Hargreaves Services hit by production problems at Maltby

Hargreaves Services, the solid fuels and haulage firm, has been hit by disappointing coal production at its Maltby coal mine in South Yorkshire.

Underlying operating profit for the six months to the end of November 2011 was £18.9m, a drop of 9.8% against the same period of 2010.

Profits before tax fell 16.1% to £13.6m.

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Hargreaves has, however, boosted the interim dividend from 5.1p to 6p, a rise of 17.6%.

Total revenues for the period were £322.8m, a rise of 27.1% over the same period of 2010.

Hargreaves has been installing a new "face" at the Maltby colliery called the T5 panel. The yield at the site during the face change is described as poor and will see production fall by around 100,000 tonnes over the full year.

The firm says results were also skewed because income from the Energy and Commodities division, which sells coal, coke and minerals, is weighted to the second half of the year.

The final factor hitting profits was that higher prices achieved by the Production division only started to apply at the beginning of 2012, after the reporting period ended.

Hargreaves' Chairman, Tim Ross, said he still believes that full year results will be in line with management expectations.

The market appears to believe this is still an open question, with the stock falling 1.5% by 9.15am.

Over the last year, however, Hargreaves Services' shares have gained 33.5%.

BS