Positive outlook despite underperformance at Maltby

HARGREAVES Services saw profits fall over its first half but said it was on track to meet full year expectations.

The supplier of solid fuels and bulk material logistics posted revenues up 27.1% to £322.8m for the six months ended November 30 2011 compared to the same period the previous year.

However, pre-tax profits dropped over the same period by 16.1% to £13.6m and operating profit by 12.7% to £16.7m.

Hargreaves, which operates Maltby Colliery near Rotherham, one of the UK’s last working deep mines, said trading through the first three months of its second half had been strong.

Maltby Colliery produces more than 1.2m tonnes of coal each year and employs more than 500 people.

Hargreaves said the colliery’s first half performance had been hit by the impact of poor coal yields from a thin coal section which is likely to impact full year production.

It is anticipating production to be down by 100,000 tonnes over the year because of the “geologically challenging” coal face.

The group is set to start operating from a different section of the mine which it said would benefit from thicker coal and from being closer to the pit’s bottom.

Hargreaves expects to hit its annual profit targets through a stronger second half.

Chairman Tim Ross said: “The board expects that this will be another positive year for Hargreaves and we remain on track to deliver for the full year in line with management’s expectations.

“Our investment this year in developing our industrial, surface mining and energy and commodities businesses will reap significant benefits during 2012/13 and beyond. 

“Next year, these new profit streams combined with the existing operations will allow us to generate significant profits and cash. This will give us an even stronger platform to drive the medium and long term growth that we are targeting in Europe and Asia.” 

Hargreaves said other highlights over the half year included contract wins of more than £80m at three major UK steel plants and additional contracts for its energy and commodities arm.

Hargreaves runs production, energy and commodities, transport and industrial services divisions.

Within its production division, its Monckton Rubber Technologies business recycles 30,000 tonnes of waste vehicle tyres per year into rubber crumb and wire at its processing centre in Sheffield.
Markets for the rubber crumb include surfacing for children’s playgrounds and the carpet industry.