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Right again moneybags. IMO the Scottish coal thing had to be done to be seen to be doing something they looked at UkCoal and walked away Belgium was an embarrassment nothing big was really happening and the other thing to factor in is what will happen in Scotland if the independence vote goes through, I would hate to think I was an English plc be holding to Alex salmon and his cronies. I'm with you moneybags there are too many headwinds for coal economically geopolitically and the last candle maker survived when electricity was invented because he made the best candles. I don't think Hsp are the best opencast coal operator in the world not to mention Britain, how many sites have they mined successfully and restored fully answer is none and if they have got their expertise and personnel from the likes of uK coal we'll say no more
One thing I'm still concerned about is the ongoing viability of these UK mines. You're right that the bulk of this company's fortune probably depend on the imported coal situation - most of the country's supply depends on that, with only around 5M being produced within the UK, and poor quality at that, which generally can't be burnt on its own, has to be blended with superior stuff from elsewhere. Increasing emissions controls (which are not going to vanish, however much one might wish it) may seriously impact on the usability of those supplies. I'm just concerned they have bought heavily into a great white -well, OK, black!- elephant! There is always an argument for ensuring security of supply. But well, when coal companies go bankrupt all of a sudden, it's hardly secure...and if a longtime expert operator in the field, UK Coal or Scottish coal can't make the numbers work, don't see how this lot will achieve it. Have they got lucky pants, do you think?
Fair point bev 88 let's hope that you are right and history doesn't repeat itself,as for the mbo team if you look historically they were all bit part players with the exception of the fd and the founder who alongside banham held big share holdings, i wonder how much of the acquisition drive that happened between the mbo and the fd and the founder leaving was driven by them and how much was down to banham , one will probably never know but I feel that there hasn't been a lot of positive in this co to shout about in recent years
Goldcoaster's comments are disappointing in that he suggests that the m.b.o. players have left the scene. On the contrary,Gordon Banham's team is still very much in place and enthusiastic with large share holdings.Furthermore the cheap coal imports from USA and elsewhere play into Hargreaves' strengths ,since,as a major importer , they can supply a reliable power source at less than half the cost of wind and well below gas. Just because UK Coal lost control of their borrowings and couldn't capitalise on their massive land bank one mustn't assume that history will be repeated.
Mrs moneybags bang on. Drax is the biggest user of coal in the uk and they have just done a deal where they are going to be importing enormous volumes of biomass into immingham thus displacing coal, firstly hargreaves don't appear to do much with drax on the coal front they receive trains from port of Tyne where another small company does all the port work in hargreaves back yard and secondly drax and abp at immingham do everything themselves with no need for hargreaves services, the writing is on the wall unless they grow some balls and make a big deal happen IMO.
One there point. I'm sure the company directors are quite capable of sounding very confident and reassuring. So were the boards of the other two before they crashed. These people will only tell you the good-sounding bits, trust me.
Would have to pick apart the argument about the rest of the world voting with its wallet. The coal situation is pretty dire worldwide, which is what took indigenous coal companies here out of business in the first place. Trends predicted a year or two back are not happening - in fact it's a total reversal. China was supposed to be the big market for coal. Not happening. Due to pollution concerns, they're shutting down mines, stopping others being built, and putting major constraints on imports. As a result of that, Australian firms have been collapsing (also due to world price tumbling). About 8000 mining jobs lost in the last few years. US? well fracking and environmental regulation have seen literally hundreds of coal power stations and mines close down. What's left among the rest? India is about the only market that shows a real prospect for growth, but chiefly because their state-owned coal company is so corrupt and inept it can't exploit its own resources properly. The world is actually oversupplied with coal. Cheaper to import into UK (as well as better quality) than to dig up locally. No, the world outlook is far less rosy than many are claiming. Too many pressures in the other direction. Heard recently the Chinese made some sort of breakthrough with the fracking. No, I maintain the outlook is negative and will be increasingly so.
