Hargreaves Services Share Discussion Threads

[cc2014] 10/12/2019 11:50

Acquisition by HRMS today, which gobbles up a company with a turnover of 135m euro for 1 euro which loses a couple of million a year. Which is sizeable even with Hargreaves 49%/84% share depending on how you look at it.

HRMS, is the Group’s only material associate investment. HRMS is a key supplier of
specialist raw materials to major European customers in the steel, foundry,
smelting, ferroalloy, sugar, limestone, insulation, refractory and ceramic industries. HRMS has worldwide expertise in raw material sourcing, port operations
and logistics management. This combined with the Group’s expertise in production operations, material handling, storage operations and logistics,
marketing and technical support, creates an ideal platform for HRMS to compete in the supply of bulk carbon products in Europe. The Group is entitled to
86% of the profits of HRMS, however the Group does not exert control over the business. The Group holds 49% of the voting rights, with the remainder being
held by the HRMS management team and has one of the four Directors. The Group does not have the power to change these arrangements. A shareholder
agreement is in place to provide the Group with safeguards designed to protect its investment; however, the key strategic decisions affecting the operation
and its results are not taken by the Group. In the event of a dispute between the Group and the operation which could not be resolved, the operation would
be subject to an orderly wind down. Whilst the voting rights demonstrate significant influence, the Group does not control the operation and therefore the
Board treats the investment as an associate.

[castleford tiger] 06/12/2019 19:43

Pleased I loaded up when I did
Tiger

[cc2014] 02/12/2019 15:32

Share price moved up a bit now and 300 holding for a good number of hours now.

[harrogate] 02/12/2019 09:59

Yes. Shame no one seems to care!

[cc2014] 02/12/2019 09:57

That's a bit of an unexpected surprise since I wasn't aware HSP had bought the minerals lease and properties at Hemerdon.

Looks like they spent about £400k to generate £2.8m

[harrogate] 02/12/2019 07:22

That looks like excellent news. Decent outcome from the Wolf mess and good earnings potential going forward. Would think interim trading update tomorrow as well. My badly timed purchase is looking better and with that large dividend increase on the horizon we could make some progress here.

[cc2014] 19/11/2019 13:42

This is getting a nice wiggle on.

Hardly any sellers coming out at all and the only large ones have got ripped off pretty fast mostly in one trade suggesting there is further pent up demand.

Today 30.3k at 276p
12/11 67.5k at 254p

[castleford tiger] 14/11/2019 08:13

beeks yes I am in pal

tiger

[cc2014] 12/11/2019 09:58

This from the year end results so any reversal of the provisions would be good news. The market seems to think so as we've seen a few trades including a 20k at 250p reported late last night.

I would assume the following:
British Steel has been bought from the receiver, not as a going-concern and therefore with regard to the £4.5m trade debt and WIP they will only get a back a few pence in the pound on the trade debt and maybe a much higher amount on the WIP if they have been clever.

With regard to the £3.5m redundancy and equipment writedowns, I guess given the length of time this has been going on a few many have already been made redundant as I don't suppose the receiver has been placing orders for anything other than what is essential. Perhaps 75% of this provision is no longer required. A guess.

They also get to continue working for the Client which was generating about £1m in profit if my memory serves me correctly.


"In late May 2019, British Steel Limited announced that it was being placed into liquidation. Currently the business is being operated under the aegis of the Official Receiver and the Group is continuing to provide services under similar commercial terms as prior to the insolvency. Until the future of British Steel is clarified, the final financial impact on the Group cannot be fully determined, however, the Board has made a provision of £4.5m against trade debt and work-in-progress balances which are unlikely to be recovered. Additionally, a further expense of £3.5m has been recognised in respect of redundancy and other associated employment costs and equipment write downs, resulting in a total exceptional charge of £8.0m."

[castleford tiger] 11/11/2019 21:43

British steel will this help us going forward?

[muckshifter] 28/9/2019 14:23

Not really taken much notice of those divisions CT. AIUI they have been in serious decline for years, and are not immune to further competition in the future, or a serious downturn in the economy. So the way I see it HSP are trying to build "replacement" businesses, with Specialist Earthworks being unfortunately one of them, and the latest being a concentration on land development.

But as said before I've not looked that carefully at HSP.
Good luck with your investments.

[castleford tiger] 28/9/2019 11:10

thank you

not a single mention of the fuel division or haulage.

