The UK giant recorded profit before tax and exceptional cost of sales at £1.3 million and loss before tax of £0.8 million.

Much of the company’s gains can be attributed to the sell of its property portfolio, where it raised £8.3m in the six months to June. The company added further sales would provide a steady cash flow for at least 10 years.

“The Company has continued to make progress in reducing mining costs. I am particularly pleased with the performance of Daw Mill, which has overcome last year’s difficulties, and the introduction of flexible working at Maltby,” said UK Coal chief executive Gordon McPhie.

The group said sales of coal were up three per cent in the first half at 9.9m tonnes.

Deep mine production was down from 8.3 million tonnes in the first half for 2002 to 7.9 million tonnes in 2003. Six collieries equalled or bettered output compared to the corresponding period last year, however the closure of Prince of Wales Colliery and the Selby Complex reduced overall production for the period.

The Selby Complex has continued to make losses due to poor geological conditions on some of the final faces. The Complex has incurred an operating loss of £13.5 million in the period. The company said whilst costs will reduce as development is curtailed, ongoing geological and operating difficulties may result in further losses in the second halfyear.

Daw Mill Colliery has continued to make steady progress. The face is now clear of the area affected by geological disturbances and output for the period averaged 35,000 tonnes per week.

“Overall performance has improved in our ongoing deep mines, driven by Project 105 initiatives to reduce unit costs,” said McPhie.

“The investments made at Daw Mill and other ongoing collieries will ensure we retain the capability to bridge the production gap created by the cessation of production at the Selby Complex.”