10 December 2019 – acquisition by Hargreaves Raw Material Services

Hargreaves Raw Material Services has acquired 94.9% of DK Recycling und Roheisen GmbH from DK Holdings GmbH for €1. The acquired business is based in Duisburg, Germany on a site adjacent to Hargreaves Raw Material Services’ CPP.  DK Recycling und Roheisen’s audited accounts for the year ended 31 December 2018 were prepared under German accounting standards and showed revenue of €135m, a loss before tax of €2.2m and net assets of €15.8m. After fair value adjustments to comply with IFRS, net assets are thought to be approximately €1. The principal adjustments relate to the recognition of pension liabilities, provisions against inventory, provisions for taxation liabilities and the write down of certain items of plant and machinery. The latest management expectation is that DK Recycling und Roheisen will break even for the year ending 31 December 2019.  This deal does not really affect our view on the value of the company and we keep our BUY rating.