Shares plunge at Hargreaves after coal blow
HARGREAVES Services yesterday saw its stock plummet after it issued a profit warning triggered by problems at its coal mine in Yorkshire.
It said that between £12m and £16m could be wiped off its profit in the year to May 2013, sending investors running for cover.
The lowering for forecasts – from analysts’ estimates of around £48m – was caused by geological problems at its Maltby coal mine.
Shares in the company, which specialises in coal supply and delivery, nosedived by almost 30 per cent after the company’s shock statement to the market.
Hargreaves believes the incident at Maltby, which involved pulling back operations because of safety concerns after water, oil and gas seeped into a new section of the mine, to be a one-off.
Production division director Gerry Huitson said: “This is a very unusual situation and to our knowledge this has never happened before in Maltby’s long 100-year history.
“It is highly unlikely that these conditions will be found again in any subsequent panels.”
Maltby employs 500 people and its coal is primarily used to supply the Drax Power Station, Europe’s largest coal-fired power plant in North Yorkshire, which is owned by British power producer Drax.
The company also imports coal and other minerals.
Chief executive Gordon Banham said in a statement yesterday: “Whilst we are bitterly disappointed by this development but there was nothing that could have been done by the mining team to foresee or avoid this situation.”