This isanother UK COAL. Back in 1994 Richard budge bought what was left of English coal and people said he paid way over the odds. In 1997 rub mining made 275m profit and he was king of the world. Several years later he got sacked because he had not exploited his window of opportunity to take the company to the next level by reversing into something much bigger or making a huge acquisition because the board all had snouts in trough and wanted to take the safe path take little risk and protect the share price. Where are they today ? Board all ousted Richard budge bankrupt and the company share price has collapsed and they sit on a massive land bank in England. So hargreaves have a land bank in Scotland . IMO hap are following the same path as UKC . All the people who built Hsp from nothing all probably gone retired or pushed out and plc people in charge who take little risk and consequently little reward. They claim to have the biggest bulk fleet in the country but that is nonsense now as it's almost all subcontractors I believe who will like rats jump ship if the economy improves and better work elsewhere , the tanker business has stood still if not gone backwards, monckton has no long term future or contract positions, the garbage about Hong Kong is just a good story to appease the city, it's probably half a dozen men running around a power station preaching health and safety *******s.if they can't succeed in Germany or Belgium then why succeed in Asia? Redcar will close soon if steel prices keep falling, the rain will keep falling in wales and Scotland as it always has so the only real positive I see is the redevelopment of maltby colliery site and it will need a bowmer Kirkland type to do that as Hsp certainly don't have the people IMO to be property developers as is the same case in UKC and hence look where they are . Hsp are ten years behind UKC on the curve.
I welcome Goldcoaster's comments - mettle will indeed be tested re. Delivery on opencast. My conversations at Agm with director responsible gave me confidence that expertise and capability is in place eg. Satellite surveillance to monitor operation of hydraulic diggers. One factor not understood is massive land bank at Maltby and elsewhere post opencast- conversations with builders have taken place. Mrs Moneybags has a point re.coal out of fashion, but can't deny that it is by far the cheapest source of power and the rest of the world is voting in the main with it's wallet. Our Government will find it difficult to ignore the pull of reality.
One other thing worth remembering here: the Scots are committed to achieving 100% renewable energy supply by 2020' and believe it, they're smashing those targets. Sure, the government up there need coal supply in the interim, and Hargreaves have conveniently stepped in to supply it. Lots going on in offshore wind up there if you care to Google for it - enough to supply the Scottish mainland for sure. What happens when that all kicks in - do Hargreaves get kicked out? And there are going to be hefty restoration costs - the taxpayers are on the warpath about it from all I gather. That has got to cut heavily into profits. No, I'm entirely sceptical about any future coal "industry". I think those days just went up the chimney...
Couldn't help but say the dialogue between moneybags and bev 88 is compelling,both make sense but take a step back and look at it without believing the 6 monthly update bull****. Look at what they did in 3 years from the 2004 mbo. Maltby monckton immingham Germany norec and the list goes on. What have they done since 2008? Milk the demise of UK Coal to support coals sales blending away fines from maltby that had been there for years. Expansion into Europe Belgium a farce and they are distancing themselves from the German op. Renewables too complex so they out of that now ,at redcar in bed with Thailand steel who will cut and run if steel prices keep falling having just got rid of chief exec who they brought on board to pioneer it's relaunch. Hargreaves will not at some point get paid most likely. So what are they pinning hopes on for growth, open casting in Scotland and Wales. So the scots couldn't make it work in Scotland and the welsh in wales but the Geordies can. They will blame the weather logistics whatever but it hasn't worked in the past for a good reason when coal prices were much higher. This company is living off the fat of years gone by and milking it for all they can at the highest level.
What has attracted me to this outfit is the way they have coped with an outrageous run of ILL fortune The Management's mettle has been severely tested by 1/massive fraud resulting in closure of hitherto promising plant in Belgium. 2/Unprecidented geological issues causing Maltby closure with associated need to resource coal for Monckton coke.3/Landslip issues at Hatfield 4/Slump in world coal prices 5/Unprecidented rainfall affecting opencast work at Tower and elsewhere. 6/Challenges in supply of coke to contracting UK steel plants In the face of this ,Management has maintained profitability ,and momentum,in continuing business ,while increasing divs.and crucially,keeping pundits onside. Sure,they have seized on any GOOD fortune,such as sudden availability of distressed opencast assets , with alacrity. They regard headwinds as a source of invigoration rather than cause for capitulation. I send this from S.A. where I find that yet another massive coal powered plant is soon to be commisioned at Medupi,along with those in India,Germany and China. Hargreaves plans to have an increasing presence in the last two of these countries as the Uk coal usage eventually scales down.
