Hargreaves Services Share Discussion Threads

[aishah] 17/10/2013 23:43

2015 PEG=0.65, PER=5.98, EPS Growth=9.23%, yield=3.4%, Dividend cover=5.23x
A doubler from here imo. dyor

[meijiman] 17/10/2013 16:29

I found your post interesting ginna. Please post again!
SSI has owned Redcar for sometime so I assume the coke nuts were quite old?!. I believe SSI is installing new technology to reduce coal/coke useage as you would expect. HSP has plenty of flexibility on supply due to its excellent sourcing of various types of coal/coke.
Pleased to see some breakout here -the low rating remains and IMHO the earnings quality is higher than the market thinks. But after Maltby and the Belgian fiasco can see why some doubters remain.
There are some quality holders here so I'm hoping for plus £10 before the y/e.

[sar10] 17/10/2013 14:47

Well whatever its doing its going up so i'm happy!

[droid] 17/10/2013 14:07

Is this breaking out of a pennant ???

[simon gordon] 10/10/2013 10:22

Prelims:

Monckton

The closure of Maltby necessitated sourcing coking coal for Monckton from international markets and we were able to source coal that was very similar to that of Maltby. Our subsequent testing and production has shown that the coke produced from this coal has very similar properties to that produced historically from Maltby coal and we believe that there will continue to be sustained demand for this type of coke.

Production at Monckton remained steady whilst revenues decreased by GBP3.3m from GBP56.4m to GBP53.1m. Coke sales fell by GBP4.5m from GBP54.1m to GBP49.6m, whilst by-product income fell by GBP0.5m to GBP4.1m through a combination of lower volumes and lower power prices.

Annual coke volumes sold fell by 25k tonnes from 261k tonnes to 236k tonnes in the year, due to a combination of slowing coke demand coupled with the effect of de-stocking experienced in the year ended 31 May 2012. Included within annual volumes were 51k tonnes of third party manufactured coke, sold in addition to Monckton's own manufactured product.

[simon gordon] 10/10/2013 10:17

Surprised the share is holding up with such bad news, it's going from bad to worse for HSP.

[simon gordon] 10/10/2013 10:14

Gas prices blamed for plant closure

By Press Association , Oct 10, 2013

A chemicals factory which has supplied industries such as glass and soap-making for 140 years is to close because of "massive" energy bills, costing 220 jobs.

Tata Chemicals Europe said it was shutting its soda ash factory at Winnington in Northwich, Cheshire, which has produced the chemical since 1874, as it was being squeezed by rising gas prices.

Job losses will be split across Winnington, support services and Tata's nearby Lostock plant, which will continue making soda ash and sodium bicarbonate - used in baking, detergents and reducing power station emissions.

Tata will also reconfigure a nearby power plant which feeds both factories, under plans to cut soaring energy costs.
A separate sodium bicarbonate factory on the Winnington site will be retained and expanded.

Tata said a nearby British Salt site at Middlewich was unaffected.

It has started a 45-day consultation with staff and unions.

The business is owned by Indian conglomerate Tata, which also owns Jaguar Land Rover and the Corus steel business.

Tata Chemicals Europe managing director Martin Ashcroft said while the decision was "hugely regrettable", it was vital to "secure a sustainable future for our business".

He said: "In the face of high and rising gas prices, we have to reconfigure our business to focus on higher-value products and reduce our energy bill in order to continue manufacturing in Northwich."

The changes will leave Tata Chemicals Europe with about 360 staff.

A spokesman said the business would face a sharp rise in energy costs in 2015 when a deal with energy giant E.ON ended, and which could have made operations in the town no longer viable.

He said while rising gas prices and carbon emission taxes had heaped pressure on the business, it had so far been "sheltered" by the long-term agreement.

Tata last month took control of the combined heat and power plant, previously jointly-owned with E.ON, which will allow it to produce more electricity and less steam, to cut energy losses.

Tata Chemical Europe is the UK's only manufacturer of soda ash and sodium bicarbonate, and the market-leading maker of salt.

The business was previously known as Brunner, Mond and Co, and was founded by John Brunner and Ludwig Mond, who built Winnington Works.

