Hargreaves Services plc on track to meet full year targets

Coal mining and transport company Hargreaves Services plc are 'optimistic' about performance

Hargreaves Services
Hargreaves Services

Coal mining and transport business Hargreaves Services plc says it is “optimistic” about achieving its targets for 2013.

In a trading update published yesterday ahead of its interim results for the six months ended November 30, the County Durham-headquartered company said it was performing “in line with management’s expectations” and was “well placed to deliver a good second-half performance”.

In September, Hargreaves reported group revenues for the year ended May 31 of £843.3m, an increase of £225.4m over the previous year. Despite being hit by a fraud at its Belgium business and the closure of its Maltby colliery in South Yorkshire, the group also saw underlying pre-tax profits from continuing operations rise 5.9% to £52.2m.

The latest update said it continued to make good progress in its surface mining activities.

“Whilst there have been delays restarting a number of newly acquired Scottish sites, the group is pleased to announced that six sites are now operating with the prospect of starting on two further sites in the next few weeks, which will bring activities in line with plan,” the update said.

The closure programme at Maltby was progressing as planned, the expectation being that the mine shafts will have been filled and capped by the end of the financial year as part of the site’s overall restoration programme. As announced on December 9, Hargreaves has also sold the business and assets of Hatfield Colliery Limited to Hatfield Colliery Partnership Ltd (HCPL).

The update continued: “UK bulk coal operations continue to perform ahead of management expectations, benefiting from strong demand from power stations.

“Volumes are further underpinned by sales of coking coal and PCI coal into the steel sector.

“We expect these trends to continue and contribute to a strong second half.”

Hargreaves’ UK speciality coal operations were likewise performing well and the group has now completed a reorganisation of its European operations. Progress had been made in the performance of its core material handling business, resulting in a positive outlook for the second half, while the transport division enjoyed a “very strong” first half.

Net debt on November 30 was £95.6m, in line with management expectations.

The update concluded: “Although risks continue around coke markets, particularly for Monckton, the group is pleased with the strong performance in coal trading and the progress in its surface mining operations. The board considers that the group is well placed going into the second half of the year and is optimistic of achieving its targets for the full year.”

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