Business
Strategic Repositioning and Trading Update
Strategic Repositioning and Trading Update.
About this update from Hargreaves Services Plc
[{"type":"text","content":"\n \nRNS Number : 4647W Hargreaves Services PLC 27 April 2016 \n\n\n\n\n\nFor immediate release\n\n\n27 April 2016\n\n\n\n\n \n \nHargreaves Services plc\n(\"Hargreaves\", \"the Group\" or \"the Company\")\nStrategic Repositioning and Trading Update\nHargreaves Services plc (AIM: HSP), the UK's leading supplier of solid fuels and bulk material logistics, is pleased to provide the following update on its strategic repositioning programme and recent trading.\nOver the last two years Hargreaves has worked hard to position itself to face the growing challenges that have emerged in the coal and steel markets. This programme has included undertaking a far-reaching restructuring exercise aimed at simplifying the Group through disposals and business closures to reduce debt levels and to seek to mitigate the risks and volatility faced by the Group in its coal, coke and steel related activities.\nOver the last year, the challenges facing the coal sector in the UK have increased due to continuing coal price weakness and low levels of coal demand arising from weak gas prices and an accelerated programme of UK coal generation plant closures. Given these continuing pressures the Board has elected to further accelerate its withdrawal from the thermal coal sector. We note the announcement by RWE released earlier this week concerning its intention to potentially cease taking delivery of Welsh coal at Aberthaw power station after March 2017. Our Interim Results Statement indicated that we were reviewing options to curtail coal production at Tower earlier than planned and that such a decision might result in a modest impairment to the value of loans the Group has extended to the joint venture. Although the RWE announcement means that curtailment of coal production may potentially be necessary even earlier than we had anticipated, we will continue to review plans and mitigation opportunities to minimise any necessary impairment of loans and continue to believe that any impairment will be modest. Recent pressures in the steel markets, including the closure of Redcar steelworks and the uncertainty over the future of Port Talbot have exacerbated the trading pressures in the UK.\nAlthough the coal and steel sectors remain highly challenging, the Group has made significant progress in transitioning the business away from thermal co...