Rising commodity prices meant record results for Hargreaves Services, which owns the Maltby colliery and supplies coal to the UK's power stations. Operating profit from production more than doubled to £8.3m, while strong minerals trading boosted profits in its energy and commodities unit by 73 per cent to £4.5m.
Meanwhile, the company successfully locked customers into long term contracts, having sold all but 15,000 tonnes of this year's production, including 1m tonnes at £40 per tonne for at least the next two years. That's significantly higher than the current spot price of £15 per tonne and above the £32 per tonne cost of production.
The bulk haulage business was hit hard by the downturn in construction, though. Chief executive Gordon Banham said it could fall short of full-year operating profit targets by as much as £0.5m, but said he would not consider disposing of the business, which he sees as key to "glueing" the company's services together.
Broker Brewin Dolphin expects 2009 pre-tax profits of £28.5m and EPS of 75p, up from £19m and 50p in 2008.
| HARGREAVES SERVICES (HSP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 590p | MARKET VALUE: | £155m | |
| TOUCH: | 560-590p | 12-MONTH HIGH: | 650p | LOW: 429p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 231p* | NET DEBT: | 117% | |
| Half-year to 30 Nov | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 174 | 6.59 | 15.7 | 3.30 |
| 2008 | 297 | 12.2 | 29.0 | 3.80 |
| % change | +70 | +85 | +85 | +15 |
Ex-div:25 Feb Payment:24 Mar *Includes intangible assets of £23.0m or 87p a share. | ||||
