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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
|
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|---|---|---|---|---|
| -24.00 | -3.55% | 652.00 | 16:35:22 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 640.00 | 640.00 | 654.00 | 652.00 | 676.00 |
| Industry Sector |
|---|
| SUPPORT SERVICES |
| Top Posts |
|---|
Posted at 07/2/2025 18:15 by xtrmntr First-half revenue up 14 per cent to 3125mnPre-tax profit has doubled to £5.3mnNet cash (excluding leasing debt) of £15.7mn18 per cent EPS upgrade to 2025-26 forecastsInterim results from Hargreaves Services (HSP:600p), an industrial group and land developer, highlight the benefits of having a diversified revenue stream.The group's services division, which provides critical support to many core industries (mainly energy, environmental and UK infrastructure) through the provision of mechanical and electrical contracting services, logistics and major earthworks, was the standout performer. Buoyed by additional contract opportunities on earthmoving projects, notably HS2 and Sizewell C, divisional pre-tax profit increased 13 per cent to £8.8mn on 10 per cent higher revenue of £121mn to account for all group profit. Moreover, with 90 per cent of full-year revenue already secured and growth in the order book underpinned by a raft of contract wins, joint house broker Singer Markets upgraded its full-year contribution from this business by £2mn to £14.5mn.Read more from Investors' ChronicleThe European drinks brands benefiting from a market shiftWhy shipbrokers Braemar and Clarkson are defying pay normsThe black sheep of the FTSE 250 deserve a second lookAnother key focus is to realise the value of land assets, in particular at the Blindwells flagship site east of Edinburgh. In the first half, the land division completed the sale of seven acres to Places for People for £3.1mn and subsequently sold 11 acres to Avant Homes for £9.3mn. A third parcel had been expected to complete before the year-end and reap a £2mn profit, but has been pushed back to the new financial year due to transport planning delays.So, although analysts are maintaining their flat full-year group pre-tax profit estimate of £16.6mn, they upgraded 2025-26 forecasts by 18 per cent to £20.5mn to reflect a trebling of the land division's profit to £6mn and a £1mn higher profit contribution of £14mn from the services unit. The outcome could be higher still as Hargreaves is marketing for sale seven renewable energy assets which are held in the accounts at less than £4mn and could realise £13mn, highlighting the hidden balance sheet value. A further £15mn of renewable assets are earmarked for disposal, too.Hargreaves' shares have delivered a 235 per cent total return (TR) since I initiated coverage (Alpha Research: 'A high yielder offering significant hidden value', 19 March 2020), but still trade on a deep discount to sum-of-the-parts valuations of 850p (Cavendish) and 813p (Singer Capital Markets). Rated on undemanding forward price/earnings (PE) ratios of 14.1 (2025) and 11.6 (2026), and underpinned by a 6.2 per cent dividend yield, they rate a buy. |
Posted at 30/1/2025 09:03 by harrogate CT - sign up for investor Meet Company. Then you can watch these things live or a recording. It is free ATB |
Posted at 29/1/2025 16:12 by andy2205 A reminder that there is an Investor Meet session starting at 4.30pm for those interested. |
Posted at 29/1/2025 09:43 by davebowler SingerServices drives earnings upgrades to outer years H1 results highlight continued delivery, with cash continuing to be returned from HRMS, value realised within Land, Services enhancing its pipeline and the dividend increased to 18.5p (H1’24: 18.0p). Revenue increased by 14%, with an improved adj. PBT outturn of £5.3m (H1’24: £2.7m). Services has secured 90% of its work for FY25, alongside additional earthmoving volumes. This drives an upgrade to expectations for Services. In FY25, this is offset by a delay to a particular land sale, which is now expected in early FY26. We upgrade our FY26/FY27 PBT forecasts by 18%/5%, reflecting the enhanced Services pipeline and, in FY26, the delayed land sale. An improved performance within HRMS also provides a solid base for H2. Against a confident outlook, we continue to see significant value and remain at Buy, with an 813p TP. Strong H1 outturn confirmed Revenue increased by 13.7% in H1 to £125.3m (H1’24: £110.2m), driven by an increase in earthmoving activities on several large infrastructure projects. PBT also increased from £2.7m to £5.3m. Much of this was driven by strong growth in Services but it also reflects a turnaround in HRMS. Net cash stood at £15.7m at Nov. ’24 (May ’24: £22.7m), reflecting continued investment in Land assets ahead of contracted sales, one of which completed in Jan. The pension Buy-In further strengthened the balance sheet, as did a further £6.3m return of cash from HRMS. As a sign of confidence, the interim dividend is increased to 18.5p (H1’24: 18.0p). Improved Services pipeline driving earnings upgrades Services secured several new contract wins and renewals in H1, as well as growth in activity on existing works, notably HS2 and Sizewell C. Services guidance is therefore increased in all years. In FY25, this is offset by planning delays for a specific land sale and overall expectations are unchanged. We upgrade our FY26/FY27 PBT forecasts by 18%/5%, benefiting from