1st Aug 2018 12:46
LONDON (Alliance News) - Hargreaves Services PLC on Wednesday said its profit decreased sharply in financial 2018 due to the weak performance in its Distribution & Services business.
The company, which delivers services to the industrial and property sectors, reported pretax profit of GBP500,000 in the year to the end of March, down significantly compared to GBP4.7 million a year earlier, as revenue fell to GBP297.1 million from GBP342.7 million.
Despite that, the company maintained its interim dividend at 4.5 pence per share.
During the year, Hargreaves sold its Legacy assets, which generated GBP12.5 million revenue the year before. Further GBP40.9 million reduction came from the Distribution & Services business, which includes Production & Distribution unit, Specialist Earthworks unit and Industrial Services unit.
Revenue in Production & Distribution segment was GBP137.4 million, down from GBP153.6 million the prior year due to lower volumes of low margin thermal coal being traded.
The Specialist Earthworks business recorded revenue of GBP78.8 million, down from GBP108.6 million reported a year earlier due to the lower income from its three legacy civil contracts.
Turning to Industrial Services unit, revenue rose 7.0% to GBP70.0 million from GBP65.4 million, boosted by operation in Hong-Kong, which improved by 19% year-on-year.
The company's property business, Hargreaves Land, contributed GBP11.7 million of revenue, up from GBP3.4 million the year before. The increase was driven by the sale of land.
"As revenues from traditional markets decline, operational focus is on risk management and margin improvement," said Chairman David Morgan.
"The board looks forward to an improvement in cash generation and underlying operating profits," added Morgan.
Shares in Hargreaves were down 1.4% on Wednesday at 348.92 pence each.
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