Interim Results

6 months ended 30 November 2014

Leaders in Solid Fuel Supply & Bulk Material Logistics

Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

Continuing Underlying Continuing Underlying Interim Dividend Per Share

Operating Profit Diluted EPS

£21.9m 46.9p 10.0p

-29.1% -27.8% +13.6%

Results
• Aside from Hatfield impact, underlying current year broadly in line with management expectations
• Simplification and streamlining strategy progressing well
• Second phase simplification and cost reduction programme has now been initiated
• Sustainable increase to the dividend reflects continued confidence in profit and cash generation

Outlook
• Coal price fall set to reduce mining volumes and profits next year
• Low UK coal burn likely to impact trading volumes next year
• The Group will continue to utilise share buybacks as appropriate

Interim Results – 6 months ended 30 November 2014 2

Overview by Business
Leaders in Solid Fuel Supply & Bulk Material Logistics

Production Energy & Commodities Industrial Services Transport

Operating Profit Operating Profit Operating Profit Operating Profit

£8.0m £9.5m £2.8m £1.6m

(Nov 13: £8.2m) (Nov 13: £16.8m) (FY13: £2.8m) (FY13: £3.1m)

• Strong production from surface mining operations offsetting reduced contribution from Monckton
• On track to achieve 1.3 million tonnes production for the full year from Scottish operations
• Surface mining result in the current year supported by fixed price contracts and hedges
• Reduction in UK Bulk and Speciality volumes and margins during the period
• Reduced coal burn due to low gas prices and mild weather
• Short term turbulence in speciality markets
• Hatfield coal marketing arrangement terminated with £1.8m impact on FY15
• Careful progress in Industrial Services division
• Good start to China Light & Power contract; also developing other international opportunities

Interim Results – 6 months ended 30 November 2014 3

Strategy & Market Update
Gordon Banham, Chief Executive Officer

Interim Results – 6 months ended 30 November 2014 Liverpool Docks, Merseyside

Update on Recent Market Developments
Leaders in Solid Fuel Supply & Bulk Material Logistics

• Significant fall in coal price prompted by supply/demand imbalance in world coal markets

• Recent price levels represent a £5 per tonne drop since our trading update on 12 December 2014

• Price has fallen £14 per tonne since we acquired our Scottish mining assets; unclear whether prices
will remain at this level

• Focus on achieving a significant proportion of highly valued speciality coal production which will help
to mitigate thermal losses

• Production in Scotland now targeted at 1 million tonnes to 31 May 2016

• Customers are expected to slow contract off take and reduce coal purchases in next financial year

• Mild winters and price reductions by UK Coal have caused margin pressure this year in speciality
markets; this is a short term feature and stocks should unwind and normalise in due course

Interim Results – 6 months ended 30 November 2014 5

Strategy
Leaders in Solid Fuel Supply & Bulk Material Logistics

Our strategy is under continual review in light of current market challenges – we

remain confident in the Group’s positioning and direction

Addressing Market Industrial Services Protecting

Challenges Growth Shareholder Value

• We remain committed to UK • We are seeking to progressively • Significant upside value in our

production capability and long term
value in our Scottish assets
• Whilst prices remain low, we will
reduce production targets
• Focus on sites with lowest costs and
highest yields of speciality coal
• We expect overall bulk volumes to
be substantially supported by the
sale and supply of metallurgical
coals in order to make most efficient
use of our port capacity
grow our focus away from the UK
power generation sector
• Particular focus on seeking growth
in the steel sector – both in the UK
and internationally
• Industrial Services operations are
largely unaffected by the price
turmoil in commodity markets
property and renewable portfolio
• The Group enjoys the benefit of a
strong balance sheet
• Net assets of £152.2m at the end of
November represented ~£4.60 per
share
• Intention to sustain a higher
dividend
• Well placed to supply thermal coal
when stocks and demand normalise

Interim Results – 6 months ended 30 November 2014 6

Restructuring and Cost Reduction
Leaders in Solid Fuel Supply & Bulk Material Logistics

Phase 1 – Previously announced simplification plan

• Plan is on track; targeted to be substantially complete by 31 May 2015
• Simplification plan expected to achieve net cash generation across Group of over £30m by 31 May
2015 and this is expected to increase to over £40m by 31 May 2016

Phase 2 – Further opportunities to restructure and reduce fixed cost base

• Review to cover all divisions and all levels of the organisation
• Management structure and business operations of the E&C and Production divisions will be merged
into a single new operation
• Operations of these two divisions have become increasingly intertwined; the Production division
supplies a significant proportion of the speciality coal sold by the E&C division
• Integration will increase transparency and drive cost and operational efficiencies
• The two divisions will be combined to form a new Coal Production & Distribution division

