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LONDON (Alliance News) - Solid fuels supplier and bulk material logistics group Hargreaves Services PLC on Wednesday outlined plans for its new structure and said trading across the group remains mixed.
Hargreaves said it will structure itself to focus on its core long-term operations, develop and realise the value of its property and energy projects and realise its legacy assets into cash.
The long-term operations will cover a simplified and UK-focused coal distribution business, a specialist earthworks and infrastructure services arm, an industrial services business, and a transport and logistics services division.
Elsewhere, the group said it sees an opportunity to realise significant medium-term value and cash from the development of projects in its property portfolio, which comprises 18,500 acres in England, Scotland and Wales.
In addition, the group is working on a number of energy-related projects, including high-wind-speed onshore wind energy projects, energy-from-waste projects, and a number of other deals around its electricity grid connections.
Hargreaves plans to generate GBP35.0 million to GBP50.0 million in incremental value from its property and energy projects over the next five years, it said.
Elsewhere, Hargreaves will seek to realise cash from its non-core assets, including coke and coal stocks, surplus plant and equipment, and loans to its Tower joint venture, all as part of its exit from thermal coal and coke production.
At present, the net realisable value of the assets is GBP66.0 million, the group said, and it expects to realise cash from the projects in an orderly fashion as quickly as possible. Hargreaves's current market capitalisation is GBP53.7 million. The stock was up 7.5% to 168.01 pence Wednesday.
Hargreaves said trading in its transport and logistics operations has remained challenging but is showing signs of recovery. Industrial services trading is in line, while underlying trading in coal production and distribution has continued to take a hit from soft coal demand in the UK.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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