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Chris Morgan, Automotive & Logistics Datamonitor It has been a
Page 22
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busy month for Hargreaves Services, with an acquisition and the publication of its latest set of financial results,
The County Durham company, which provides transport and support services to the energy and waste sectors, has made its third purchase since joining the Alternative Investment Market (AIM) list of the London Stock Exchange last year by snapping up Norec for £5.5m.
The Barnsley-based firm supplies specialist labour to power stations and other utilities. It should fit well with Hargreaves Services industrial services division, boosting growth in turnover and profitability_ Previous acquisitions seem to have worked well for Hargreaves. For example, Monckton Coke Works, acquired last summer for £13.9m, has been fully integrated and production is up year-on-year. This helped boost finances in the year ended 31 May, with turnover up 77% to £155m and pre-tax profit up 13-4% to £5.5m.
The company spread this growth across all four of its business divisions — Industrial, Minerals, Transport and Coke & Chemical. This is not surprising given the high level of intra-company trade, any growth is likely to benef it all divisions.
Looking ahead, Norec is forecast to add £25m to the company's turnover. However, this will not be the limit of the firm's future expansion plans, as it is starting to look at moving into the Continent.
The group initialy intends to hire port space at Amsterdam, Rotterdam or Antwerp to import hydrocarbons from Russia and use subcontractors to suoplythe material to mainland Europe. It will continue searching for further purchases, in particular to expand its bulk liquid transport services in the North-East and South-East_ Hargreaves BLT (the bulk liquid divisbn which has contracts with many petrochemical firms) snapped up tanker group Gilloraith earlier this year, extending its hold over the North-West. More imaginatively, but still showing a keen sense of the overall pattern, Hargreaves recently bought a small Sheff ield tyre crumbing factory which had gone into administration.
Not only is tyre crumbing a green and growing industry but tyre crumb can be used as a coke additive at Monckton, reducing material costs and reducing emissions. The heat generated at Monckton heats the plant and the electricity byproduct is sold back to the national grid.
All in all it is hard to disagree with the company statement that they are all "commonsense acquisitions" . Hargreaves' latest results and its continued expansion agenda suggests a glowing future.