That tells me they have no future?

Tiger

[muckshifter] 28/9/2019 10:44

CT, Response to your question over on LPA thread as promised.

My overall view of HSP is that they will have to run hard to stand still for the next few years. I'm not considering buying any despite the future dividend indications, which in themselves look to me like an attempted justification for the share price.

Their emphasis on developing property sites, I would assume is mostly based on old opencast sites. If you take Blindwells as an example, property profits from old OCC sites are likely to be OK but not great, slow to actually be realised and involve a significant cash drain to prepare the site for sale, well in advance of sale cash receipt.

I'm still of the opinion that much of the £9.2m (iirc) "WIP" on legacy CA Blackwell contracts will eventually be written off (unless of course CAB staff follow the company's tradition and buy themselves out for a nominal sum and then miraculously get good settlements!). Also, I would now think HS2 is almost certain to be cancelled, which, imo, doesn't really leave a viable specialist earthworks division as the A14 work looked well on to me this Summer, and heading for the normally much less lucrative finishing works.

And I'm not aware of when their private OCC Sites are programmed to complete, but the reinstatement costs will be another cash drain in due course I expect.

But I must admit I haven't been interested enough in HSP to look at them very carefully - I just read the AR & Interims as they appear, so I'm open to correction!

[castleford tiger] 24/9/2019 12:19

Looking far too cheap

[gfrae] 28/8/2019 16:46

Well I cannot remember when they decided it was probably no longer eligible but it could have been post Nov 18. Of about 20 IHT shares I look at it is the only one they say is ineligible.
Regardless of who is correct,it will or has affect(ed) the share price,which was my original point.

[cc2014] 28/8/2019 10:12

I understand your position. No-one wants to be caught with a tax bill they aren't expecting and being cautiuos has served me well over the years


HMRC do not publish a list of qualifying shares for IHT relief, instead preferred to define some "loose" rules. These "loose" rules extend not only to what shares are included but also I have been astonished to find to the definition of how you interpret the two year rule.

I suggest HMRC like it this way as it enables them to change the goal-posts as and when they want.

I've done considerable research on this and further pay a firm of accountants to deal with my IHT bill (which comes round every 10 years for assets held in Trust)


For about 95% of the shares on AIM it's easy to establish whether they are IHT qualifying or not but for the remaining 5% no-one really knows.

The fact that Investors Champion have determined HSP is not IHT qualifying would concern me greately as to the quality of the information they are providing. I suggest Investors Chamption it is possible haven't done anything but deal with this topic on a very broad brush approach and simply put anything they are unsure about in the reject pile. And given from my posts above HSP is IHT qualifying under the current rules and will continue to be so I wonder how many other companies they've decided aren't IHT qualifying.

I can confirm that in Mar 2019 HMRC agreed to reduce my IHT bill for HSP in relation to HSP shares held as at November 2017. HMRC take forever to get round to doing anything these days.

[gfrae] 28/8/2019 09:36

Investors Champion disagrees with you. Though you may well know be more of an expert on IHT than they are. Not a risk that I am prepared to take though.

[cc2014] 28/8/2019 09:00

From page 6 of HSP 2019 annual report.

"Hargreaves Land’s strategic goal is that of a property developer rather than a long-term owner of investment properties and it will seek to exploit appropriate opportunities whilst restricting the amount of capital to be invested as much as possible"

So, no impact on current IHT relief qualifying status

[cc2014] 20/8/2019 12:34

I took a quick look and assume you've paid £2 to access the research on whether it is qualifying for IHT relief as I can't see any other information.

I'm not sure what it says and I'm not paying £2.

[gfrae] 20/8/2019 12:14

See research by Investors Champion to whom I have no connection, other than use of their research.

[cc2014] 20/8/2019 10:49

A quick search of the web shows that the test for IHT and Property is that in excess of 50% of HSP's revenue would have to be from property to lose it's IHT status (even then the case law is unclear and it may be lower in certain circumstances but let's set that aside)

The accounts for 2018 show revenue of:
Distribution and services £281m
Hargreaves Land £12m

[gfrae] 19/8/2019 09:39

They may be deemed a property company.

[cc2014] 19/8/2019 07:44

Why would they not currently be IHT relief qualifying?

I have some in a Trust and HMRC allowed them as qualifying 2 years ago when I had the last round of tax to pay