Hargreaves Services has announced it has bought a German recycling business just days after selling off a tungsten mine in Devon.
The North East business has used its German subsidiary firm, Hargreaves Raw Material Services (HRMS), to acquire a 94.9% of DK Recycling und Roheisen GmbH.
The recycling firm specialises in producing high quality pig iron and other products from residual waste. Its products are mainly used by the foundry industry in an environmentally sustainable production cycle.
The company has struggled in recent years, meaning Hargreaves was able to buy the firm for €1.
Commenting on the acquisition, Hargreaves said: “Under its previous owner and management, DK has been undergoing an extended period of restructuring with a view to returning it to a sustainable and acceptable level of profitability, but this has not yet been successful.
“The management of HRMS will focus initially on improving DK’s sales and procurement processes, both of which align well with the expertise of HRMS. These immediate actions together with some operational changes and cost reduction measures will be implemented to improve DK’s financial performance.”
While Hargreaves has been adding to its business overseas, the company has also managed to sell off a tungsten mine at Hemerdon, in Devon.
The mine had previously been owned by Wolf Minerals (UK) Limited, but when the firm entered liquidation on October 2018 Hargreaves stepped in to take over the site. The deal was struck through one of Hargreaves’ subsidiary businesses Drakelands Restoration Limited (DRL).
DRL has now managed to sell off the mine to Tungsten West Limited for £2.8m.
At the same time Hargreaves has entered in a 10-year mining services contract with Tungsten West to carry out works similar to those previously fulfilled for Wolf.
Gordon Banham, group chief executive of Hargreaves Services, said: “We have worked closely over the last year with the many stakeholders of the former tungsten mine at Hemerdon. We are pleased to have achieved a solution that creates the opportunity for future tungsten production at the mine with associated local employment and provides our shareholders with substantial medium term earnings potential.”
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Meanwhile Hargreaves also issued a trading update to its investors explaining that it expected its half-year results to be in line with expectations.
Underlying operating profit for the six month period is expected to come in slightly ahead of those published a year earlier. However, turnover is set to be down on 2018 due to a number of civils contracts coming to an end.
Net debt at the half-year end increased to £34.7m, up from £28.6m in November 2018. The figure does not include proceeds of the sale of Drakelands Restoration Limited, which are estimated to be worth a net total of £2.4m.
Hargreaves said it expects to publish its interim results for the six months ending November 30 on January 29, 2020.
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