Cessation of Mining Operations & Full Year Update

Hargreaves Services plc

("Hargreaves" or the "Group")

Cessation of Mining Operations, Period End Trading Update and Notification of Preliminary Results

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, provides the following update on trading ahead of reporting its preliminary results for the year ended 31 May 2020.

Consistent with its long-term strategic plan, the Board has decided to cease all coal mining operations by July 2020. The effect of this decision will be to incur an exceptional cost of £3.7m in the year ended 31 May 2020, comprising employment related liabilities of £1m and accelerated restoration accrual, plant and mining asset depreciation of £2.7m.

As reported on 4 May 2020, the Group has not experienced any material impact from Covid-19 other than in its Property business where work on the Blindwells residential site near Edinburgh has been suspended. It remains unclear as to when our contractors will be able to restart on site. Additionally, some small value sales of non-core property assets in Scotland which were expected to complete in May have also been delayed as a result of Covid-19. 

For the year ended 31 May 2020, other than the impact caused by the Covid-19 delays in the Property business, the Board expects to report underlying results* in line with the market expectations which were in place prior to their withdrawal on 26 March 2020.

Net debt at 31 May 2020 was £27.3m, including £13.7m of leasing debt, compared with £40.3m at 30 November 2019 and £23.1m as at 31 May 2019. All these figures include the impact of IFRS 16. Discussions on the renewal of the Group's £50m borrowing facility which is due to expire on 31 August 2020 are continuing. The Board is confident that appropriate facilities will be secured.

Notification of Preliminary Results

The Group expects to report preliminary results for the year ended 31 May 2020 on Wednesday 29 July 2020. Details of the analyst meeting to accompany the results will be provided in due course.

*Underlying results are stated prior to exceptional items and amortisation and impairment of intangible assets and include the Group's share of the profit of its German associate.

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