Mmm, no I'd still argue they benefitted from a unique piece of fortune. We shall see how it pans out in the next year or two, as real market forces begin to kick in. In what is essentially a shrinking market. Their intent to be "last man standing" - will that be possible under anti-monopoly legislation?
Most serious money is made when people have the guts to buck the popular trend. This can create a niche position when the weak players leave the scene. When this is allied to superb management and the ability to adapt quickly you have an investable proposition. Those of us who have followed Hargreaves closely know they fit these criteria. This is no one trick pony and those who back against them beware!
The crisis with coal is not just down to govt policy and the inevitably lessening demand for coal in this country. It was brought on by decreasing world prices - a trend that is also continuing. Those of us who were stung by it heard the same sort of waffle that this Hargreaves lot are currently peddling. Look where they ended up, taking shareholders' money with them. I certainly wouldn't put my money in it. Hargreaves have successfully exploited the failure of SC and ATH, plus the willingness of shareholders to hand them £42M gratis. They are enjoying a lush period, before the market realities you refer to kick in and they are subject to those lessening margins that the others succumbed to. Have to say I'm done with coal and for the good of my finances won't be putting any money in that direction any time soon. Hargreaves are positioning themselves as the "last man standing". Would have thought that's a perilous place to be. For them and the investors...
Mrs Moneybags hits the nail on the head-nobody has any idea as to how we a suddenly replace the 40% of power currently generated from coal, especially when the politicians have put the hand of death on new generation by attacking suppliers. We all know that in time the dominance of coal will reduce but given that the supply margin is paper thin, and with demand rising in the recovery phase, the chances are the likes of Hargreaves will be in big demand for some years to come. These realities will not be lost on the market forever.
Whoops! Not true - use has declined, as per published govt figures, with an unusual peak last year attributable to bad weather conditions and response to higher heating demand. Various coal plants are expected to shutter within a few years, no indications yet as to what will replace them. Hargreaves in their report confirm themselves that the market is declining. How quickly that takes effect is the question.
80bn to clean up sell afield and they still want to build nu clear! Wind farms that don't work half the time, imports of gas or use something we have in abundance, and people wonder why their spending so much for power!
Not
Lord Brown in today's D.T. states that we are currently consuming more coal and less gas than at any time since 1995. This, coming from an 'oil man' is a reality check for those who would write coal off . Hargreaves , despite the appaling wet condiions , making open cast work difficult, again have shrugged off their problems to come up with excellent interim figures. I repeat-'underestimate this outfit off at your peril'.
Offshore wind projects totalling nearly 8GW (equivalent to 20% of daily UK energy demand) given the go ahead yesterday. Hardly dead in the water. :) Also in the news, shale gas to start being imported to Grangemouth by about 2016. 50% cheaper to import from US than extract it from the North Sea. Fracking from the Bowland shale to come online as of next year. The one thing likely to be under pressure as a result of all this is coal production. I think a diverse portfolio is what needs to be considered here.
With the plug being pulled on the proposed massive Atlantic Array windfarm project we have more evidence of a change of sentiment re. 'green' energy. The power has to come from somewhere and with little apetite among investors for any new plant thanks to Mr Milliband's hand of death on the industry Hargreaves finds itself at the sweet spot for some years to come. Up north here where there's muck there's brass!
I am of the belief the share price will go north of ten pounds, does anyone agree.
I still think this share is an absolute gem. Holding far too many for me but I really do believe this is going north. Lets see! GLA
Rather than meteoric we are in for a period of gradual realisation that , despite the smokescreens of rhetoric and subsidies etc, the green energy projections are hopelessly overblown (viz. lack of apetite for infinis). The reality is that for the forseeable future coal is by far the most cost effective way to produce the power to keep us warm as the cold snap arrives. Hargreaves happen to have astutely positioned themselves,against the odds, to be holding the aces as a dominant player with few players in their space.