County Durham-headquartered energy and property firm The Banks Group has recorded a rise in sales and pre-tax profits in its latest annual results.
The family-owned business has reported a combined operating profit across its businesses of £17.4m for the financial year ending 30 September 2018, up from £16.2m in the previous financial year, on group sales of £98.7m, up from £94.6m for the previous period.
Banks Renewables improved sales to £19.8m in 2018 compared to £14.5m in 2017. Operating profits also showed an improvement to £4.5m from £2.6m in the previous year, supported by new wind farms at Lambs Hill near Stockton-on-Tees and Moor House near Darlington.
Banks Renewables’ tenth operational onshore wind farm, the 26-turbine 88 MW Kype Muir scheme in South Lanarkshire, was opened by Scottish Minister for Energy, Connectivity and the Islands Paul Wheelhouse MSP in April this year, while the nearby 51MW Middle Muir wind farm commenced electricity generation in late 2018. Both of these schemes bring substantial additional generating capacity to the Group.
Banks Property increased its year-on-year sales to £30.3m in 2018 from £24.2m in 2017, although the mix of sites sold meant that operating profit fell to £7.6m compared to £10.9m in the previous year.
The property business currently has a forward programme of new schemes at various stages of the development process across both its native North East England, in Scotland and increasingly in Yorkshire, where the company has recently opened a new office.
Banks Mining’s coal sales reduced to £44.7m in 2018 from £52.8m in 2017, with sales split evenly between electricity generation and industrial users such as steel, cement and food producers. Operating profits in the mining business benefitted from efficiencies of operation and an improved coal price to record £5.9m compared to £3.6m in the previous year.
During the year, Banks Mining successfully challenged in the High Court former Secretary of State Sajid Javid’s decision to reject its planning application for its Highthorn surface mine which itself was against the recommendation of the planning inspector he had appointed to assess it. It is now awaiting a decision by Mr Javid’s successor James Brokenshire on whether operations at that site can proceed.
A recent comparative study commissioned by Banks confirmed that the greenhouse gas emissions arising from the mining and transportation of coal mined at its North East sites to customers in the UK were significantly lower than the emissions from the transportation alone of coal imports from Russia, from where most of the country’s imports are sourced.
This means that the business can both mine and transport coal from its surface mines in North East England to UK customers with significantly lower greenhouse gas emissions than are released from just transporting these Russian coal imports over thousands of miles.
Simon Fisher, group finance director at The Banks Group, says: “The Board believes the Group is in good shape to maximise the opportunities available from the markets in which we operate, and for results to remain strong although with some volatility.
“In recent years, we have accelerated the growth in our renewables business as the group shifts its dependence from coal extraction to renewable energy production. We now have 224MW of electricity generation capacity from our portfolio of wind farms and are looking to increase this further by bringing forward further wind and other renewable energy projects.
“Our property division is developing a growing portfolio of high-quality sites across Northern England, and while the nature of our markets means a degree of volatility should still be expected, we expect to see good progress continuing to be made.
“Of the 12 million tonnes of coal needed by the UK during 2018, only 2.6 million tonnes was produced in the country, while Russian coal import volumes doubled between 2016 and 2018.
“Further increasing the UK’s reliance on such imports would simply be off-shoring our environmental responsibilities, would inevitably result in an increase in global emissions and would needlessly miss the opportunity of securing economic, employment and supply chain benefits for the regional and national economies.
“All our operations are specifically designed to bring a wide range of long-term benefits to the communities in which they’re based, in line with our Development With Care approach to our work, and we’re proud of the substantial continuing contribution that our schemes enable us to make to the excellent work of local community groups and good causes in these areas.