Hargreaves Services Share Discussion Threads

[red ninja] 10/11/2020 11:50

Great volatility in the share price here, today someone just paid £2.17, but yesterday you could buy at £2.024. I guess we are seeing the Mello effect today.

[red ninja] 10/11/2020 11:19

I imagine Judith Mackenzie might have been selling the case for HSP on Mello Monday event which has brought in a few buyers today.

Well as more land deals are struck I would expect to see a re-rating especially if they can demonstrate a rise in value to NAV estimates.

I would expect housing/land market to be hit by redundancies and loss of stamp duty cut at some time although if HSP land value estimates are substantially lower than market values maybe it won't affect HSP too much.

[netcurtains] 10/11/2020 08:10

I suspect HSP could be one of the big winners out of this Covid news.

The sale of land for the Edinburgh housing project is now going to be completed earlier and we also know that house prices have been rising rapidly

Whats good about HSP is that it has not so far booooooooomed with the covid story - but it almost certainly will eventually....

[red ninja] 09/11/2020 14:33

House builders/ Construction seems, like much of market, to be bullish today based on Joe Biden victory/ Covid vaccine new. No boost for HSP though.

[red ninja] 09/11/2020 11:34

My impression is that their is a large seller who wants to get £2 or more for their holding as the share price seems to verge towards £2 several times in previous days, but not crash through. Maybe Schroders and/or Artemis are still selling.

HSP seems a polarising share doubtless because of its chequered history.
If you look back at the last 10 years, this share was £10 at one time.

It seems Harwood + Downing for, Artemis + Schroders against
Investors Chronicle (Simon Thomson) for, Investors Champion not so keen

I bought a few more at £2.024 today. At this price IMO there is enough headroom in case of any unexpected impairments, although given last trading update I am not expecting bad news.

[netcurtains] 09/11/2020 07:40

Thanks davidosh that is good news!

[davidosh] 09/11/2020 02:16

Just to mention that Judith Mackenzie of Downing who are one of the key shareholders in Hargreaves will be interviewed by me on MelloMonday tonight. She will also be one of the panelists on the BASH session.

The Mello Monday event starts at 6pm
The full programme is available on the website. In the MelloBASH... The analysts, fund manager and well known investors on the panel will give their honest verdicts on whether four/five companies are a Buy Avoid Sell or Hold at this current juncture in the markets.



All investors welcome and if you use the code MMV5 you will get a half price ticket. Great investor content and entertainment. We had nearly 400 investors attend last month so these are very popular.

[netcurtains] 05/11/2020 07:39

Hargreaves in some ways is a sort of landbank and logistics company.

The growth of internet sales means that "DARK STORES" are the future of shopping.
A Dark Store basically mirrors a normal supermarket but instead of customers shopping a Dark Store has logistics companies picking up the goods and delivering them to the customers.

With Hargreaves large landbank and knowledge of logistics I would say HSP is in a good position to get involved in the whole dynamic growth of dark stores and e-fulfilment.

Example:


Here is the HSP commercial web page:
Here is the HSP retail web page:

[netcurtains] 04/11/2020 09:52

1,600 houses times average price of house (Say) £200,000 = £320,000,000

Obviously they dont get anywhere near that money but it does show you the land is worth a few million (seems fair to me)

[netcurtains] 04/11/2020 09:42

If this virus story gets confirmed next week I suspect a lot of the land sales (Scotland) will start to go thought pretty quick.
The virus story is from a well respected publication and similar stories have been in circulation for a while - all with "early December" - which ties in with end of the lockdown.

From AGM: " Blindwells site near Edinburgh, due to the three month cessation of site based activities in Scotland. The Board expects to be able to announce the completion of the sale of the first parcel of land there in the near future."

How much potential cash is the Blindwells site worth?

[netcurtains] 03/11/2020 15:17

Not sure if vaccine will affect price one way or the other but interesting tweet:
I recommend you read it:
re: vaccine:

[ayl30] 02/11/2020 12:04

Agree, one to tuck away methinks

[red ninja] 02/11/2020 11:51

Bought a few at 201.6 today almost a 50% discount to NAV.
The land valuations are also supposed to be on the low side so there should be a descent profit sometime from here.

[red ninja] 02/11/2020 11:46

HSP has had a chequered history in past years ie impairment for loss for services with British Steel, coal cessation impairment.

Currently some of the land sales have been delayed.

Investor's Champion has a negative view on Hargreaves Services.

Todays Downing Strategic Micro I.T. iterim report view on Hargreaves Services is :-

"Hargreaves Services PLC (Hargreaves) (5.94% of net assets)
Cost: £3.65m. Value as at 29 February 2020, £2.18m

Hargreaves Services is a land a property company, and a specialist haulage business

Update to the investment case

Coal mining operations now ceased. Expected to result in a £30 cash inflow across FY21 and FY22
£25m conditional contract exchanged at Unity Joint Venture for a 32-hectare commercial development
German JV progressing and repatriation of dividends expected to be payable to Hargreaves’ shareholders in FY22 equivalent to 12p per share
Underlying performance in the Distribution and Services division was satisfactory despite a significant decrease in revenue following the expected completion of several large contracts and the delayed full mobilisation of HS2
COVID delayed the completion of the sales of the Blindwells plots
Progress against investment case
In the most recent results, Hargreaves reported net asset value of £130 million versus a market cap of around £65 million. Our intrinsic value estimation is centred around the net asset value, which presents considerable upside, and we continue to believe that this should grow over time as development opportunities add value. The business needs to demonstrate disposals and cash inflows, combined with the stabilisation and return to predictable operating profit of the Distribution and Services division to enjoy a re-rating. The pass through of the German associate dividend combined with the group’s own free cash flow presents a tangible value opportunity at the current price and we would expect this also to drive a re-rating if this is realised.

[netcurtains] 02/11/2020 08:16

This is about the only company I own that has gone down.
Anyone know why?

[castleford tiger] 28/10/2020 15:12

Dragged down with the market.

I am buying again
tiger

[red ninja] 28/10/2020 13:36

Bought a few at £2.02 for the medium/long term.

HSP seems a bit shaky so maybe able to acquire even lower shortly.

[netcurtains] 28/10/2020 08:01

Ayl30: Agreed and to top it all this company is miles off its recent post covid highs - so its post covid cheap...
Using the very basic formula for a netnet stock its 86% of a netnet.
Its nav per share is £3.62
share price about £2.10
Big land/house sales could be happening soon...

[ayl30] 28/10/2020 07:44

Think land sale will be significant

[harrogate] 28/10/2020 07:43

Pretty solid AGM statement. Contract wins and little Covid impact. That dividend is getting nearer and they are cheap for sure but have been since March when they fell 30%. Key question what is catalyst that will get them moving up? Next large land sale ? Actual dividend announcement ?

[muckshifter] 01/10/2020 07:22

Thanks CT, got it.

[thirty fifty twenty] 30/9/2020 20:02

CT - that is very helpful. thank you in advance.

I've not spent the time, as m/s has going through the accounts in detail,
but the impression i have is that there are 'no-brainer' level of assets in this business supporting way above the current share price but that it is not cleanly cut and easily visible - thus requires some leap of faith.

my confidence comes from: meeting BoD last year, chart support, Herald + CT on board

All IMHO, DYOR + BoL
HSP is in my portfolio

[castleford tiger] 30/9/2020 18:12

muckshifter

You are in this game. You understand it.
Tiger