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Share Name Share Symbol Market Type Share ISIN Share Description
Hargreaves Services Plc LSE:HSP London Ordinary Share GB00B0MTC970 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  20.00 4.76% 440.00 440.00 453.00 455.00 424.00 424.00 84,635 16:35:20
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Support Services 204.8 14.4 50.8 8.7 142

Hargreaves Services Share Discussion Threads

Showing 2276 to 2300 of 2425 messages
Chat Pages: 97  96  95  94  93  92  91  90  89  88  87  86  Older
DateSubjectAuthorDiscuss
01/3/2021
12:14
I have free access to Shares via a broker. HSP was tipped as a Buy in Shares Mag. (25/2/21), see below:- Hargreaves Services is primed for growth after exiting coal A major shift in the business means now is an excellent time to buy small cap Hargreaves Services (HSP:AIM). The group delivers projects and services in the infrastructure, energy and property services, principally in the UK but also in South East Asia. Its main division, Distribution and Services, provides waste handling and logistics to various sectors together with specialist earthworks for major infrastructure projects. Hargreaves Land develops brownfield sitesfor both residential and commercial construction and works with all the major UK housebuilders. The group also used to own a mining business, producing and selling coal to industrial customers, but in July 2020 it ceased operations and in December it sold all of its specialty coal inventories to its German joint venture HRMS for £24 million. Hargreaves was left with a small inventory of heavy industrial coal, which it will have sold by the end of the current financial year in May, and a 49.9% stake in HRMS but importantly an 86% economic stake. WHAT THE COAL EXIT MEANS Ending coal trading means turnover will be lower by £25 million this year and £30 million next year, but pre-tax earnings will be unaffected as Hargreaves will have lower working capital costs and will take the bulk of the profits generated by HRMS as a ‘share of associates’. Longer-term, HRMS aims to grow to €300 million ofannualized revenue serving the steel, cement and other heavy industrial sectors in Germany and the UK, making Hargreaves’s stake a valuable long-term asset. In the interim, the coal disposal makes the group’s results much less seasonal while the receipt of £24 million makes it debt-free and allows it to negotiate much improved borrowing terms. The core business has just been boosted by a five-year deal with biomass energy producer Drax (DRX) for materials handling, plant operation and maintenance at Selby, starting in April, cementing its position as a key supplier. Work on HS2 had been delayed, but the firm is close to signing a revised four-year contract on a cost-plus basis with the main contractors. Having been bitten in the past, Hargreaves no longer works on a fixed-price basis. Meanwhile the property business is moving at pace with the sale of two plots at its Blindwells development near Edinburgh to house builders Bellway (BWY) and Persimmon (PSN), a first sale at its Unity site in Doncaster and the signing of a new site at Bridlington. As a cherry on top, the firm has reinstated its annual dividend and will pay a 12p per share special dividend from the proceeds of the coal sale later in 2021. [IC]
red ninja
25/2/2021
18:49
castleford tiger, What do you think about Harworth Group. It owns a lot of land like Hargreaves and seems to be very succesfull at developing it.
investor73
25/2/2021
17:58
beeks how could you not find me. please do next time
castleford tiger
25/2/2021
07:59
meijiman, I couldn't understand how the ceo managed to keep his job for years, while he bought further and further into opencast coal, deep mines etc. at a time when all the big opencast contractors were getting out or going bankrupt, deep mines were closing year after year, coal fired power stations were closing one by one, and most expected to close within a few years (and did). It looked to me like an absolute gamble that government policy would change and everyone else would be proved wrong. At various times around 2000, I had talked to just about all the coal handling managers at UK coal fired power stations, some of which were already in the process of closing, and the remainder were expecting to. In the 80s 90s and 00s I had dealings with opencast coal contractors such as Miller, Fairclough Parkinson (Amec), Taylor Woodrow, Wimpey, Kier, Mowlem,Norwest Holst, etc. who were winding down their mining operations, and others such as RJB, Crouch, R&A Young, etc. who went bang. Hargreaves knew, and had dealings with, nearly all the same people at that time I would think, and also set up in the 00s, iirc, big coal import facilities at Immingham or that area, and coal ventures in Poland and Russia. At the time, UK Coal were, year after year, having efficiency drives to try to bring their deep mine costs, and even their opencast costs to some extent, down to world coal price levels, without success. I just couldn't see the logic of pushing more and more into mining coal with a very precarious international long term coal price, while at the same time having what looked a much more logical import facility.
