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Hargreaves

March 2007

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:
  • 515p
Spiking the shares over £5 was news that Hargreaves was buying Maltby Colliery from UK Coal for £21.5m ( and assuming a pension deficit of £8.6m). The acquisition is being funded by a placing of 2.37m shares at 469p to raise £11.1m with the balance from increased bank debt. Proforma net debt rises to around £29m for interest cover of 6.7x. Contemporaneously with the acquisition, a three year contract with Drax Power has been signed which will account for 60% of 2007 output, underpinning revenue going forward. Based in South Yorkshire, Maltby Colliery has been a working mine since the 1900s and during this time four seams have been worked via three shafts. Only one seam has been worked since 1992. ...

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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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