Future of Yorkshire coke plant in doubt
HARGREAVES Services today said it is reviewing the future of its Monckton coke plant in Yorkshire.
The North East-based group said volatile coke markets and pricing has hampered the Barnsley plant’s operations and it now may close the plant.
Hargreaves said that difficulties in the financial and commercial position of some producers and customers have added to the challenging trading conditions.
In a statement to the stock market, Hargreaves said: “The group has always recognised the importance of balancing risk with maximising return on capital employed and is aware of the high levels of working capital already invested at Monckton and in its wider coke trading activities. We remain committed to minimising operational risk wherever possible, by avoiding significant open contractual positions.
“Against this background, the board will, in the coming weeks, review whether Monckton can achieve sufficient contractual certainty in current market conditions to justify the level of working capital deployed to support the operation. At the end of May 2014 the coal and coke stocks at Monckton amounted to £17.5m. The group will also look for opportunities to cut working capital levels in our German associate by reducing trading levels until normal market conditions resume.”
In the year to the end of May, Hargreaves saw underlying pre-tax profits rise 6% to £55.1m on revenues which were up 3% to £869.2m.
Chairman Tim Ross said: “This year was challenging for Hargreaves. In difficult market conditions it is testament to the strength of the group that we are able to announce a 6% increase in profits. The group achieved strong profitability on all measures. The review of strategy that the board has commenced will ensure the group is positioned to minimise risk and optimise shareholder value in response to rapidly evolving markets. The disposal of Imperial Tankers for £26.9m, completed earlier this month, is an encouraging first step.”