muckshifter
24/2/2021
18:21
'probably sold the coal at a discount' phps but personally I still like the deal, making HSP free of any bank debt (yes, it would be nice/interesting to see the draft accounts for HRMS, incl. for debt etc)
smithie6
24/2/2021
18:16
fair pts Muckshifter a 22 million€ accounting fraud in 2013...I didnt know about that (I think that normally the financial dirs would have to walk the plank for that, not the MD but I think that neither of us are big fans of the MD; the dir. of land div. & the chairman seem good from what I can see)
smithie6
24/2/2021
15:01
Do you think in most companies the ceo would be still in charge after that?....had rather forgotten about it.
meijiman
24/2/2021
14:25
I dont think it so complicated HSP loans....expensive, perhaps because of many different businesses & as you say, various hits in past years, inferring risk, hence higher interest rate. HMRS imo doesn't have those risks or history....& in Germany ...access to money at lower % rate cost of the debt has fallen a lot, very good for HSP
smithie6
24/2/2021
14:08
Afternoon CT, I believe that the figure in 2282 above for HRMS retained earnings, including HSP’s 86%, as of May 20, at £9.35m is reasonably correct, although I’d welcome any accountancy trained posters assessment for comparison. HSP / HRMS clearly have a plan, which I suspect involves HRMS taking on a big asset based loan from German banks, on the coal stocks, to fund: the coal purchase, the promised “pass through” dividend, and perhaps the additional working capital requirement that use of the pulveriser will incur. So, imo, HSP are simply passing debt from one pocket to the other, at an unknown but probably significant cost, for an unrevealed purpose. My best guess is that this action has been effectively driven by the UK banking relationship. Over the last few years there seem to me, from memory, to be quite a few references to renegotiation of bank facilities in RNSs and reports, some of which look to put HSP in a slightly uncomfortable position. Why this is the case, if I’m right, is anybody’s guess. It could be that the banks have become increasingly troubled by the never ending succession of expensive write offs of failed businesses, bad debt provisions, etc, over the last ten years, or it might just be that the banks are becoming nervous about lendings to “dirty” industries because of growing environmental related pressure. Another possibility is that HSP don’t really believe the hype about the German business, hope to sell it soon, are getting whatever cash they can out of it in the meantime, and feel more comfortable with the “non recourse debt” if HRMS did get into trouble (so far, I believe HSP have guaranteed just £5m of HRMS debt), but without access to any detailed accounts for HRMS, who knows?
muckshifter
24/2/2021
13:12
They have gone beyond coal, whilst still retaining an 86% share of the subsidiary they off-loaded to go beyond coal.
cjohn
20/2/2021
17:22
Confusing this, isn’t it? And I wonder how the £3.86m needed for the 12p/share extra dividend passed through from HRMS to HSP shareholders will be financed. My understanding is that there were retained earnings. There is a note somewhere. page3 and 4 annual accounts tiger
castleford tiger
20/2/2021
16:24
Cas - popped in earlier but you looked a bit busy! Got myself a nice bottle of grapefruit gin liqueur and a Mars bar though :)
beeks of arabia
20/2/2021
16:23
"smoke & mirrors" well definitely some accounting stuff to think about On one hand it looks good since it looks like it has been cleverly structured. ---- financing the 12.5p divi from HMRS a fair chunk of money I guess they see no problem in funding it since HSP keeps stating that it will be paid.
smithie6
20/2/2021
16:11
interesting & well done for reading accounts & trying to sort out the numbers your point that 86% of HMRS is HSP, good/fair point 'retained profit', not sure that I see that as a key value, since it can be held in 'intangibles' which, well, its not tangible ! Debt HSP was paying a high price for its bank debt, 2 million/year. a very -ve impact on the annual profit number. HMRS is in German so one assumes they can obtain loans at very cheap rates in Euros (with the ECB providing billions to industry at close to 0% to prop it up) & such a loan can be backed up by the assets of HMRS (incl. its new coal stocks & its pulverising facilities) & phps its EBITDA. removing the debt cost from the HSP accounts increases its annual profit. The lower interest cost will appear in the HMRS accounts but I'm sure that asset equity accounting is used in the HSP accounts for the treatment of the investment in HMRS (because !!, HSP owns less than 50.0% of the votes; interesting ) so the interest cost inside HMRS is effectively/almost not seen in the HSP accounts. Instead the HMRS accounts will state the shareholder nett assets (which is after the interest cost of course) & the HSP accounts will state 86% of that for the value of that asset. With various items of debt I'm not sure how HMRS manages to pay a divi. If I remember correctly a divi can only be paid if the shareholder assets are greater than the amount raised by issuing shares. Maybe only a tiny amount was raised by issuing shares & hence removing that problem/risk, recalling that the cash to fund HMRS was provided as a loan (also providing HSP with the advantage of owning the HMRS assets, while owning <50% of the votes, if there were problems).
