Hargreaves completes switch away from coal with rising profits

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County Durham services and property company Hargreaves says it has completed its transformation away from coal after posting what it described as “very strong” annual results.

The company – which this year shipped the last ‘coals from Newcastle’ when it sent a shipment from the Port of Tyne to Europe – has released results for the year ending May 31. They show a slight fall in revenue to £204.8m but a big increase in underlying profit to £21.2m.

A large proportion of that profit (£17.7m) came from joint ventures, with its German JV in particular contributing £13.6m.

Read more:the North East’s Top 200

The upbeat announcement marks a significant turnaround for Hargreaves, which two years ago posted sizeable losses and has shed thousands of jobs in recent years.

The company said it was free of bank debt and was now on a strong footing to move forward as a major employer in the North East.

Chief executive Gordon Banham said: “This is the end of our transformation period. There has been a lot of upheaval – we had nearly 8,000 people working for us at one stage and now we’re around 2,000. So there’s been a re-trenching and a transformation of the company.

“But the fact is that we are a North East plc with a strong balance sheet, working in sectors with a positive future.”

Mr Banham said the move away from coal had been driven by a combination of environmental and commercial concerns, with it becoming difficult to find banking and insurance services while operating in coal.

Hargreaves said it had used its North East mining heritage to move into areas like earthworks, where it has a £120m contract for the HS2 project. Though delays to HS2 were the main factor in its falling revenue, the company is bidding on earthworks contracts for the Lower Thames Crossing and the Sizewell nuclear power station.

The company’s property division – a mixture of legacy mine sites and new land plots – has seen major sales at its Blindwells housing development near Edinburgh and the mixed-use Unity development at Doncaster. More sales are expected in the coming months, the company said.

As a result of the successful year, Hargreaves it set to pay an additional dividend of 12p a share on top of its regular 4.5p payment.

In a separate announcement, Santander has unveiled a £14m funding package to Hargreaves Services.

The bank said the funding – which comprises invoice finance and foreign exchange funding – would support Hargreaves’ transition out of coal mining to focus on its services and property development operations.