Partner Article

Durham’s Hargreaves remain resilient amidst unprecedented coal market conditions

Durham-based industrial supplier Hargreaves Services plc has endured a difficult first six months of the year amidst difficulties and turmoil within the coal and coke markets, affecting the group’s profits.

Challenging market conditions, particularly in the coke markets, are reportedly unprecedented and have prompted The Hargreaves Board to look carefully at its strategic options and to take proactive steps to streamline and simplify the Group’s operations.

These measures included the disposal of Imperial Tankers, the company’s bulk tanker business, and the managed closure of their coke production operation at Monckton.

The underlying operating profit for the first six months was £21.9m, a reduction of £9.0m compared with the comparative period mainly reflecting the impact of lower volumes on the company’s Energy & Commodities (“E&C”) Division.

Underlying profit before tax was £20.3m compared with £28.5m for the comparative period.

Chairman Tim Ross said:“The market conditions we are currently experiencing are unprecedented and very challenging.

“The Group simplification programme and focus on reducing debt ensures that the Group is well placed to weather the current difficult trading conditions for such time as they persist.

“Although there are challenging times to face in the coming financial year the Group is expected to continue to be profitable and to generate meaningful surplus cash.

“Reflecting the Group’s inherent strength and solid financial position, the Board has the confidence to increase the interim dividend in line with prior guidance.

“Although we are unable to control factors such as coal price and coal demand, the management team is proactively taking all the sensible steps and measures to manage current market conditions whilst leaving the Group well placed to benefit when the market improves.”

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