Member Article

Durham’s Hargreaves makes 'good progress' against repositioning strategy following UK coal and steel woes

Hargreaves Services plc, the Durham-based supplier which works across the infrastructure, energy and property sectors, has made solid progress in pivoting its business model after pressures in the UK coal and steel market forced the business to deploying a repositioning strategy last year.

Announcing its interim results for the six months ended 30 November 2016, the company reported revenue of £170.9m, down from £174.8m in the prior period, whilst underlying operating profit for the first half dropped to £2.1m compared with £4.1m in the comparative period.

Notably, the reduction in coal sales and industrial services revenues following the closure of Redcar steelworks and a number of coal-fired power stations was largely offset by the £40.0m of revenue contributed by CA Blackwell.

Despite the slight declines, the firm’s board remain adamant that good progress has been made with the stabilisation of its Distribution & Services activities, the development of its Property & Energy portfolio and its realisation of cash from Legacy Assets all hailed as positive steps forward.

David Morgan, Chairman, said: “It is pleasing to see how much progress we have made towards the three strategic goals we set ourselves a year ago.

“First, earnings from the continuing Distribution & Services operations are well set to deliver operating profit within the target range that we set.

“Second, good progress is being made in creating and then delivering the targeted £35m-£50m uplift in value from our Property & Energy portfolio.

“Lastly, it is very gratifying to see the progress that has been made in the realisation of cash from the legacy assets and the increasing confidence that this realisation will be achieved without the need for any net impairment of the book value.”