Member Article

Durham's Hargreaves sees revenue crash from £662m to £341m

Hargreaves Services plc, the Durham-based supplier of solid fuel and bulk material logistics, has revealed pretax losses of £10.6m for the year.

Disclosing financial results for the year ended May 31 2016, the firm’s revenue almost halved dropping from £662m last year to £341m.

Reporting pretax profits of £25m in 2015, the firm - which delivers projects and services in the infrastructure, energy and property sectors - has endured a difficult 12 months.

Tough conditions in the UK coal and steel sectors, coupled with low demand and weak commodity prices hit the firm particularly hard.

David Morgan, Group Chairman, said the period has been one of ‘transition’ for the firm, with the year largely focussing on restructuring the business model and exploring diversification.

Hargreaves announced the acquisition of C A Blackwell Group Limited, a Wakefield-based bulk earthmoving and civil engineering firm, for £11.85m in January.

The move represented the firm’s growing intentions to pursue new opportunities and extend its potential in the earthworks and civil engineering sector.

David Morgan, offered hope for the future, explaining: “In the last two years the Group has been through a radical restructuring and repositioning programme, undertaken in the face of tumultuous market conditions.

“With the restructuring and re-positioning of the Group fundamentally complete, our objective and priority is to demonstrate the intrinsic value of the business as reflected in the Group’s considerable asset base.

“We now have a clear strategy to generate significant shareholder value through the development of a profitable services offering that leverages our core skills, as well as the significant value that can be unlocked in our property and energy portfolio.

“As we recently announced, our target is to generate between £35m and £50m of incremental value from our property and energy project portfolio over the next five to seven years. Across the transition the Group has protected and maintained its strong balance sheet.

“The successful conversion of over £60m of legacy assets into cash will further improve the Group’s flexibility and allow us to consider strategic options to enhance shareholder value.”

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