Hargreaves anticipates strong second half
Hargreaves Services has said it expects its underlying performance for the six months to the end of November to be in line with expectations while the group anticipates a strong second half.
The group, which delivers key projects and services to the infrastructure, energy and property sectors, said it has enjoyed stable trading conditions in the first half and expects a strong second half with expected outperformance in coal distribution offsetting any risks around the timing of specific property transactions.
Hargreaves said: “We are pleased to report that the problems associated with certain legacy civil engineering contracts in the Earthworks business, reported in the preliminary results on 8 August 2017, have been largely and satisfactorily resolved. Further, a substantial claim has been intimated to the vendors of CA Blackwell and the Group is confident, based on legal advice, that a number of warranties have been breached.”
The group said its European raw materials trading business, Hargreaves Raw Materials Services GmbH, continues to trade strongly, and good progress is being made with the development of the new coal processing plant.
“We are also pleased to note that cost reduction and restructuring measures taken in the Logistics business are already showing benefits resulting in that business trading in line with expectations. This is encouraging following the disappointing performance in the final quarter of last year,” the company said.
“Conditions in the heavy plant markets have improved significantly over the last six months leading to high levels of enquiries, largely from international buyers, for our surplus plant. This bodes well for the generation of both cash and profit from the sale of plant across the remainder of the year.”
Gordon Banham, chief executive of Hargreaves, said: “It is very pleasing to see the progress that is being made in the operating businesses in the UK, Germany and Hong Kong.
“The focus remains on returning all of the company’s businesses to consistent levels of profitability and reducing the volatility of constituent profit streams. We remain focused on reducing the central overhead costs and are making excellent progress in that regard. I am also encouraged by the continuing progress in the development of both the property portfolio and the Brockwell energy spin-off. Given the improved conditions in the plant market we have made it a priority to accelerate the realisation of value and cash from our surplus assets.”
