Despite winter weather delays, miners at its open-cast Scottish coal mines dug in deep to help owner Hargreaves Services plc to deliver an overall 5.6% increase in profits in the year ending 31 May 2014.
Tim Ross, Chairman of the Durham-based miner, said: “This year was challenging for Hargreaves. In difficult market conditions it is testament to the strength of the Group that we are able to announce a 6% increase in profits.
“Underlying profit before tax from continuing operations increased by 6% to £55.1 million, bringing a positive end to the year for surface mining with excellent production run rates after earlier delays and exceptional weather conditions.”
The Scottish coal operation delivered first year coal revenues of £50.5m during the year and generated an operating profit of £5.8 million. This result reflected the sale of 845,000 tonnes, marketed and sold at just over £5 operating profit per tonne, as expected, and also benefitted from some restoration activity during the year and the sale of surplus mining assets.
Ross added: “We are also pleased to be contributing to significant environmental restoration efforts at a number of key sites. Whilst this does not by any means deal with the significant restoration liability left behind by ATH and SRG, we are actively providing restoration at a number of sites.
“We have already delivered significant improvement at sites such as Glenmuckloch in Dumfries and Galloway and Muir Dean in Fife. At these sites we have utilised world class heavy plant and equipment and expertise to deliver on our contractual commitments. Restoration services have been provided on time and to the highest standards. Our specialised heavy duty equipment is providing the maximum possible impact for the money available.
“Even at sites where there is minimal or no restoration funding available, such as Duncanziemere, Netherton and House of Water, we are working to extract remaining reserves of coal whilst providing the greatest possible improvement to site conditions and environmental impact.”
Hargreaves said that indigenous coal will continue to be ‘an important fuel for UK power generation’ and that, therefore the surface mining pipeline is a core strategic asset and store of long term value for the Group. The strength of Hargreaves’ position in surface mining leaves it uniquely placed to capitalise on any future upturn in coal prices and coal fired power generation.
Whilst Scotland contributed significantly to the Division’s result during the year, underlying operating profit for the division remained at £16.7m reflecting reduced profits at Monckton.
The table below shows the current mining reserves for the Hargreaves Group.
|(All figures are in millions of Tonnes)||With Planning Permission||In Planning Process||Pre-Planning||Total|