stock market floatation last summer, will today unveil a 90 per cent slump in profits after lower coal prices and increased investment took their toll.

The Alloa-based firm, which operates nine open-cast mines under the Scottish Coal banner and employs some 1,000 staff, will report pre-tax profits plunged from £28.4 million to just £2.6m in the year to 26 March.

Chief executive Don Nicholson, pictured below, blamed lower coal prices after there was no repeat of the peak in payment rates that came in the previous financial year.

SRG’s average sales price fell from £2.35 per giga-joule – an industry measure of the amount of energy extracted – to £2.15. Coal sales were flat at four million tonnes, with turnover falling from £229.9m to £209.2m. Production edged up from 3.4 million tonnes to 3.5 million tonnes.

Investment in new sites rose from £5.2m to £17.1m but fell in plant and equipment from £17.3m to £14.8m. Total investment over the past two years now stands at £58.4m.

Nicholson was up-beat about the prospects for the current year. He said: “We are confident in the outlook for the group following two years of heavy investment in the business.

“The current year average contracted coal prices are in excess of those achieved in the 2009-10 year.”