an enhanced Services pipeline and, in FY26, the delayed land sale. An improved performance within HRMS provides a solid base for H2, whilst marketing of the first tranche of renewable assets leaves open the prospect of a further land disposal in 2025 (not in forecasts). New COO role strengthens management team As flagged, David Anderson will retire in May. Hargreaves today announces the appointment of Simon Hicks as COO, joining in June. He has broad experience across infrastructure & energy markets, having held senior roles within Cape plc, Altrad Services, Bilfinger and Evero Energy. He will focus on driving value in Services. Shares attractively valued Against a confident outlook, we continue to see significant value in the shares. As Hargreaves transitions to a capital-light and profitable Services and Land Development business, we expect several value realisation events, with potential to return up to £150m of capital vs. a market cap of £198m. Investors are paid to wait for value to be realised, with a sustainable dividend yield of 6%+. The shares trade at only a small premium to NAV (580p) and significantly below our conservative SOTP valuation of 813p (increased from 757p). Buy |
Posted at 20/1/2025 11:21 by carcosa Similarly from the VoxMarkets video ( Hargreaves Services operates in three divisions: 1. Land Development 2. Contracting Services 3. A joint venture focused on overseas commodities and renewables. The joint venture is somewhat complex because its economic ownership significantly exceeds its share ownership. This structure was designed to keep debt off the balance sheet. The overseas business, which had faced challenges, is now recovering. In the longer term, it stands to benefit from new legislation in Europe and the UK. This legislation requires companies importing materials like pig iron to purchase carbon credits. The exact cost of these credits is still under debate, particularly in Germany, where it could heavily impact the car industry. However, these regulations are expected to generate pure additional profit for Hargreaves. The overseas business focuses on pig iron, zinc, and commodity trading in Germany, historically a very profitable area. Meanwhile, their UK operations are performing well, aided by increased spending on infrastructure projects like HS2. Although HS2 has run over budget, Hargreaves has benefitted through ongoing contracts. Looking ahead, the company is poised to participate in two major reservoir projects in the UK, each worth billions of pounds. Given the ESG requirements tied to these contracts, few UK companies can compete, and Hargreaves expects to secure substantial work, potentially worth £100–£200 million per project. They also recently secured a significant contract for Sellafield. A major success for the company was resolving its pension deficit. Initially estimated to cost £45 million, they managed to eliminate it for just £7–8 million, removing a significant liability from the balance sheet. The company now has no debt, around £15–20 million in cash, and has increased its dividend to 36p per share, which is fully covered. The dividend yields approximately 6%, providing investors with a steady income stream while awaiting further monetization efforts. Additionally, Hargreaves owns land in Scotland, listed at a low valuation on the balance sheet. This land is being used for wind farms and battery storage projects. Management has indicated plans to monetize these assets and return the capital to shareholders, potentially generating substantial returns. The company’s balance sheet shows some lease-related debt tied to HS2, where equipment has been leased for the project. Once the leases end, the equipment will be owned outright, providing residual value. With the potential to win large reservoir contracts and other significant infrastructure projects, Hargreaves remains well-positioned for future growth. Finally, the scale of upcoming reservoir projects is enormous. For example, the earthworks for a major project near London are estimated to cost around £3 billion. While Hargreaves wouldn’t be the sole contractor for these projects, they are well-placed to secure sizeable contracts. In summary, Hargreaves Services is a strong-performing business with robust financial health, promising prospects for asset monetization, and the potential to unlock substantial shareholder value. |
Posted at 20/1/2025 11:19 by carcosa From the Q&A section of the Investormeet webcast ( ) I produced the following:Currently, we're in the asset realization phase, which means our focus is on unlocking value from the business. We first invested in 2016 when this was primarily a coal trading business. Today, the company operates three divisions: Land Portfolio: This includes a large amount of land, particularly in Scotland, which onshore wind farm providers are interested in purchasing. The portfolio is on the books at approximately £8 million but was independently valued at a base case of £40 million. The estimated value per share for this division is £2.63. Services Division: This division covers activities like earthworks, waste management, aggregates, and similar operations. German Joint Venture: We hold an 86% economic stake in this joint venture. It includes several operations, such as processing steel dust through a blast furnace to produce pig iron and zinc, a trading business, and a coal-polarization business. For the land portfolio, our