Hargreaves Services Share Discussion Threads

[harrogate] 10/8/2023 14:32

I agree - this is from the original announcement We have recently commissioned the first independent valuation of these renewable energy assets by Jones Lang LaSalle Limited. This review has placed a Market Value Today* in the range of between GBP21.6m and GBP23.1m on these assets as at 30 June 2023 with a Market Value at Commissioning of Development ("COD")* expectation in the range of GBP27.2m to GBP28.9m for when the assets commence generation which is at various points over the period to January 2027.

[smithie6] 10/8/2023 14:24

Gargoyle wrote
". I expect the renewables arm to be sold off well ahead of the 5 year timeframe they quote for realising that value. A clean energy or renewables fund will buy it imo."

personally I disagree.
the selling price for the renewables section would be much higher once the wind generators etc are all installed & operating & the income can hopefully be proven as stable & predictable....which will take time. At some/many sites there are agreements but no wind turbines yet installed.

[daisylove] 10/8/2023 11:50

Well I'll watch and wait for a retrace - which should benefit the holders as it will therefore probably never happen! At least Hargreaves doesn't seem to follow the FTSE main market roller coaster which is like some kind of dodgem.

[riverman77] 10/8/2023 10:43

ST tips don't seem to have the impact they once did - have been a few very bad picks recently (eg RBGP) so that might explain it.

[castleford tiger] 10/8/2023 10:17

parking cash here at 470/480p gets you 4.5%
plus a chance of some specials and
a chance of some capital growth

downside looks very limited.

tiger

[paleje] 10/8/2023 07:24

ST upped his target to 700p

[harrogate] 10/8/2023 06:18

Having watched the IMC session yesterday, especially the Q&A I am much more confident about cash repatriation from Germany. It was an excellent presentation from a confident team who understood that the discount to NAV needs closing. The growth in the engineering services business outside HS2 was a surprise and that business is in great shape. I will not be selling anywhere around here and think this is a great growth opportunity while the dividends roll in.

[gargoyle2] 09/8/2023 21:32

CEO said on the presentation today that there would be further news on extracting cash from the JV at the interims in 6 months time. Depends on how the JV trades over the next few months. I expect the renewables arm to be sold off well ahead of the 5 year timeframe they quote for realising that value. A clean energy or renewables fund will buy it imo.

[castleford tiger] 09/8/2023 18:05

market agrees with you.

I expect EPS to be above forecast for current year.
tiger

the cash must be making a few quid

[harrogate] 09/8/2023 14:52

I don't think the share price can make much further progress until that "eventually" gets firmed up. I see no reason this shouldn't have been flagged now to start say next year. What will move us from here? EPS reduce in next 2 years and we know the asset value. I am sure we need to see how we are going to get cash from the JV before we go higher.

[daisylove] 09/8/2023 14:06

Tiger - I feel that I'll get another chance since this one is so volatile. I should really look into DMA to try and reduce the spread but I try to avoid stocks with large spreads.

[castleford tiger] 09/8/2023 13:21

Harrogate

The money will come back via special dividends eventually.

The pension clean up/sale is the first sign to me that we are then up for sale.

The long term plan to grow the revenue stream from renewables and the money to come back from Europe may well lead to special dividends.
The cash pile is growing as is the NAV with much of the land still in at cost.

tiger

[smithie6] 09/8/2023 12:36

...good point

[harrogate] 09/8/2023 12:34

Lovely FY23 performance but I am disappointed that the reduction in trade in Germany and the resulting wind down of inventory hasn't produced a definite plan to get that to U.K. and fund an additional annual special dividend to add to the 12p we have been getting. I think there was an implicit understanding that would happen.

[peterm35] 09/8/2023 12:27

A decent set of results today. Particularly pleased with the plan to sell off the pension scheme.

Interested to see what Simon Thompson has to say.

[smithie6] 09/8/2023 10:12

Tiger
well done for buying the dips.
I might have had a small top up but otherwise not much spare cash.

Nice results today.