Interim Results – 6 months ended 30 November 2014 7

Financial Performance
Iain Cockburn, Finance Director

Interim Results – 6 months ended 30 November 2014 Maxibrite, Llantrisant, South Wales
Income Statement Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

Nov 2014 Nov 2013 Movement

£m £m %
Continuing Revenue 351.2 460.5 -23.7%
Continuing Underlying Operating Profit 21.9 30.9 -29.1%
Continuing Net Interest Expense (1.6) (2.4) -33.3%
Continuing Underlying Profit Before Tax 20.3 28.5 -28.8%
Loss for the period from Discontinued Operations (1.1) (2.3) -52.2%

Effective Underlying Tax Rate 22.7% 23.2% n/a

Continuing Underlying Diluted EPS 46.9p 65.0p -27.8%
Interim Dividend Per Share 10.0p 8.8p +13.6%

Interim Results – 6 months ended 30 November 2014 9

Group Simplification Programme
Leaders in Solid Fuel Supply & Bulk Material Logistics

Net cash generation of over £30m expected from simplification programme by 31 May
2015 and this is expected to increase to over £40m by 31 May 2016
Movement
P&L in Net Debt
Simplification Summary – H1 P&L and Cash £m £m
Gain on disposal of Imperial Tankers 16.8 27.5
Closure of Monckton Cokeworks (15.2) (0.2)
Closure of tyre crumbing operation (2.8) (1.7)
Closure of MIR Trade JV - 2.2
Other costs of simplification strategy (2.5) (2.5)
Impact on Group Operating Profit (3.7) 25.3
Fair Value Losses on Derivative Financial Instruments 1 (1.0) -
Impact on Group Profit Before Tax (4.7) 25.3
Corporation Tax Saving 3.0 -
Impact on Group Profit After Tax/Improvement in Net Debt (1.7) 25.3

1 Interest rate swaps made ineffective by the reduction in net debt as a result of the Group Simplification Programme

Interim Results – 6 months ended 30 November 2014 10

Cash Flow Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics

Monckton Other
Underlying Closure Simplification Nov-14 Nov-13
£m £m £m £m £m
EBITDA 29.2 (4.6) (4.2) 20.4 35.2
Working capital (11.0) 4.4 2.2 (4.4) (37.0)
18.2 (0.2) (2.0) 16.0 (1.8)
Interest (1.3) - - (1.3) (2.1)
Taxation (2.2) - - (2.2) 1.5
Capital expenditure – investment in mining assets (4.5) - - (4.5) (4.0)
Capital expenditure – net underlying - - - - (3.6)
Net Dividends (3.9) - - (3.9) -
Share buyback (1.5) - - (1.5) -
Disposal of Imperial Tankers - - 27.5 27.5 -
Germany reorganisation - - - - 10.2
SRG acquisition - - - - (18.2)
Other (0.8) - - (0.8) 0.7
Discontinued Cash Flows (0.9) - - (0.9) -
Total Movement in Net Debt 3.1 (0.2) 25.5 28.4 (17.3)

Interim Results – 6 months ended 30 November 2014 11

Balance Sheet Highlights
Leaders in Solid Fuel Supply & Bulk Material Logistics
November 2014 May 2014
£m £m
Goodwill and Intangibles 8.4 17.8
Investments in JVs 5.1 6.8
Tangible Fixed Assets 64.4 80.3
Assets held for resale (Discontinued) 6.0 8.2
Working Capital 128.4 124.5
Scottish Property Portfolio 8.6 8.4
Derivative Financial Instruments (1.3) 3.2
Retirement Benefit Obligations (4.3) (5.6)
Provisions (10.9) (9.2)
Deferred Tax 1.6 (2.2)
Corporation Tax (13.5) (13.4)
Net Assets Before Borrowings 192.6 218.9

Net Debt (40.4) (68.8)

Net Assets 152.2 150.1

Gearing (Debt/Equity) 27% 46%

Continuing Interest Cover (times) 23.0 15.1
Debt/EBITDA (times) 0.7 1.0

Interim Results – 6 months ended 30 November 2014 12

Solid Balance Sheet
Leaders in Solid Fuel Supply & Bulk Material Logistics

The Group enjoys the benefit of a strong balance sheet – a large proportion of value
resides in highly marketable tangible fixed assets and liquid working capital

Goodwill & Intangibles Tangible Fixed Assets Working Capital Property Portfolio

• £6.0m relating to a the • £18.9m highly • £128.4m includes ~£80m • £8.6m Scottish property
acquisition in 2009 of marketable yellow plant of Readily Marketable portfolio
Coal4Energy and the and mining equipment in Inventory (RMI) • All valued at cost
Maxibrite briquetting our Scotland and • £6.0m Assets Held for
facility in Wales Industrial Services • Includes major potential
Resale includes:
businesses housing development
• £1.3m relating to our • £5m Maltby East of Edinburgh
Industrial Services business • £6.2m other plant and underground (Blindwells)
equipment
• £1.1m Other equipment (we are • No value carried on
• £19.5m Land & Buildings confident of achieving balance sheet for wind
in excess of book value
• £7.4m Transport fleet farm projects
for the assets)
• £10.6m Mining assets • No value carried on
• £1m remaining stock in balance sheet for coal
• £1.8m Other Belgium (now realised) reserves

