There's rarely a dull moment at coal supplier Hargreaves Services (HSP). Its Maltby deep mine and fraud-hit Belgian operation lost over £100m before tax last year, but both have been shut down and -with underlying operating profit up 4 per cent to £55.7m - the company starts the new financial year in better shape.
Indeed, the energy and commodities division made a larger than expected £31.9m profit, 12 per cent more than last year. In fact, profit was up over a fifth in the UK and demand remains high. Hargreaves' new Tower joint venture in South Wales generated half the £16.7m profit at the production unit. Bad weather held up progress there earlier this year, but output ramped up during a sunny second half and is still going strong. Expect fewer hold-ups in future now that they're down to the rock. It would have been similarly positive at the industrial services division had it not been for two one-off biomass conversion projects. They lost money, but management has learnt its lesson and will now focus on the core material handling operation, where a first steel sector supply contract drove profit up 39 per cent to £5m. Hargreaves is busy tendering for more business, too.
Broker N+1 Singer expects adjusted pre-tax profit of £61.7m in 2014, giving adjusted EPS of 129p (from 52.2m and 134.6p in 2012).
HARGREAVES SERVICES (HSP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 819p | MARKET VALUE: | £271m | |
| TOUCH: | 815-819p | 12-MONTH HIGH: | 910p | LOW: 530p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 7 | |
| NET ASSET VALUE: | 362p* | NET DEBT: | 66% | |
| Year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 503 | 26.2 | 68.5 | 11.8 |
| 2010 | 460 | 30.7 | 77.5 | 13.5 |
| 2011 | 552 | 36.9 | 91.9 | 15.5 |
| 2012 | 618 | 45.0 | 117 | 17.8 |
| 2013 | 843 | 43.1 | 113 | 20.5 |
| % change | +36 | -4 | -4 | +15 |
Ex-div: 6 Nov Payment: 12 Dec | ||||
