INDUSTRIAL services group Hargreaves says it is making progress in tackling a geological issue which has halted production at Maltby Colliery since May.
The South Yorkshire mine’s problems are likely to result in a £12m-£16m hit to the group’s profits but not until next year’s results.
Esh Winning-based Hargreaves said it expects production to be halted for up to four months but that work to get around the geological problems, which caused mining to be stopped on health and safety grounds, was on track.
Elsewhere in the group, Hargreaves reported robust trading in an update to the stock market for the year to the end of May. It plans to publish its preliminary results on September 25.
The business, which operates across four divisions – production, industrial services, energy and commodities, and transport – reduced its net debt to £78m.
The market for coke, produced by Hargreaves’ Monckton Cokeworks, remained resilient and the Tower Colliery project in Wales began production earlier than expected, supplying a nearby power station.
Industrial services had an exceptionally good year, the group said, winning three new contracts in the steel sector worth £15m annually, and including work at the recommissioned Redcar steelworks.
Profits in the energy and commodities division will be better than expected thanks to higher than forecast demand from power station customers, and transport division had a solid year and performed in line with the group’s expectations.
Brokers Brewin Dolphin in Newcastle now expect the group’s full-year pre-tax profits to come in at around £47.6m.
“Net debt was around £78m at May 31 compared to our forecast of £93m, reflecting beneficial timing of coal shipments at the year end as well as good cash management,” said Brewin Dolphin.
“It will take some time to restore confidence in the forecasts following the Maltby setback; this is the first step in that process.”