Profit at Hargreaves Services’ transport division plummeted by more than£1m in the six months to November 2015, as the company was hammered by adverse conditions in the coal, steel, construction and waste markets and unseasonably warm winter weather.
The fall in the transport division’s profits is worse than Hargreaves predicted in its profit warning last December, when it forecast a fall of £500,000 for the period.
Reporting its interim results to November 2015 this week, Hargreaves Services said its transport division’s revenues had fallen £9m year-on-year, from £37m to £28m. Operating profit plunged from £1.6m to £583,000.
The profit fall at the transport division was largely attributed to the closure of a major landfill site in the north east of England.
The company said: “Despite a strong start to the financial year, we have seen a marked reduction in activity across the transport division, but particularly within the waste sector.”
It added: “The reduction in general waste market flows followed the downturn in the business of a significant North East landfill operator. This reduction in general volumes has been exacerbated by a reduction in coal movements, the low seasonal movements of rock salt and a recent decline in construction sector activity.
"The division is working very hard to reposition itself in the marketplace; however, ongoing mild weather through December and January is resulting in a challenging operating environment.”
Iain Cockburn, finance director at Hargreaves, added that the sale of Imperial Tankers in the first half of the year had added "an element of benefit" to the division, which had not been replicated in the second half.
He insisted the division remains "very much a core part of the business," and praised its" highly skilled management team."
Cockburn said that he was hopeful the division would expand its portfolio in the future, although he warned that "there are no easy wins in the sector".
The company said its acquisition of bulk earthmoving and civil engineering firm Blackwell in January this year, “creates new and exciting opportunities to deploy one of the largest heavy plant fleets in Europe within a large and well-funded group”.