News & Media

Hargreaves (UK) Holdings Limited (to be renamed Hargreaves Services PLC) (“Hargreaves” or the “Group”), a leading provider of transport and support services to the energy and waste sectors, announces its intention to float on AIM. The Group anticipates that dealings in its existing and new ordinary shares will commence by early December 2005.

• Hargreaves plans to raise up to approximately £20m net of expenses by way of a Placing of new ordinary shares (the “Placing”) with institutional and other investors. The proceeds of the Placing will be used to reduce gearing allowing the Group to fund the growth of the business organically and by acquisition.
• The market capitalisation on admission to AIM is expected to be approximately £60m.
• Founded in 1994 as a coal haulage business with approximately 20 vehicles. The Group’s activities have now been transformed to cover mineral trading, coke production, waste handling and transportation, handling and processing of minerals through its two port facilities as well as specialist bulk road haulage. The Group employs approximately 600 staff.
• Since formation, the Group has expanded both organically through winning new contracts, diversifying into other business areas and by acquisition. The Group uses its critical mass to create economies of scale and efficiency improvements. It enjoys strong visibility of earnings through long term contracts.

Hargreaves operates through four divisions:

• Transport Services, one of the UK’s largest specialist bulk hauliers, with a fleet of approximately 200 vehicles. It provides services to customers requiring transport of bulk materials from 10 depots across the UK. This division is key to the successful integration of all the Group’s activities;
• Waste services, a growing provider of logistical support services to the UK waste industry, currently servicing 11 waste transfer stations and 25 civic amenity sites, handling industrial and domestic waste on behalf of waste management operators in the public and private sector;
• Mineral and Industrial Services, sources, processes and distributes coal and other minerals to the energy sector and to industrial, wholesale and public sector clients. The Group operates at two port facilities, Immingham on the East Coast and Newport in South Wales;
• Monckton Coke Works, which was acquired by Hargreaves in June 2005, is the only independent producer of metallurgical coke in the UK. It produces 200,000 tonnes of coke per annum for use in the production of soda ash, specialist ferro-alloys and for domestic heating.

• In the year ended 31 May 2005, Hargreaves (excluding Monckton Coke Works) reported a turnover of £87.6m (2004: £65.7m) and operating profit, pre-exceptionals of £3.5m (2004: £2.7m). Where possible the Group enters into long term contracts with its customers.
• Monckton Coke Works was acquired for £12m in June 2005. Since acquisition, Hargreaves has made a number of efficiency improvements which will be reflected in the Group’s performance in the current year.
• The Directors believe that there are strong prospects for organic growth, with acquisition opportunities in the mineral and industrial services and waste businesses.
• The Directors believe that demand for its services will be driven by an increasing need for imported coal, competitive pricing, legislation, increased capacity, expansion into new ports and an increasing trend towards outsourcing of services.
• There are significant barriers to entry for new entrants to each of Hargreaves’ markets.
• Brewin Dolphin Securities is acting as Nominated Adviser and Broker to the Group.

On plans for the flotation, Gordon Banham, Group Chief Executive said, “The Directors believe that Hargreaves has reached a stage in its development where its strategic objectives can be more readily achieved as a publicly quoted company. We believe that a quotation on AIM will provide the Group with access to new sources of funds and provide a value to its shares which should facilitate Hargreaves in achieving its growth aspirations whether organically or by acquisition.”

For further information, please contact:

Hargreaves
Gordon Banham
Tel: 0191 373 4485
gordon.banham@hargreavesservices.co.uk

Buchanan Communications
Tim Anderson/Diane Stewart
Tel: 020 7466 5000
tima@buchanan.uk.com/dianes@buchanan.uk.com

Brewin Dolphin Securities
Andrew Kitchingman/Andrew Emmott
Tel: 0113 241 0130

Brewin Dolphin Securities Limited, a member of the London Stock Exchange, authorised and regulated by the Financial Services Authority, is acting for the Company only and will not be responsible to any other persons for providing the protections afforded to clients of Brewin Dolphin Securities Limited or for advising such person on the matters referred to in this announcement. Brewin Dolphin Securities Limited has not approved the contents of, or any part of, this announcement.

High resolution images are available for the media to view and download free of charge from www.vismedia.co.uk.