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Hargreaves Services hit by UK coal and steel pressures

The challenges in UK coal and steel hit the half year results of solid fuel provider Hargreaves Services, which reported a 82% drop in pre-tax profit and that it was cutting its dividend by 83%.
Hargreaves Services hit by UK coal and steel pressures
Chairman David Morgan said the group would be reducing exposure to thermal coal markets, used in power stations, in the next 18 months given further coal station closures and weak commodity markets..

The challenges in UK coal and steel hit the half year results of solid fuel provider Hargreaves Services (LON:HSP), which reported a 82% drop in pre-tax profit and that it was cutting its dividend by 83%.

Shares in the firm sank over 7% in early deals to stand at 220p.

Chairman David Morgan said the group would be reducing exposure to thermal coal markets, used in power stations, in the next 18 months given  further coal station closures and weak commodity markets.

"This follows the decisive actions taken in the past eighteen months to simplify the group and exit markets such as coke production and trading."

For the six months to end November, pre-tax profit was £3.2mln compared to £20.3mln in the same period in 2014, on revenues that were 50% lower at £174.8mln.

The interim dividend payment will be 1.7p compared to 10p last year.

However, Hargreaves said it was confident profitability could be maintained even in such severe market conditions and it has taken steps to reduce costs and a restructuring of the firm is ongoing.

This month, the firm bought  Blackwell - a  civil engineering group, for£11.85mln, which it says represented an important strategic step to develop value.

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