[davebowler] 09/8/2023 09:57

Singer
Clear value creation plan supports investment case Hargreaves’ final results are slightly ahead of expectations, with organic growth as expected and a non-recurring plant sale leading to the profit outperformance. Adj. PBT was £27.3m vs. our previous forecast of £25.8m. Services and Land experienced strong growth, partially offset by the anticipated normalisation of profits in the German JV, HRMS. FY24 forecasts are well supported, with 70% of our revenue forecast for Services now secured and a land sale already exchanged. Hargreaves continues to create and deliver value for shareholders and realisation of this has started, with a clear plan to realise its renewable portfolio outlined in the 25th July RNS. We see significant future value creation for shareholders as the Group realises the value from its assets. Our sum of the parts valuation underpins a 770p target price (increased from 710p) and our Buy recommendation. Strong FY23 outturn, slightly ahead of expectations Hargreaves’ results report that revenue increased by 18.9% to £211.5m (2022: £177.9m) driven by organic growth in Services. Adj. PBT was above expectations at £27.3m vs. our previous forecast of £25.8m. This is a small decrease on the prior year result of £30.4m, reflecting an anticipated reduction in profitability in the German JV, HRMS, offset by growth in both Services and Hargreaves Land. The outperformance was driven by a non-recurring plant sale. Year end cash stood at £21.9m (2022: £13.8m), with lease liabilities of £36.4m (2022: £18.4m). The Group has declared a final dividend of 6.0p and an additional dividend of 12.0p, making a total payment for the year of 21.0p (2022: 20.4p). Strong outlook with FY24 forecasts largely unchanged The Group has maintained the momentum it has built over the last few years and demonstrated its resilience, particularly within Services. The FY24 outlook is strong, with 70% of expected revenue for the year in the Services business already secured and with Hargreaves Land having exchanged unconditional contracts for a large plot at Blindwells which is scheduled to complete in Jan. ‘24. We therefore leave our FY24 PBT forecast unchanged. We also introduce a new FY25 forecast (see p.2). Balance sheet remains strong with dividend forecast upgraded The balance sheet remains free from bank debt and third party security and continues to provide a strong and stable platform for growth. A planned pension buyout should strengthen this further, saving the Group £1.9m p.a. at a cost of c.£15m. This supports an upgrade to our dividend forecast. Shares attractively valued We increase our target price to 770p from 710p, supporting our continued Buy recommendation. We use a sum of the parts valuation to underpin this, with a clear plan to deliver and realise value over the medium term. As well as the value creation plan, we note the continued attraction of a 5% yield.

[castleford tiger] 09/8/2023 09:50

bet there are a few on here who wished they had kept the faith.

I cannot keep defending the company and stating how undervalued it is.

With 4% to come in October based on 18p dividend and 480p share price i think my policy of buying all these previous dips has proved correct.

Anyone got a revised note with current year forecasts and eps please.

I will get mine later.

I bet DAISYLOVE wished they had bought back at 446p.

good day for the holders.

tiger

[phar lap] 09/8/2023 08:17

Singer update target price,

Hargreaves’ final results are slightly ahead of expectations, with organic growth as expected and a non-recurring plant sale leading to the profit outperformance. Adj. PBT was £27.3m vs. our previous forecast of £25.8m. Services and Land experienced strong growth, partially offset by the anticipated normalisation of profits in the German JV, HRMS. FY24 forecasts are well supported, with 70% of our revenue forecast for Services now secured and a land sale already exchanged. Hargreaves continues to create and deliver value for shareholders and realisation of this has started, with a clear plan to realise its renewable portfolio outlined in the 25th July RNS. We see significant future value creation for shareholders as the Group realises the value from its assets. Our sum of the parts valuation underpins a 770p target price (increased from 710p) and our Buy recommendation.

[gargoyle2] 09/8/2023 07:12

By '70p plus EPS', I meant of course 86.3p !

[gargoyle2] 08/8/2023 18:08

70p plus EPS tomorrow may help focus the mind on how cheap this is.

[castleford tiger] 08/8/2023 17:58

strong rise onto results

tiger

[mexico man] 01/8/2023 19:49

The hs2 work they are doing is well on its way

[daisylove] 01/8/2023 12:53

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?

[peter oconnor] 01/8/2023 11:00

Super time to buy now whilst the market is been manipulated