strategy is to sell assets to realize their value. The company’s shares currently trade at approximately £5.65. Based on the value we aim to unlock, excluding any growth across the businesses, we estimate the shares should be valued at around £8 per share, potentially growing to £9 per share over time. Over the next three years, we plan to progressively sell assets. The timing will be uneven, but the first renewable energy asset is already up for sale, estimated to be worth £10–10.5 million. For context, the entire renewable energy portfolio was valued at £8 million, meaning this first sale provides an immediate uplift in value. The company recently declared a dividend of 36p per share, which generated significant interest from institutional investors. This dividend is part of the cash returned from Germany following a refinancing effort. In addition to regular dividends, the company plans to issue special dividends whenever assets are sold, returning that capital to shareholders. Importantly, none of the proceeds from asset sales are being reinvested in growth, as this is solely an asset realization project. On the financial side, the company has resolved one of its major historical risks—its pension deficit. This has now been eliminated, removing a significant liability. The company currently has about £23 million in cash, excluding lease obligations, which are tied to the Earthworks business. The Earthworks division has been performing well, focusing on large-scale projects with margins between 12–15%. For comparison, smaller Earthworks contracts typically have margins of around 3%, which is why the company only takes on major projects. In Germany, the business was extremely profitable during the early stages of the Russia-Ukraine war when the price of pig iron soared from €150 per ton to €900 per ton. During that period, the division produced around 250,000 tons per year, generating £60 million in PBT (profit before tax), compared to £8–9 million in a typical year. This has created a significant cash reserve in Germany, which is now being returned to shareholders. Although pig iron and zinc prices have since come down, they are expected to recover due to new regulations, including the Carbon Border Adjustment Mechanism (CBAM). This policy, expected to take effect next year, will impose carbon credit costs on imported carbon-intensive materials like steel and fertilizer. The current price of carbon credits is around €65 per ton, meaning imports will face an additional €130 per ton in costs. Our business, which operates domestically within Europe, is well-positioned to pass through these costs to customers. However, industries in Germany and China will face significant challenges due to these taxes, which may lead to political intervention. If CBAM is implemented as planned, it will provide a substantial uplift to our German operations. For instance, even a modest benefit of half a credit per ton across our 250,000 tons annually could generate significant additional profit. In summary, we remain focused on unlocking the value of our assets, returning capital to shareholders, and leveraging favorable market and regulatory conditions to maximize returns. |
Posted at 06/1/2025 15:18 by totally banjo 06 January 2025Confirmation of Interim Results Analyst & Investor briefing schedule Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the environmental, industrial and property sectors, confirms it will hold the following briefings with respect to its interim results for the six-month period ended 30 November 2024 on Wednesday 29 January 2025: Analyst briefing A briefing open to sell-side equity analysts will take place on Wednesday 29 January 2025 at 9.30 am GMT. To register and for more details please contact Walbrook PR on hargreaves@walbrookp Investor presentation Gordon Banham, Group Chief Executive Officer, Stephen Craigen, Chief Financial Officer, and David Anderson, Group Property Director, will provide a live presentation in relation to the Company's interim results via the Investor Meet Company platform on Wednesday 29 January 2025 at 4.30pm GMT. The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am GMT the day before the meeting or at any time during the live presentation. Investors can sign up to Investor Meet Company for free and add to meet Hargreaves here. |
Posted at 10/12/2024 15:43 by red ninja HSP in Questor column in Daily Telegraph :-This overlooked gem offers a fat yield while waiting for long-term growth Questor believes this infrastructure company could reward patient support Russ Mould 10 December 2024 5:00am GMT A second, consecutive trading update from Hargreaves Services that provides little incremental good news might not sound like much but there is no bad news, either. And this column is more than happy to take that, given its recent travails with Zytronic, Resolute Mining, S&U and others. Moreover, this column adheres to its view that financial markets are get-rich-slow mechanisms, when they work at their best. And Durham-headquartered Hargreaves Services still looks more than capable of helping here, given the long-term contract revenues, asset backing and dividend yield it provides. Hargreaves Services derives the majority of its revenues from its infrastructure arm, where it provides mechanical and electrical services to major water and electricity utilities, as well as earthmoving and raw materials handling, in the UK, South East Asia