Companies: HSP   

Energy, mineral and waste sectors supplier and miner Hargreaves Services has increased annual pre-tax profits 86 per cent to £17.9 million.

The Durham-based company lifted turnover 69 per cent to £405 million in the year to May and claims a ‘strong order book and forward revenue visibility’. Maltby Colliery, the UK’s last coking coal mine, which AIM-quoted Hargreaves bought in early 2007, contributed £6.3 million to operational profits of £22.1 million, as soaring coal prices and tight cost controls more than compensated for lower-than-expected production of just over one million tonnes.

Earnings rose 78 per cent to 46.7p a share and the company proposes a 14 per cent full-year dividend hike to 10.3p a share. With net debt cut by three-quarters to £10.7 million thanks to positive cash generation in the second half-year, chief executive officer Gordon Banham says Hargreaves, which completed three takeovers in 2007-08, remains ‘focused on pursuing further organic and acquisitive growth’.

The company hopes Maltby will play a significant role in this, having increased recoverable reserves there ‘substantially’ and thus lengthened the mine’s potential life from 2017 by up to eight years. Banham is similarly upbeat about prospects in transport, energy and commodities and industrial services, while conceding that ‘no business is immune from cyclical factors’.

Highlighted by Growth Company Investor at 390p two years ago and again at 563p last February, Hargreaves shares (which hit 644p in July 2007) now trade at 603.5p, valuing the company at £159 million. Further progress is on the cards, provided sector strength continues.

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Hargreaves Services	AIM	£118.23m	450.00p	-0.50p
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Other company articles:
Exploration Insights by Robert Tyerman			06/10/2008
Coal boost for Hargreaves			15/09/2008
Directors’ Dealings			31/03/2008
Hargreaves expansion to renew profits stream			03/03/2008
Strong first half at Hargreaves			14/02/2008