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Hargreaves Services - Eps forecast of 105.6p for next year

March 2010

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

  • Epic Code:
  • HSP
  • Price:
  • 715p
Hargreaves has reported its H1 results. Although sales fell by 29% to £211.6m due to a fall in coal prices, this has relatively little bearing on profits as Hargreaves’ tends to take fixed-margin contracts across its businesses, which insulates it from any move in commodity prices. Pretax profit was therefore up 19% to £16.5m and earnings by 18% to 41p. Similarly, operating margins increased to 8.7% from 5.5% due to the impact of falling commodity prices.Of Hargreaves’ four divisions, three showed improved results. The two key swing factors, however, in recent periods are the minerals trading business and also the production business.Minerals trading comprises the import of coal for power stations an ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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