Member Article

Banks Group reports healthy profits despite coal market slowdown

Durham-headquartered energy firm The Banks Group has reported pretax profits of £4.6m for its latest financial year to 2 October 2016 despite a significant drop in year on year revenue.

The business, which last year marked its 40th anniversary, has interests across the north of England and Scotland in onshore wind farms, property schemes and surface mines.

Also posting an operating profit of £11m, the firm however could not match its sales highs of the previous year, recording overall group revenues of £74m down from £101m in 2015.

Banks explained its former strong coal sales stemmed from coal generators building stocks in 2015, in advance of increased taxes on coal use.

The period did mark a successful year for its Renewables division, which secured a transformational £210m investment package to support the construction of its next three onshore wind farms.

Banks Mining is currently awaiting the outcome of a public inquiry into Northumberland County Council’s unanimous decision to approve the firm’s Highthorn surface mine proposals, which would create at least 100 new, well–paid, full-time jobs, invest £87m into the Northumberland economy, keep a total of £120m within the UK economy by not importing three million tonnes of coal that would otherwise come from overseas suppliers and make supply chain contracts worth a total of £48m available to locally-based businesses.

Simon Fisher, group finance director at The Banks Group, said: “The group’s overall performance is satisfactory, with a profit after tax of £4.6m.

“We are in a strong position to take advantage of opportunities across all our business areas with evidence of strong growth across the group since the year end.

“Our property division performed extremely well last year as market conditions further improved, and we expect to see our portfolio of successful planning applications and completed developments to continue to grow this year.

“The investment package we recently secured for our next three onshore wind farms is a real expression of confidence in both Banks Renewables and the wider UK onshore wind sector, and we firmly believe that onshore wind will continue to play a key role in delivering lowest cost green energy for the UK.

“Global coal markets were depressed during 2016, but we saw significant corrections to market conditions in the second half of the year, with the result that price and demand for our coal in the UK has recovered strongly.

“Surface mining will remain a core part of our operations for the foreseeable future as the country continues its transition to a low carbon economy, and we see continuing demand in the UK for the high-quality coal from our mines across various markets.

“Overall, we expect to see continued development in each of our three core areas, and growth in turnover and profits both for our next financial year and in the longer term.”