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Durham coal miner's year of challenge and reward
COAL mining and transport business Hargreaves Services reflected on a "challenging and rewarding year" which included the closure of Maltby deep mine and a bold venture north of the border.
The Esh Winning, County Durham-headquartered company, which increased turnover by more than £220m, has accelerated the development of its surface mining business to become the key coal producer and distributor in the UK.
The firm was hit by fraud at its Belgian business and the closure of its Maltby colliery in South Yorkshire, but underlying pre-tax profits from continuing operations rose 5.9 per cent to £52.2m in the year to May 31.
But in the year to year to 31 May, the group reported revenues from continuing operations of £843.3m, an increase of £225.4m over the prior year.
The exceptional costs associated with Maltby and the Belgian fraud offset an underlying profitable performance from the rest of the group with strong performances in coal distribution and from Hargreaves' core material handling services business.
As well as an £8.4m Scottish Coal deal in July, Hargreaves bought Aardvark, the trading arm of collapsed miner ATH Resources, for £10.4m in May, which Hargreaves said will replace Maltby as a source of coal.
"The completion of the fundraising in April followed by the two acquisitions of Scottish surface mining assets further consolidated our position as the key coal producer and distributor in the UK market," said group chief executive Gordon Banham.
"The UK continues to be our core market and major profit generator. We are confident that our UK business model is robust and will continue to generate cash and profits even as coal burn reduces in the years to come.
"Our coal distribution business continues to be well positioned to add value and address the needs of niche markets effectively.
"We started the new financial year with coal production already underway in Scotland with the opportunity of commencing other mining and restoration projects.
"As we enjoy the benefit of a strongly cash generative UK business, we will step up our efforts to identify opportunities to grow the business on both a UK and international basis, searching for opportunities where risk can be adequately managed and our services and skills can be deployed to create value."
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