Profits halved at Hargreaves as £12.2m restructure hits hard

RESTRUCTURING efforts and the plummeting price of coal have meant that pretax profits have been slashed at Hargreaves Services.

Pretax profits more than halved at the firm, which sources and processes bulk materials, from £52.1m for the year to 31 May 2014, to £24.9m in the same period to this year.

Revenues also took a hit, dipping from £869.2m to £662.2m.

During the £12.2m restructure Hargreaves merged the Energy and Commodities and Production Divisions.

The firm has also been looking into ways to move into renewables, biomass and material-handling sectors, as “the political will to accelerate the removal of coal from the UK energy mix… is even stronger now than it was twelve months ago.”

Hargreaves said that in the past twelve months, a “perfect storm” of low coal prices and a collapse in UK coal import volumes have adversely affected the whole sector.

Coal prices have been falling, and are now at £44 a tonne, compared to £53 in 2013 when the firm bought their Scottish mining business.

The Durham-based firm undertakes coke manufacturing at a site in Barnsley, where they have been processing the material for 130 years.

Hargreaves also has a head office for its solid bulk fuels division in Glasshoughton in West Yorkshire.

Chairman Tim Ross said: “The last two years have presented the coal industry with extremely challenging market conditions.

“The Board has worked hard to ensure controllable risks are managed and to minimise the impact of risks beyond our control. We were clearly right to initiate the Simplification Programme last year.

“With a significant restructuring exercise largely behind us, we can concentrate on our strategic options to deliver future shareholder value.”