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Hargreaves Service First-Half Profit Up 9.6% on Higher Revenue

Feb. 22 (Bloomberg) -- Hargreaves Services Plc, a U.K. supplier of raw materials and transport for energy companies, said first-half pretax profit rose 9.6 percent as revenue soared on higher commodity prices.

The pretax figure was 16.1 million pounds ($26 million) in the six months to Nov. 30, on revenue that was 20 percent up on the year-earlier period, at 253.9 million pounds, the Durham, England-based company said today in a statement distributed by the Regulatory News Service.

Peter Ashworth, an analyst with Charles Stanley & Co., described the results as “very strong” and said the price-earnings multiple of 8.8 “doesn’t reflect the growth in the business.”

Revenue in the energy and commodities division rose 32 percent to 149.5 million pounds, the statement said. Production sales climbed 20.3 percent to 50.4 million pounds, mainly on increased coke prices and higher sales of pond fine, a quarry by-product used as a filler aggregate, while transport revenue rose 11.6 percent to 38.5 million pounds.

“We remain pleased with the current trading conditions,” Chairman Tim Ross said in the statement. “We believe this will be another exciting year for Hargreaves.”

The company’s view that the development of the European business offers “strong organic growth opportunities” underpins confidence that full-year results will meet forecasts, Ashworth said.

Earnings per share increased from 34.8 pence to 37.9 pence, the company said. The first-half dividend is being raised by 15.9 percent, from 4.4 pence to 5.1 pence, and will be paid on March 25.

Hargreaves rose as much as 12 pence, or 1.3 percent, to 930 pence in London trading. It traded at 912 pence at 9:50 a.m. local time, giving the company a market value of 245 million pounds.

To contact the reporter on this story: Blanche Gatt in London at bgatt@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net

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