This commentary relates to the results announced by British Coal, a mining company.

It also indicates the approach taken by an incoming chief executive.

Production cost: 130p per gigajoule.

Sale price: 118p per gigajoule. Result, to paraphrase Mr Micawber: misery. For UK Coal’s shareholders, reeling at the 80% cut in the final dividend, the consolation is that unlike Dickens’ eternal optimist, they do not have to wait for ‘something to turn up’.

It already has, in the shape of Gerry Spindler.

The new chief executive’s results commentary savaged almost every aspect of the group’s operational performance, from industrial relations to budgeting and marketing. And there was plenty to criticise: total sales fell to 14.3m tonnes from 18.9m, leaving the field clear for an 18% rise in imports. Costs in the deep mines rose 14%, while the contracted sale price was some way short of international spot prices. Mr Spindler is promising big changes, although he is already describing 2005 as a year of transition.

Discussion points
1 Why might the new chief executive be critical of the budget?
2 What changes might the chief executive be considering in relation to budget preparation?