Tower production boost for Hargreaves

Admittedly, profits were constricted by rising commodity prices, coupled with a scheduled face-change and lower coal yields at the group’s Maltby Colliery. These factors were responsible for a near 10 per cent slump in underlying operating profits to £18.9m. Full-year production from Maltby will fall short of earlier estimates, but Mr Banham is confident that completion of the new coal-face panel in October should lead to significantly higher yields.

Rising commodity prices also resulted in lower margins at the group’s energy & commodities business, although improving volumes from UK power stations helped drive revenues by over a third to £203m. Significantly, Hargreaves extended its off-take contract at the Hatfield Colliery from one to three years in addition to securing its first supply contract in Germany.

Prospects were also enhanced at Hargreaves’ industrial services division, which pulled-in £80m in new contracts servicing the UK steel sector, while full production at the group’s Tower Colliery will come on stream earlier than expected.

Brokerage N+1 Brewin is holding full-year adjusted EPS forecasts at 120p (2011: 103.7p), and upgraded June 2013 estimates by 5 per cent to 157p.