30th May 2014 09:40
LONDON (Alliance News) - Hargreaves Services PLC Friday said profit in its energy and commodities, transport and industrial services units has remained resilient in recent months, but its production unit has continued to struggle and full-year profit in that business will be down.
In a trading update for the year to end-May, the solid-fuel supply and bulk-material logistics company said that within its production unit, coke markets have presented challenging trading conditions for its Monckton business and contract renewals have seen continued pricing pressures during the second half.
It added that its surface mining operations have performed well since the end of February and current production run rates are encouraging, but the delays in the first half of the year in starting operations and the extremely wet weather in January and February meant it has not been able to recover all of the shortfall in production.
"The combined effect of these factors is anticipated to reduce the contribution from the production division in the financial year by between GBP3 million and GBP5 million.
It expects to put out full results for the year on September 9.
Its pretax profit increased to GBP29.7 million in the first half of the year, from GBP20.1 million a year earlier, as revenue rose to GBP460.5 million, from GBP359.8 million, Its newly acquired Scottish surface mines came into operation and volumes from its energy and commodities division increased significantly during the period. However, the start Scottish of the Scottish operations was delayed.
Hargreaves Services reported a pretax profit of GBP43.1 million in fiscal 2013, down from GBP45 million a year earlier, as exceptional costs for the closure of some operations offset a 37% increase in revenue. Its underlying pretax profit, which excludes exceptional items and amortisation of acquired intangibles, rose to GBP52.2 million, from GBP49.3 million.
Analysts are expecting the company to report a pretax profit of GBP61.4 million in fiscal 2014, according to consensus forecasts from three brokerages on Hemscott.
Hargreaves Services shares were down 6.2% at 778 pence Friday,
By Steve McGrath; [email protected]; @SteveMcGrath1
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