Hargreaves ‘pleased’ with overall performance

MINING group Hargreaves Services said today that its overall results for the 12 months ending May 31 will be in line with expectations.

Hargreaves Services, which operates Maltby Colliery near Rotherham and Kellingley Colliery in West Yorkshire, said that the overall the performance of its energy and commodities division had been strong.

Hargreaves said: “The UK based coal operations have continued to perform very strongly. Strong margins in sized and speciality coal markets have continued to more than offset the softening in UK power station volumes that we reported in our interim statement.

“Trading levels and profitability levels in Europe have continued to increase and perform ahead of management expectations during the second half.”

In its product division the group said, as expected, that Monckton has continued to perform well through the second half.

The international coke markets have recovered strongly and the group announced it has secured a new three year contract with Xstrata in South Africa to take up to 100,000 tonnes a year as of this month.

Despite an encouraging start, Hargreaves said that underground production at Maltby was disappointing in the second half due to further teething problems with the new T11 production equipment.

It said: “Surface coal production and shipments of fines to Drax have progressed well but have only partially offset the lower underground production. Full year production was 1,056,000 tonnes, slightly below the 1,075,000 guidance provided in December 2009. The next face change is planned for July 2010 with development work and equipment installation proceeding on target.”

Commissioning continues at the first Rocpower plant, which is expected to be fully operational in August.

Planning applications for the next two sites are in process and on course, the group said.

Hargreaves said that its industrial services division has traded in line with management expectations and work is due to start on the new contract won by AJS.

The transport division’s overall performance was slightly ahead of management expectations, said the group.

Hargreaves said: “Performance in tankers has been particularly strong with a quality service offering underpinning existing contracts and helping the group win market share. We remain confident that all three units; dry bulk, tankers and waste are well positioned to benefit from any upturn in volumes when the opportunity arises.”

The group said its net debt of around £88m was in line with management expectations.

As previously announced, Hargreaves said that the merger discussions with Doncaster-based UK Coal have ceased.

Hargreaves said: “We continue to work closely with UK Coal and look forward to a continuing positive trading relationship. A charge of £230,000 will be made to the accounts for the year end May 2010 for aborted deal costs.”