1st Sep 2014 08:23
LONDON (Alliance News) - Hargreaves Services PLC Monday said it has sold its subsidiary Imperial Tankers Ltd to Sutton Transport Group in a deal worth GBP26.9 million.
AIM-listed Hargreaves said the sale is the first step in implementing a new strategy to focus the group on its core strengths, simplifying operations and ensuring the business is well placed to respond to changes in market conditions.
The company said the tankers business has grown steadily under its ownership. However it offers limited synergies with its other operations and now falls outside the group's core activities.
Imperial Tankers generated pretax profit of GBP1.6 million on revenue of GBP29.7 million for the year ended May 31.
Hargreaves Services said that following the disposal of Imperial Tankers it will continue reviewing its operations. The review will seek to identify and validate opportunities to simplify group structure, increase operational focus and "liberate" fixed and working capital.
As the review progresses and the outcome of the current strategic initiatives take shape, the group plans to consider its "optimal capital structure" and distribution policy, ensuring that they are properly aligned to the long-term expectations and requirements of both shareholders and the group.
Hargreaves said it will also look into reducing debt.
In addition, the company said it will continue to grow its international services business, building on its recent contract wins with China Light and Power and its increased credentials and experience in the steel sector.
Hargreaves said it does not expect to need to deploy significant capital to support this initiative.
Hargreaves Services shares were quoted down 4.1% at 759.00 pence Monday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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