UK Coal, the company that owns almost all of the country's mines, called on the City yesterday to view it as an £800m property developer rather than just a miner, as reported by The Guardian in an article by Terry Macalister published on their website.
The move had an immediate impact with shares rising 14% to 303p as the inheritor of many British Coal Board assets stressed the potential value of its 49,500 acre land bank rather than its main business as an energy company. Chief executive Gerry Spindler and a newly appointed public relations firm brought together about 60 property analysts to outline its new focus on land development.
Bridgewell Securities, one of those invited to the meeting, has put a 625p target price on the shares. "The significant value of the brownfield land has not been recognised by the market before," it said. Mr Spindler told the investment banks that a property portfolio valued in the company's accounts at £274m could be worth £800m within six years as abandoned sites were turned into new homes and business parks. But he dismissed any suggestion that UK Coal would pour all its management energy into property and risk leaving the coal mining arm to wither on the vine.
The land from closures of facilities such as the Prince of Wales colliery near Pontefract, in West Yorkshire, has been slowly developed by UK Coal. Under its new American chief executive it is making a determined attempt to market it fully. Jon Lloyd, brought in this summer from HBOS bank to head a property arm, said its planned developments could bring much-needed housing and create thousands of jobs. Among the first of 60 planned schemes is one to build 900 homes and provide 250,000 sq ft of offices and light industrial premises. Up to 1,000 jobs could be created in companies eventually located on this site and the development work over ten years would provide many jobs in building and construction.
