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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Hargreaves Services Plc | HSP | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
|
|---|---|---|---|---|
| -8.00 | -1.40% | 562.00 | 14:25:41 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 564.00 | 562.00 | 564.00 | 570.00 |
| Industry Sector |
|---|
| SUPPORT SERVICES |
| Top Posts |
|---|
Posted at 08/2/2024 16:41 by red ninja Tipped in Shares Magazine today in article"5 Small Cap Stars To Buy Today" Hargreaves Services (HSP) 475p Market cap: £155 million Whereas some of the other companies in this feature are mainly about growth, Hargreaves Services (HSP) is an asset-backed income play. The firm has a core infrastructure services business, a land business and a large stake in a German industrial materials business. The bulk of its revenue comes from the infrastructure side where it provides earthworks, mechanical and electrical services to major water and electricity companies, as well as working on HS2. It is also a preferred partner to Balfour Beatty (BBY) on the Lower Thames Crossing project, and it is the only contractor on site at the Sizewell C nuclear power plant in Suffolk. The land business owns large former brownfield sites which it upgrades and sells to developers, who go on to build houses, industrial, logistics or retail warehouse assets and renewable energy projects. After a flat first half of 2023, activity has picked up significantly among the housebuilders and commercial activity is also increasing. Finally, Hargreaves owns 49.9% of the equity in – but the right to 86% of the earnings from – HRMS, a raw materials business in Germany which trades industrial materials, makes carbon and recycles ferrous metals. Using a sum-of-the-parts valuation approach, we believe the business is worth around 800p per share, nearly 70% more than its current market value and slightly above the 770p figure achieved by analysts at Singer Capital Markets using a similar process. We estimate the services business is worth around £100 million or 300p per share, the land business – where the assets are held at book cost – is worth another £100 million, or 300p per share, and the German unit has a book value of £67 million or 200p per share, excluding any profits generated. Obviously realising this value will take time, but in the meantime, investors have the comfort of a fully covered 36p annual dividend which equates to a 7.5% yield. [IC] |
Posted at 27/1/2024 14:24 by red ninja Well the singer target price is £7.70 and the company in the investor meets company presentation is saying the company is worth £8With company parts Services at £3, Land at £3 and HMRS at £2. If the company's plans go ahead as planned and paying a sustainable 36p a year dividend (covered by profits) then I think they will get to £6 and eventually £8. However, the market will probably want to see evidence that thing are going to plan in the next few results before the company sees that sort of move in it's share price. |
Posted at 24/1/2024 11:12 by davebowler Singer -Strong H2 outlook, with six-fold dividend increase Interim results are as expected, reflecting a strong performance in Services, fewer completions in Land and a slowdown within HRMS. As previously flagged, the reduction in activity at HRMS has reduced working capital consumption, resulting in a significant cash release to Hargreaves, with £8m received during H1 and further cash repatriations of no less than £7m p.a. expected. Combined with strong progress on the imminent pension buy out, this has facilitated a material, six-fold increase in the interim dividend to 18p (H1’23: 3p). The outlook for H2’24 and beyond is strong, with 90% of our FY24 revenue forecast for Services now secured, Land poised to deliver its best ever full year result, with several post-period end completions secured, and confidence in a return to profit at HRMS. We remain at Buy, reiterating our 770p TP and note the attraction of the 9% dividend yield as management executes its value realisation strategy. H1 outturn as expected Hargreaves’ interim results highlight that Group revenue decreased by 5.4% to £110.2m (H1’23: £116.5m) due to several sales within Hargreaves Land completing post period end., whilst Services performed strongly, with revenue increasing by 1.6%. As anticipated, HRMS recorded a post-tax loss of £1.9m (H1’23: profit of £10.8m) during H1’24. Group PBT therefore decreased from £18.7m to £2.7m. The prior year period also benefitted from a non-recurring gain of £2m. Six-fold increase in the dividend with balance sheet remaining strong As anticipated, reduced activity at HRMS has reduced working capital consumption, resulting in a significant cash release to Hargreaves, with £8m received during H1 and further cash repatriations of no less than £7m p.a. expected. Combined with strong progress on the pension buy out, this has facilitated a material, six-fold increase in the interim dividend to 18p (H1’23: 3p). The Group held cash of £18.7m at Nov. ’23, with no debt. Cash is expected to remain strong across the forecast period. Strong outlook, with significant profit recovery expected in H2’24 The outlook for H2’24 and beyond is strong, with 90% of our FY24 revenue forecast for Services now secured, Land poised to deliver its best ever full year result, with several post-period end completions secured, and confidence in a return to profitability at HRMS. We therefore anticipate a significant profit recovery in H2’24, forecasting PBT of £13.4m after the £2.7m H1 outturn (FY24E: £16.1m). Share remain attractively valued with substantial dividend yield The valuation remains attractive, with the shares trading on a May ’24 P/E rating of only 10.1x. Our SOTP valuation underpins a 770p TP. Management is executing a strategy to realise this value, with plans to dispose of the renewables portfolio in the first instance (on track). Investors are paid whilst they wait for this, with a very attractive 9% dividend yield. This makes HSP a high conviction Buy idea. |
