Hargreaves Services slashes costs, but warns of challenging market conditions

2nd Jul 2015 08:53

Hargreaves Services has outperformed its £3m cost reduction plan, but remained wary of challenging conditions in the coal sector.To save costs, the company merged its energy, commodities and production divisions into the newly titled coal production and distribution unit.The restructuring process, which chief executive Gordon Banham said was "broad and deep and involved a lot of sacrifice across the organisation," incurred one-off costs of £4.5m.However, following plummeting revenue in Hargreaves' first half results, publishing in February, deterioration in the coal market have led to widespread power station closures."There remains very limited revenue visibility from UK power generators," the company warned in a statement."In addition, the coal price, a key driver of the profit in our coal production and distribution division, has continued to fall and is currently £3 lower at approximately £38 per tonne," it added.As of 1000 BST, Hargreaves was trading 6.9% lower at 324p.