Interim Results – 6 months ended 30 November 2014 13

Summary & Outlook
Gordon Banham, Chief Executive Officer

Interim Results – 6 months ended 30 November 2014 Duncanziemere Surface Mine, East Ayrshire
Summary
Leaders in Solid Fuel Supply & Bulk Material Logistics

Aside from Hatfield impact, current year broadly in line with management
expectations
Current trading is
progressing
substantially in line
• withResilient
management H1 performance with £21.5m operating profit
expectations
• Strong cash generation leading to strengthened balance sheet
• Coal contract and hedges provide protection against low coal prices and demand through to the
end of April 2015
• Speciality markets subdued with soft demand and prices following second mild winter
• Group simplification and debt reduction initiative are progressing well
• Dividend payout not vulnerable to foreseeable short-term pressure on profits

Interim Results – 6 months ended 30 November 2014 15

Outlook
Leaders in Solid Fuel Supply & Bulk Material Logistics

Robust strategy and positive long-term outlook

Current trading is
progressing
Trading
•substantially next year could be the most challenging period the Group has experienced
in line
with management
• Lower Scottish surface mining production targeted at 1 million tonnes
expectations
• E&C division bulk volumes target reduced to 2.5 million tonnes
• Lower contribution from Tower in next financial year
• Short-term pricing pressure in speciality markets
• The Group is well placed to weather this period and to continue to generate cash
• We remain optimistic concerning the longer-term prospects of coal markets in the UK

Optimal positioning for market changes and opportunities

• Well placed to exploit coal reserves if market prices improve
• Latent value from property and renewable assets
• Positioned to be the last significant player in the UK coal space

Interim Results – 6 months ended 30 November 2014 16

Appendices

Interim Results – 6 months ended 30 November 2014 Glenmuckloch Restoration Project, Dumfries & Galloway
Appendix 1: International Coal Price
Leaders in Solid Fuel Supply & Bulk Material Logistics
Apr-Jul 2013 8th Sep 2014 12th Dec 2014 Feb 2015
Acquisition of ATH/SRG Results announcement Trading update Change since last market update

£60.00 GBP/USD:
GBP API2 GBP/USD: GBP/USD: GBP/USD:
1.53 1.63 1.55 1.52

£55.00

£14 API2 fall in

£50.00 22 months

£45.00

£40.00

£35.00

£30.00
Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15

FY15:
~1.3m tonnes locked in FY16 API2: £50 FY16 API2: £46 FY16 API2: £41
through hedges & fixed price
contracts at £55 per tonne

Interim Results – 6 months ended 30 November 2014 18

 Appendix 2: UK Power Market – Coal Fired Power Stations
Leaders in Solid Fuel Supply & Bulk Material Logistics
2012Coal 2016 Coal 2020 Coal
Station Operator Capacity MW Burn (mt)1 Burn (mt) 1 Burn (mt) 1
Cottam EDF 2,008 4.4 3.5 3.1
Drax Drax 3,870 9.0 4.5 4.5
Fiddlers Ferry SSE 1,980 4.2 3.2 2.8
Longannet Scottish Power 2,304 4.8 3.2 2.7
Ratcliffe on Soar E.ON 2,000 4.4 3.1 2.8
West Burton EDF 2,012 4.4 2.3 1.9
Aberthaw 2 RWE 1,586 3.2 3.5 2.5
Rugeley GDF Suez 1,006 2.2 1.5 1.0
Eggborough Eggborough 1,960 4.4 1.0 -
Ferrybridge (2 of 4 units) SSE 980 2.1 1.3 -
Lynemouth RWE 420 1.2 - -
Operating Stations 20,126 44.3 27.1 21.3
Cockenzie Scottish Power 1,200 2.4 - -
Didcot A RWE 2,060 4.2 - -
Ferrybridge (2 of 4 units) SSE 980 2.1 - -
Ironbridge E.ON 900 2.0 - -
Kingsnorth E.ON 1,974 1.5 - -
Tilbury RWE 1,074 0.3 - -
Teesside SembCorp 280 0.3 - -
Uskmouth SSE 363 0.6 - -
LCPD Opted Out & Closed Stations 8,831 13.4 - -
28,957 57.7 27.1 21.3
1 Latest Hargreaves estimate
2 Aberthaw is unique in burning low volatility coal sourced largely from mines in Wales – including the Tower Project

Interim Results – 6 months ended 30 November 2014 19