Half-year revenue and profits have tumbled at Humber-based, Hargreaves Services, due to “very challenging” market conditions in the UK coal and steel sectors.
The latest six month of trading results show a drop in revenue to £175m compared to £351m for the same period in 2014 affecting pre-tax profits which plummeted from £15.2m to £842,000.
The company state that the results reflect the widely reported pressures in the UK coal and steel markets.
As a result of continuing weak thermal coal prices and demand, and following a number of early closure announcements, the Group is taking action to reduce its exposure to thermal coal markets over the next 18 months
Since the period end the extremely mild and wet weather continue to adversely impact the Group’s coal production and restoration operations
Commenting on the interim results, Chairman David Morgan said: “Market conditions in the UK coal and steel sectors remain very challenging. Given continuing weak commodity prices, low coal demand and the announcement of further coal station closures, the Board has taken the decision to reduce the Group’s exposure to thermal coal markets over the next eighteen months. This follows the decisive actions taken in the past eighteen months to simplify the Group and exit markets such as coke production and trading.
“The recent acquisition of Blackwell represents an important strategic step and the ongoing development of value across the property portfolio continues to make further progress. The Board is also excited by the opportunities being presented to accelerate the development of its international presence in Industrial Services activities. The recent wet and mild weather has further impacted the Group’s short term trading, curtailing coal production and restoration activities, however the Board is confident that profitability can be maintained even in the face of such severe market conditions. The Board has already taken significant steps in reducing costs and restructuring the Group and these efforts are ongoing.”