and South Africa. The company also has a 9,000-acre bank of brownfield land, which it regenerates and sells to developers for a range of uses, including warehouses, renewable energy projects and residential development. Finally, it owns 49.9pc of the equity in HRMS, a German raw materials and recycling operation where Hargreaves has the right to the vast majority of the profits. Around 65 framework contracts, including those on the Lower Thames Crossing projects and Suffolk’s Sizewell C nuclear power plant, provide good visibility of earnings, even if the timing of land sales can be unpredictable and revenues lumpy, while a steady improvement in the housing market could boost the land business, too. Hargreaves Services key facts Market Value: £191m Turnover (May 2025 est): £223m Pre-tax profit (May 2025 est): £16.5m Yield (May 2025 est): 6.2pc Most recent year’s dividend (May 2024): 36.0p Net debt (May 2024): £13m Return on capital employed (May 2024): 8.3pc Cash conversion ratio (May 2024): 171pc P/e ratio (May 2025 est): 13.6x The latest update suggests that Hargreaves Services will show an improved performance in the year to May 2025, as will HRMS, while Hargreaves Land will show a decrease relative to the record profit recorded in fiscal 2024. All of these trends support analysts’ forecasts of a modest increase in revenues and faster advances in both underlying pre-tax income and underlying earnings per share. Those in turn, along with a balance sheet that carries very little by way of net debt, underpin analysts’ expectations of an unchanged dividend of 36p for the full year, enough for a dividend yield of 6.2pc. The 18p final distribution for fiscal 2024 has already been banked, to take our total return from the stock so far into the mid-teens in percentage terms. That tidy yield means investors are being paid while they wait for Hargreaves Services to deliver on its long-term framework deal and its land portfolio. They should also get some downside protection from the lowly valuation afforded the stock. The fat yield is one facet of that, while another is the multiple of net asset, or book value, per share at which the shares trade, which is just one time. The full-year accounts to May 2024 showed £192m of net assets on the balance sheet, of which £186m were tangible and that latter figure compares to a stock market valuation of £191m at the time of writing. Questor says: hold Ticker: HSP Share price: 580p |
Posted at 05/12/2024 12:20 by davebowler Singer target price £7.57Strong H1 outturn expected; Guidance unchanged Hargreaves’ H1 update confirms a strong expected H1 outturn, with growth expected in both Services and HRMS and stability in Hargreaves Land. The Board remains confident of delivering full year results in line with expectations, supported by continued strong visibility in Services, improved performance at HRMS and a return to normal profit levels in Land. On 30th November, the Group held cash of £15.7m (Nov 2023: £18.7m), with no bank debt, reflecting investment into certain land assets ahead of anticipated realisations in H2. Against a confident outlook, we continue to see significant value in the shares. The investment case is clear - as Hargreaves transitions to a capital-light and profitable Services and Land Development business, we expect a number of value realisation events, with potential to return up to £150m of capital vs. a market cap of £194m. Investors are paid to wait for value to be realised, with a sustainable dividend yield of 6%+. The shares trade at a discount to NAV of 583p and significantly below our conservative sum of the parts valuation of 757p. Buy. Continued growth in Services, with strong pricing power protecting margins Services continues to see steady growth in revenue as the business unit focuses on growing its underlying contract base. Work continued on HS2 throughout H1 and the expectation is that the project will continue for at least a further two years. The Group has also expanded its preparatory earthworks activities at the Sizewell C Nuclear Power Station. The Services business remains resilient, with good visibility supported by a solid portfolio of term and framework contracts with blue-chip customers within the UK infrastructure and energy sectors. The recent UK Government Budget, in particular, the increase in Employers National Insurance Contributions, is not expected to have any significant impact on the business due to the nature of many of its service contracts, which often include escalation factors or “cost plus” arrangements. Hargreaves Land focused on value realisation from the renewable land assets Hargreaves Land remains focused on realising value from the first tranche of renewable energy land assets. The marketing of these assets is well underway and interest received to date has been encouraging. A further update will be provided in due course, as appropriate. Improved performance at HRMS HRMS has delivered an improved performance in H1 as commodity pricing has continued to normalise. As previously reported, HRMS has already paid the planned dividend to the Group for the current financial year. |
Posted at 31/10/2024 12:07 by totally banjo From yesterday:A brief presentation delivered at the AGM by CEO Gordon Banham, will be available on the Company's website: hxxps://www.hsgplc.c Also updated on their 'X' (twitter) feed: hxxps://x.com/hargre |
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