Hargreaves Services lifts dividend after profits halved

11th Aug 2015 08:42

(ShareCast News) - Mining logistics firm Hargreaves Services lifted its dividend as it expressed optimism about UK coal markets despite posting a 52.2% fall in full year profit before tax.The company ramped up its final dividend to 20p from 16.7p, which saw shares in the stock climb 3.98% to 333.25p at 0858 BST.The company said it lifted the dividend after a decision to move to a higher payout ratio and due to strong cash generation despite the difficult trading conditions.Revenue fell by 23.8% to £662.2m from £869.2m, which Hargreaves Services said was due to reduced coal trading volumes.Hargreaves Services pointed out restructuring had impacted the company's bottom line, as it took a £12.2m one off hit which brought its net profit down to £24.9m,The company said the past twelve months has seen a perfect storm of low coal prices and a collapse in UK coal import volumes which has adversely affected the whole sector."Whilst we still believe the UK coal markets will offer opportunity for the group over the coming years, especially if coal prices improve, the events and developments over the past few months demonstrate that the political will to accelerate the removal of coal from the UK energy mix through energy policy and taxation is even stronger now than it was twelve months ago."WH Ireland said the results were in line with expectations, and said it anticipated little changes in forecasts for the stock.