Hargreaves Services PLC Post-Close Trading Update and Results Notification (0676D)
July 04 2016 - 1:00AM
UK Regulatory
TIDMHSP
RNS Number : 0676D
Hargreaves Services PLC
04 July 2016
For immediate release 4 July 2016
Hargreaves Services plc
("Hargreaves", "the Group" or "the Company")
Post-Close Trading Update and Notification of Preliminary
Results
Hargreaves Services plc (AIM: HSP), a leading supplier of solid
fuels, bulk material logistics and specialist earthworks services,
provides the following update on trading ahead of its preliminary
results for the year ended 31 May 2016.
Core Operations
The Group is pleased to report that trading in the run up to the
year end was in line with management expectations and consequently
the Group expects underlying profitability for the year ended 31
May 2016 to be in line with current market expectations.
The restructuring and repositioning of the Group's core
operations continues to progress and the resulting restructuring
and exceptional costs are expected to be broadly in line with
previous market guidance.
Tower Joint Venture
The Group notes that since reporting its interim results on 16
February 2016, RWE has confirmed its intention to cease buying
Welsh coal for its Aberthaw power station by 31 March 2016. This
decision firmed up our previously announced intention to consider a
shortened mining programme at our Tower joint venture. Within our
interim results we stated that a shortened mining plan could result
in a modest impairment of our outstanding loans to the joint
venture vehicle. It is our current view that, although the equity
investment values and goodwill require to be impaired as no future
dividends are likely to arise, a full recovery of the loans remains
achievable. The Group will continue to work with its joint venture
partners to seek an optimal outcome. The impairment charge in
respect of our equity investment and goodwill will be approximately
GBP4.9m.
Brexit
The Group continues to appraise the potential impacts of Brexit.
The Group is a net beneficiary of Sterling weakness due to its
current stocks of largely dollar-denominated coal and coke. No
revaluation gains have been booked to date, but if the current
exchange rate trends continue the Group should benefit as and when
these stocks are realised.
On a negative note the Group has been informed that a GBP7m
earthworks project at a major UK port has been postponed owing to
Brexit-related concerns. The current uncertainty associated with
Brexit presents potential risks for our Earthworks and Logistics
businesses which have a significant exposure to construction
activity and capital investment projects. However, it is difficult
at this stage to form a clear picture of the medium term impacts
and we currently consider the risk of a downturn in private sector
activity as against the potential upside from Government-sponsored
public sector works to reflate the economy to be relatively finely
balanced.
Notification of Preliminary Results
The Group expects to report its preliminary results for the year
ended 31 May 2016 on 9 August 2016. A briefing for analysts will be
held at 10.00am on the morning of the results announcement at the
offices of Buchanan, 107 Cheapside, London EC2V 6DN. For more
information on the briefing, please contact Buchanan on 020 7466
5000.
For further details:
Hargreaves Services
Gordon Banham, Chief Executive
Officer
Iain Cockburn, Finance
Director 0191 373 4485
Buchanan
Mark Court / Anna Michniewicz
/ Sophie Cowles 020 7466 5000
N+1 Singer (Nomad and
Broker)
Sandy Fraser / Nick Owen 020 7496 3000
This information is provided by RNS
The company news service from the London Stock Exchange
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