Strong financial performance from The Banks Group

June 11, 2020 | Group News

Pictured above: The Banks Group's group finance director Simon Fisher

County Durham-headquartered energy and property firm The Banks Group has recorded a strong set for results for its last financial year.

The family-owned employer has reported combined profits across all of its businesses of £18.3m for the financial year ending 30 September 2019, up from £9.5m in the previous financial year.  Group sales of £109m are also up from £99m in the previous period.

Simon Fisher, group finance director at The Banks Group, says: “The Board believes that, despite the potential impact of Covid-19, the group will be in a good position to maximise the opportunities available from all the markets in which we operate provided new mines are consented to replace those nearing completion”

By the year end, the group employed 348 staff and had provided local community benefits amounting to £889,000. Both of these were increases on the previous year.

While year-on-year coal volumes were down eight per cent, Banks Mining saw turnover increase from £44.7m in 2018 to £47m as a result of stronger market prices for coal sales to the UK industrial sector.

Banks Mining is still awaiting a decision from Secretary of State the Rt. Hon Robert Jenrick MP on whether operations at its proposed Highthorn surface mine in Northumberland can proceed, as well as a decision from Newcastle City Council for a new mine at Dewley Hill in Newcastle and a decision from Durham County Council on plans for a small extension to its Bradley surface mine in County Durham.

These new mines are urgently needed to replace the Brenkley Lane, Shotton and Bradley mines that are now nearing completion, and to maintain group employment at 348.

Simon Fisher continues: “Our mining business continues to transition sales away from electricity generation to industrial customers in the steel, cement and brick manufacturing industries where no viable alternative low carbon sources are yet available.

“Over 60 percent of coal sales in 2019 were to industrial and heritage customers, and with the phase-out of coal for use in UK electricity generation, this proportion is anticipated to grow to 100%.”

The Group’s Renewables businesses enjoyed a good year, with the Kype Muir and Middle Muir wind farms in Scotland coming on stream after two years of construction to add 139 MW of green electricity generation capacity and to boost Banks Renewables’ total generation capacity to 224 MW.

Sales during 2019 improved to £37.9m from £14.6m in the previous year, and further increases are expected in 2020 with a full year of energy generation from Kype Muir and Middle Muir.

Simon Fisher says: “We have a pipeline of wind farm sites in development with a total potential capacity of over 200MW, and further technologies including solar power generation and battery storage are being assessed for future deployment.”

Banks Property’s year-on-year sales fell from £30.3m in 2018 to £16.2m last year.  The business reduced the number of its legacy brownfield sites through sales during the year, with more set to follow, while a number of new sites have been secured for development in the North East and Yorkshire.

Simon Fisher continues: “A legacy of the Covid-19 pandemic will be for policymakers to reinforce the importance of maximising UK raw material supplies across all sectors, including industrial users of coal and fire clay, where this can be done economically.

“We have consistently demonstrated that our mining business has the capacity to be at the forefront of meeting this need with a fraction of the greenhouse gas emissions associated with importing these essential minerals from overseas.

“The UK currently imports 86% of its need for coal even though the extra greenhouse gas emissions caused by dragging this coal halfway around the planet are enormous.  UK industry will continue to need essential minerals like coal and fireclay to manufacture raw steel and cement and to make bricks for house building for at least the next 10-15 years.  “There is no environmental or economic sense whatsoever in sourcing supplies from thousands of miles away when they are readily available at home.

“The impact of the Covid-19 outbreak is now being felt to varying degrees across our portfolio.  As an essential supplier of both electricity and coal to UK consumers and industry, and to the credit of our skilled and dedicated workforce, we have ensured our operations across these businesses have maintained essential supplies.

“All our operations have continued to bring a wide range of long-term local benefits to the communities in which they’re based, in line with our Development with Care approach.

“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 and will be maintaining and strengthening our commitment to support these communities as they begin to recover from the impact of the coronavirus outbreak.”

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