County Durham-headquartered mining services group Hargreaves Services Plc has announced it has plans for further growth and investment after posting strong interim results for the six months ended November 30, 2013.
The company, based at Esh Winning, reported pre-tax profits of 29.7m during the period, up 41.4% on the same period in 2012.
Revenue also spiked by 28% compared to the previous year, reaching £460.5m, and the company’s interim dividend has been increased to 8.8p per share.
Hargreaves chairman Tim Ross said: “Following a transitional year for the group, we are pleased to announce a strong set of results for the six months ended November 30, 2013. We continue to work hard in a dynamic and challenging coal market and the board remains confident of achieving its expectations for the full year.”
The results come after the group completed two acquisitions of mining assets in Scotland.
According to the interim report, it is now “on the front foot and looking again for growth and investment opportunities, both in the UK and abroad.”
In the UK, it is looking for further acquisitions and partnership opportunities and is hoping to create closer relationships with owners of generation assets. “We believe that longer-term sourcing arrangements and relationships will be key to facilitating continued investment in coal production assets,” the report said.
Throughout the period, the company’s industrial services division’s revenues were down slightly at £57.2m, reflecting the downsizing in the group’s engineering services business announced at the end of last year.
In the energy and commodities division, however, revenues increased dramatically by £102.3m to £332.2m, driven by increased coal volumes in to power stations and steel works. Transport revenues also increased from £40m to £45.9m.
During the period, coal prices continued to fall.
However, the company said: “We remain of the view that, despite current energy policy, coal will continue to have a significant role to play in the UK’s transition from fossil fuel-based generation to renewable generation for many years to come.
“Should coal prices improve, we would expect to see a significant increase in the profitability and potential scale of the surface mining business.”