UPDATE 2-UK Coal up on supply contracts; swings to FY loss

* Signs four new or revised supply contracts

* Shares jump 15.5 percent to two-month high

* Year pretax loss 15.6 mln stg vs 69.0 mln profit (Adds comments from CEO, further details, share price)

By Julie Crust

LONDON, April 27 (Reuters) - UK Coal Plc (UKC.L), Britain's biggest producer of coal, said it swung to an annual pretax loss on Monday following a smaller gain in its property portfolio, but its shares surged on new and revised supply contracts.

At 0802 GMT, the shares were up 15.5 percent at 122.75 pence, a two-month high.

UK Coal said it signed new or amended long-term supply contracts with Drax DRAX.L, EON EONG.DE, EDF Energy (EDF.PA) and added Scottish and Southern Energy (SSE.L) as a new customer.

The group expects the cash flow benefits from these contracts in 2009 to be about 85 million pounds ($124 million), with around a further 15 million pounds on top of this in 2010.

"It will make a huge difference to the company," Chief Executive Jon Lloyd told Reuters.

"It enables us to ensure that the investment development into our new seams at Kellingley and Thorseby continue to completion at the end of this year and puts us in a far stronger position in terms of predictability of production."

The company will provide Scottish and Southern with a total of 3.5 million tonnes of coal starting later this year with deliveries to 2015. These deliveries, which will make up about 10 percent of its annual contract book, are at market prices, but with caps and floor prices.

Scottish and Southern also agreed to provide a loan, repayable over the period to 2014, to assist in funding UK Coal's investment.

SWING TO LOSS

UK Coal moved to a pretax loss of 15.6 million pounds ($22.75 million) from a profit of 69.0 million pounds in 2007. Its property portfolio delivered a valuation gain of 23,000 pounds in 2008, down from 66.8 million pounds the previous year.

Annual production and coal prices were in line with guidance given in January.

UK Coal's revenue grew 19.5 percent to 392.5 million pounds helped by coal prices. The average sales price per gigajoule received for its coal rose to 1.92 pounds in 2008 from 1.62 pounds.

However, the market price for coal fell from a high of 4.40 pounds a gigajoule last summer before demand dropped.

"We see this temporary low as Europe adjusting to the dramatic economic downturn," said Lloyd.

Full-year production was unchanged at 7.9 million tonnes, in line with January's pre-close statement, but down slightly from the 8.0 million guidance given last October, while output in the first quarter of 2009 was 1.7 million tonnes.

It expects to produce around 8.3 million tonnes in 2009.

The RICS valuation of the group's property portfolio as at December 2008 was 422 million pounds, up from 411 million in December 2007 but down from 438 million at June 2008.

It is looking to doubling its property portfolio to about 886 million pounds over the next five years.

($1=.6857 Pound)

(Editing by Simon Jessop and Rupert Winchester)