In 1926, Brunner Mond merged with three other British chemical companies to form Imperial Chemical Industries (ICI).

It was sold by ICI in 1991 and bought by Tata in 2006.

Shares in coal mining and industrial group Hargreaves Services slipped almost 3% after it noted the impact on its Monckton coke works in South Yorkshire, which has a contract to supply about 75,000 tonnes of coke annually to the business until the end of 2015.

The announcement coincides with disappointing official figures which showed o utput from British factories fell unexpectedly in August, sending overall industrial production down 1.1% in its biggest monthly fall for nearly a year.

The Northwich sites neighbour Chancellor George Osborne's Tatton constituency.

[deanowls] 10/10/2013 10:10

Or a big hole not to be dug?

[simon gordon] 10/10/2013 10:06

"Monckton produces some 200,000 tonnes of coke per year; coke destined for use in glass, detergents and steel manufacturing; and coke used for home heating."

"...contract for the supply to TCE of approximately 75,000 tonnes of coke per annum through to December 2015."

That is a big hole to be filled.

[gfrae] 10/10/2013 09:43

It's saying that Monckton may have to close down,with all associated costs,unless it can secure new contracts after the Tata contract has been completed.

[deanowls] 10/10/2013 04:54

It's still a loss of business two years out.

[aishah] 09/10/2013 20:55

"Monckton's commercial position is secured through, among other things, a contract for the supply to TCE of approximately 75,000 tonnes of coke per annum through to December 2015." So what's the issue?

Artemis Investment Management LLP on behalf of discretionary funds under management - over 5%

[simon gordon] 09/10/2013 19:07

Think it's saying that they've got a two year contract with Tata, if annulled they will be compensated.

[castleford tiger] 09/10/2013 18:26

I M A BIG FAN.

However market did not like that RNS today.

read and re read.

What is it saying??

Tiger

[sar10] 06/10/2013 10:39

Thanks for the link orienteer.

Very down to earth commentary in my opinion and one that I almost fully agree with. It's good to hear the comments regarding the CEO and FD also.

GLA

[orienteer] 06/10/2013 10:25

More support from a respected commentator :)

[texaspete2] 29/9/2013 09:52

Thanks all, i'll get on the phone to hsbc then!

[lacey4t] 28/9/2013 23:04

I hold in both Selftrade and iWeb Isa's.

[sar10] 28/9/2013 19:23

P.s pounds worth, not shares! Not that rich!

[sar10] 28/9/2013 19:22

Texas. I got 2.5k in my isa on Tues with Barclays.

GL

[ginna117] 28/9/2013 15:07

I've not got no shares in this co yet, but I work side by side with them at redcar, I can see them only getting bigger, boy are there busy.
Be lucky
Ginna

[texaspete2] 28/9/2013 14:00

Anyone managed to buy this share in an ISA? HSBC doesn't seem to want to let me!

[sar10] 24/9/2013 09:59

Just added another 5500 pounds worth in 2 trades. Knee deep now but upside far outweighs the downside imho.

gla

[davebowler] 24/9/2013 09:24

Westhouse;
Buy


HSP.L / 818.5p / £270.5m / TP: 984p





Event: Results issued




Likely % change in earnings forecasts: +0% to +5%














Hargreaves Services (HSP) prelims are in line with our forecast at the underlying EBIT level; we expected £55.9m, actual = £55.7m, although we believe that this may be slightly below current consensus. The 15% hike in the dividend and the desire to drop divi cover to four times (from around six times) over the next three years are likely to be well received.

The UK business performed well in the year, but coke trading operations remain exposed to "significant steel sector volatility". The Maltby closure and Belgium wind-down are both progressing in line with expectations, and we would expect this to form a lower profile part of the management narrative in future.

Outlook: Management expect further growth in the current year, and the long term - as always - is mixed for coal. But the recent Scottish acquisitions are bedding down well with production proceeding according to plan, which is reassuring.

Valuation and forecasts: A P/E valuation of only 6.5x calendarised (Dec 2014) remains undemanding, underpinned by the strong growth in the dividend. At the moment we make no change to our earnings forecasts - we believe that we are at the lower end of consensus for FY2014. We keep our Buy recommendation.