Business
Acquisition & Trading Update
Acquisition & Trading Update.
About this update from Hargreaves Services Plc
[{"type":"text","content":"\n RNS Number : 3532M Hargreaves Services PLC 28 January 2009 \n \n\n\n\n\nFor immediate release\n\n\n 28 January 2009\n\n\n\n\n\n\n\nHARGREAVES SERVICES PLC \n('Hargreaves' or the 'Group')Acquisition of Remaining 50% of Coal4Energy Ltd from UK Coal plc\nand \nTrading Update\n\nHargreaves Services plc (AIM: HSP), a leading supplier of products and support services to the energy, mineral and waste sectors, today announces that it has acquired from UK Coal PLC ('UK Coal'), the remaining 50% holding in Coal4Energy Ltd (Coal4Energy) for a total consideration of £9 million, making Coal4Energy a wholly-owned subsidiary of the Group. \n\nCoal4Energy, located at Kellingley Colliery in West Yorkshire, was formed in March 2006 as a 50:50 Joint Venture between Hargreaves and UK Coal, Britain's biggest producer of coal. Coal4Energy has grown rapidly to become the largest supplier of coal to the UK domestic and industrial markets. In May 2008 Coal4Energy acquired a majority shareholding of 85.2% in Maxibrite Limited, a leading manufacturer of smokeless fuel briquettes.\n\nBased on the last filed statutory accounts, in its first year of operation, the year to 31 May 2007, the profit before tax and management charges was £0.8m, the turnover was £64.8m and the net assets were £0.01m. In the year ended 31 May 2008, based on unaudited management accounts, Coal4Energy made a comparable profit of £1.9m on turnover of £63.4m. Further profit progression is expected in the year to May 2009, together with a full year contribution from Maxibrite Limited. \n\nUnder the terms of the acquisition, UK Coal has granted Coal4Energy the right to market all of its domestic and industrial coal production, currently in excess of 250,000 tonnes per year, under an exclusive 5 year contract. In addition, Coal4Energy will continue to market coal supplied by Hargreaves. Coal4Energy will relocate to Hargreaves' Yorkshire regional office in Glasshoughton, Castleford. The acquisition is funded by a new £9m, 3 year term loan facility supplied by Hargreaves' lead banker, Royal Bank of Scotland.\n\nThe Board confidently expects the acquisition of Coal4Energy to be earnings enhancing and cash generative.\n\nGroup revenue and profit in the first six months of the...