Hargreaves Services PLC Post-Close Trading Update and Results Notification (5790S)
December 22 2016 - 2:00AM
UK Regulatory
TIDMHSP
RNS Number : 5790S
Hargreaves Services PLC
22 December 2016
For immediate release 22 December 2016
Hargreaves Services plc
("Hargreaves", "the Group" or "the Company")
Post-Close Trading Update and Notification of Interim
Results
Hargreaves Services plc (AIM: HSP), a diversified group
delivering key projects and services to the infrastructure, energy
and property sectors, today provides the following update on
trading ahead of its interim results for the six months ended 30
November 2016.
The Group has experienced more stable trading conditions during
the period with underlying Group profits for the six months
expected to be in line with management expectations. Hargreaves
anticipates a strong second half with expected outperformance in
Coal Distribution and Property & Energy that will more than
offset the impact of the expected contract delays in Industrial
Services.
Results for the Coal Distribution Division include the Group's
share of profit from our associate operation in Germany which is
trading very strongly as its markets recover. The recent increase
in coal price during the first half, together with more robust coal
demand, is expected to also result in the UK operation exceeding
forecasts. Profits for the Division are currently expected to
exceed management expectations by GBP3m for the full year.
The Industrial Services Division set aggressive targets for new
business gains over the year as a whole. Whilst good progress
continues to be made, it now seems unlikely that these will be
fully achieved due to a delay in the commencement of a major
project in Hong Kong. The Division's UK business has traded
strongly and is expected to continue to do so through the second
half.
Good progress continues to be made in the evaluation and
development of the Group's Property and Energy project portfolio.
Profits realised from the Property Division are expected to
slightly exceed management targets over the year as a whole,
although the timing of property sales remains difficult to
predict.
The integration of the Blackwell acquisition is progressing well
and underlying trading performance has been strong and in line with
expectations. The Group has re-appraised the costs to complete and
remediate two legacy contracts that were identified at the time of
acquisition and as a consequence goodwill will be increased by
GBP2.6m to GBP3.4m to reflect these additional costs, a level that
management consider sustainable given the underlying profitability
and cash generation of the operation. The escrow account
established at the time of acquisition continues to provide
protection in relation to legacy contracts and no further
provisions or adjustments in respect of pre-acquisition contracts
are expected. Good progress continues to be made in the realisation
of cash from sales of former Blackwell properties.
Management remain pleased with the rate of conversion of legacy
assets into cash. As reported in October the Group's existing coal
stocks have been sold and we continue to expect the full recovery
of loans to the Tower joint venture. Working capital performance
across the Group also remains in line with expectations. The Group
is currently targeting to close the financial year with less than
GBP5m of net debt.
The Group expects to report its interim results for the six
months ended 30 November on 15 February 2017. A briefing for
analysts will be held at 10.00am on the morning of the results 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
Joint Broker)
Sandy Fraser / Nick Owen 020 7496 3000
Investec (Joint Broker)
Sara Hale / Robert Baker 020 7597 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCTTBFTMBTTMPF
(END) Dow Jones Newswires
December 22, 2016 02:00 ET (07:00 GMT)
Hargreaves Services (LSE:HSP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hargreaves Services (LSE:HSP)
Historical Stock Chart
From Apr 2023 to Apr 2024