Record profits for Hargreaves amid mine woe

FUEL logistics group Hargreaves Services yesterday posted record profits, as it said it would consider mothballing its troubled Maltby mine in Yorkshire.

Revenue over the year to 31 May rose 24.6 per cent to £688.3m, while pre-tax profit jumped 16.8 per cent to £43.1m.

Hargreaves earlier this year issued a profit warning triggered by geological problems at Maltby, which produces more than 1m tonnes of coal each year, and revised down the group’s annual profit by up to £16m.

The company said yesterday leaking gas, oil and water from a coal panel meant the mine might have to be closed entirely. Hargreaves will decide on its fate when it receives the results from an investigation next month.

Shares slumped on the news, closing down 20.6 per cent at 551p.

Chairman Tim Ross said yesterday that the developments at Maltby were “unexpected” and it was “closely assessing the implications of those developments”.

“Maltby has not been driving our recent profitable growth and it has undoubtedly been adding risk and volatility to the group’s earnings profile and rating,” Hargreaves added.

Reflecting its good financial performance, the dividend was up almost 15 per cent on the previous year to 17.8p.