Posted at 21/12/2023 07:53 by spooky As an outside observer i would have to imagine most investors in the company knew this was likely to happen. If you bought based on earnings then this will be an issue, however if you bought based on valuation and long term cashflows, its less of a problem IMO. |
Posted at 10/11/2023 11:17 by red ninja Downing Strategic Micro Cap have also announced they are on a staged winddown of the company as in (ie they will be selling their HSP stake at some stage) :-" Future of the Company As we highlight above, the negative sentiment towards UK small companies has continued in 2023. Value and micro-cap strategies have been equally out of favour and despite outperformance against the relevant indices over the last two years, DSM has struggled to attract any new investors with the company itself being largely the only acquiror of its shares. Discounts of investment trusts are wider than they have been in the last 20 years and as wealth management investment trust buyers themselves consolidate, there is little interest in a small specialist investment trust like DSM. This continuation of negative sentiment has coincided with a period of intense M&A activity in the portfolio with investments representing more than 20% of the net assets now under offer or in a strategic review process. Given the redemption option in May 24 and the negative sentiment to UK smaller companies the board and manager believe that it is in the best interests of shareholders to begin a phased and managed return of capital to shareholders. In order to achieve this, shareholders will be asked to approve the alteration of the Company's investment policy to a managed wind-down strategy. Pursuant to this strategy, it is the board's plan to return at least 20% of current net asset value in Q1 2024 (assuming the current offers for portfolio companies complete as expected). Thereafter it is intended that there will be regular distributions to shareholders as realisations permit, with a commitment to return cash as it reaches an appropriate level such that the cost of making distributions is not prohibitive. The manager believes that it is likely that further corporate activity in the portfolio that will enable this to be realised. Inevitably, due to the nature of some of the investments, natural liquidity will be limited and hence there could be some time before a full and complete return of capital is made. Further details of this will be outlined in the coming weeks, however the manager has identified key catalysts within portfolio companies that point to an estimated intrinsic value of the portfolio, which if the divestments are carefully managed, would indicate an upside of at least 50% to current market cap. It is therefore the priority of the board and manager to realise this value and return capital to investors in the most efficient and effective way possible. Further details on the proposed divestment plan, expected running costs, board composition, return of capital and revised management arrangements will be detailed by the end of the calendar year." |
Posted at 08/11/2023 14:02 by daisylove What strikes me is that there is very little trading on this under the radar stock. There seems to be a number of moving parts that might put investors off and no real sign of an uptrend. The spread doesn't help. Nonetheless will look at adding at around 412 (spurious accuracy I know) which I'm sure we'll get to soon. |
Posted at 19/10/2023 16:40 by daisylove Every time I add it goes down. Funny that. Maybe my c.600p tp is a total miscalculation or rather a misspeculation.Have also added to KLR so bad luck to fellow investors there too! Seriously though it looks like we are in a slow but steady decline esp. in UK stocks. |
Posted at 01/8/2023 12:53 by daisylove Currently on another little downtrend with extremely low volumes. The swings make it very difficult to know entry and exit points. I'm certainly not getting back in at 446p. If it suddenly gets investor interest and turns upwards and I miss it then too bad. It's happened before. I wonder if the recent negative views in HS2 have an influence? |
Posted at 15/7/2023 08:39 by red ninja The Investor Meets Company presentation for Downing Strategic Micro Cap is available (12th July).It is makes it clear they still like Hargreaves Services, but they needed cash to support FireAngel and to invest Volex. So they took some profits in Hargreaves Services ie diversification. However, although not said, they probably sold HSP in preference to some other shares in the portfolio where they had higher profit expectations. |
Posted at 05/7/2023 10:24 by daisylove Having missed the dips over the past year or so I've bought on the basis that the EPS is good and the PE is under 4. Whether the latter is a good sign or not I'm not sure but there we are. I guess the share price is all about whether investors have confidence in the economy. |
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