Companies: HSP   

Hargreaves Services is looking at ‘organic’ and ‘acquisition’ opportunities after lifting interim pre-tax profits 62 per cent to £6.6 million.

The Durham-based company, which provides transport and support services to the energy, mineral and waste sectors, increased turnover almost 70 per cent to £173.3 million in the six months to November. AIM-quoted Hargreaves says its minerals division put in a ‘particularly strong performance’.

Maltby Colliery, which the company bought from UK Coal a year ago for £21.5 million, contributed £2.4 million to group operating profit of £9.2 million on revenues of £13.3 million. Hargreaves partly funded the deal with an £11.1 million placing at 469p and says the Maltby result was ‘slightly below’ its expectations because of problems with old equipment, which has now been replaced.

Chairman Tim Ross says Imperial Tankers, a chemical transporting buy-out from ICI which Hargreaves bought for up to £7 million in September, is integrating well. Acquisitions helped produce a £2.1 million net financing charge for the first half, while net debt rose by £18.5 million to £56.9 million over the period. Gearing almost doubled to 136 per cent.

First-half earnings rose 33 per cent to 17.64p a share and the company is proposing a ten per cent interim dividend increase to 3.3p a share. Hargreaves, which ended November with £7.8 million cash, says it is continuing to review ‘further investment opportunities and declares a ‘strong forward order book’ provides ‘good revenue and profit visibility’.

Highlighted by Growth Company Investor at 390p in 2006, Hargreaves shares hit 644p last July and now trade at 563p, up 41p this morning, valuing the company at £148 million. They should make further progress, stock market conditions permitting.

Growth Company Investor subscribers have full access to all our AIM and small-cap share recommendations. To subscribe today with a half-price offer, and gain immediate access to all the recommendations, click here.

Hargreaves Services	AIM	£123.49m	470.00p	-30.00p
Click here for interactive charting
Other company articles:
Exploration Insights by Robert Tyerman			06/10/2008
Coal boost for Hargreaves			15/09/2008
Directors’ Dealings			31/03/2008
Hargreaves expansion to renew profits stream			03/03/2008
Strong first half at Hargreaves			14/02/2008