Newspaper article The Journal (Newcastle, England)

'Coal Is No Longer King' as Hargreaves Diversify

Newspaper article The Journal (Newcastle, England)

'Coal Is No Longer King' as Hargreaves Diversify

Article excerpt

Byline: COAL MINING jonathon manning jonathon.manning@trinitymirror.com

DURHAM coal giants Hargreaves Services accepted a slight dip in its turnover as the firm showed tentative signs that diversification plans are starting to work.

Hargreaves's turnover in interim results for the six months ended November 30 2016 fell by 2.2% from PS174.8m to PS170.9m, while its continuing operating profit fell by 98% from to PS4.9m to PS100,000.

The figures show the financial impact of the closure of a number of the country's steelworks, including the SSI plant in Redcar, which led to the business selling less coal and coke.

But Hargreaves' work to diversify its business paid off after it received an extra PS40m in new income generated from its acquisition of civil engineering firm CA Blackwell Group. The company said the PS40m helped to offset revenue lost due to the closure of steelworks.

The firm, led by CEO Gordon Banham, is continuing to diversify its business into areas such as biomass energy and property development.

Speaking to The Journal, CEO Gordon Banham said: "Coal was king in the North East, but now it's not.

"One of the important regulatory issues for me, when I eventually retire, is that this business is still based in the North East but it won't be in coal. It will move into complementary sectors such as civil engineering, but it will be in the North East."

Hargreaves made a major commitment to its diversification strategy when it acquired Colchester-based Blackwells in January for PS11.85m. The costs deal was made up of a net cash payment of PS8.5m and the transfer of a property valued at PS3.35m to Blackwell's shareholders.

Blackwell is now part of Hargreaves' specialist earthworks division.

Mr Banham said that the firm would be looking to strengthen this side of the business and had no intentions of acquiring further companies over the next 12 months. …

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