Fergusson Group, the coal importer and supplier, has reported a £5.9million loss as it grapples with lower prices and the decline of the power station market.
The Stirling-based company owned by brothers Tom and Alan Fergussson signed a deal in 2014 with ScottishPower for its Longannet power station and hailed it as a major long-term supply agreement, while a year ago it said power station coal would remain an important sector for the group.
But Longannet is due to close next month, and Fergusson now says: “The group had anticipated tightening competitive conditions and lower demand in the UK power station coal market, and has taken action to significantly reduce exposure to this commodity price-driven sector going forward.”
It says a “downscaling and streamlining” of the business triggered exceptional charges for a “transition away from the power station market, enabling management to focus on the house coal and specialist sectors going forward”.
It was unable to give any more detail on the exceptionals or the split of its business, but said a writing-down of the value of coal stocks had played a part.
The company says it made an underlying profit of £800,000 in the year to March 2015. Turnover across the group was down from £146m to £130m.
It said performance in the core house coal market had held up well through the period despite the milder weather which had impacted the whole UK heating sector. It had added new retail outlets, and increased sales in niche industrial markets for solid fuel.
“The directors are confident that the business is well positioned to build upon its market-leading position in the house coal and specialist sectors, supported by its extensive range of retail outlets and backed-up by a flexible and efficient fuel supply, processing and distribution chain.”
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