smithie6
19/2/2021
17:00
OK Smithie6, I’ll attempt to explain my jaundiced view of the HRMS purchase transaction to you, but bear in mind that I’m not an accountant, just someone who reads annual reports carefully and does his best to understand them – so I may make mistakes. At the time that the coal pulveriser construction was contracted by HRMS, it was budgeted to cost 27.5 million Euros – we have no access to any HRMS accounts to see the final outcome but aiui the contract completion was a few months behind schedule, which as a lifetime contractor makes me expect that the budget may well have been busted, but I’ll ignore that in the absence of figures. This was financed by a 3m Euro loan from HSP, a German bank loan taken by HRMS of 15m Euros (86% HSP) and 9.5 m Euros from retained profits of HRMS (86% HSP). I had a look at that time to see if I could work out the retained profits HRMS held, to see if they would be comfortable after the 9.5m Euros, and I’ve updated the retained profit figure from then using AR numbers to May 20. My updated figure came to approx 20.25m Euros, without any additional funds from depreciation because I don’t think HRMS had almost any depreciable assets before the Coal pulveriser. Deducting the 9.5m Euro funding for the crusher contract leaves 10.75m Euros (86% HSP), say £9.35m in HRMS retained profit. Note that the £24m coal purchase by HRMS was announced in December but payment had not occurred by the interims late in January - the reason, imo, is that HRMS haven’t enough cash. So, what comes next? Perhaps more borrowing by HRMS in Germany to raise the funds, but that would be borrowing by HSP for 86%. That seems to me to mean that HSP are transferring ownership of £24m worth of coal 86% to themselves, paying themselves from funds which are 86% theirs, and taking ownership of 86% of additional German bank loans to the tune of at least 16.7M Euros – very “smoke and mirrors” imo. The alternative is that HSP “declare”; the sale but get paid over a prolongued period during which HRMS sell the coal. That would be more like my understanding of the relationship between the two parties to date, when, as I understand it, HSP declare their portion of HRMS net profit in the Annual Report in the profit and loss statement and then deduct it in the cashflow statement, ie. the cash stays in HRMS. Confusing this, isn’t it? And I wonder how the £3.86m needed for the 12p/share extra dividend passed through from HRMS to HSP shareholders will be financed.
muckshifter
19/2/2021
12:39
Some coverage of HSP here, along with a few other companies: https://assets-us-01.kc-usercontent.com/8c961317-6aee-00a7-e4b6-ae38cd847d2d/7c464a55-56e6-4652-874e-64f7ded32e6f/PE3052_DSM_Investor_Letter_Feb_21.pdf
sphere25
18/2/2021
15:36
muckshifter fair enough how come you didnt like the deal selling the coal ? I thought it was a good/clever move, in one move making HSP free of any nett bank debt, & that was previously a -ve factor for the share imo. & also makes HSP a much cleaner target to receive a bid, for it or just its land division.
smithie6
18/2/2021
15:21
Afternoon Smithie6. The only shares I ever owned in HSP were the approx £1k worth that I bought for the short term early last November, for one of my kids, and they were sold last week. After many years of watching HSP make what I felt were a never ending series of blunders, I’d begun to think that they might just be pulling themselves together, and felt that the short term news flow should be reasonably good. But, after the last few RNSs I wanted out as soon as my target was reached. For long enough I’ve been posting that I didn’t think Blindwells would be the bonanza many expected, but a steady reasonably profitable long term project, and the last few RNSs have vindicated that view, imo. HSP spending to November 20 on Blindwells preparatory work amounts to approximately £22m, with no yardstick to measure that against – ie. have they completed all the most expensive preparatory work within the intended budget, or not, and so far they have received just £4.2m in January from the Bellway completion – no wonder HSP seem to have slowed down work at Blindwells, with the next £2.1m due January 22. The RNS about the coal sale to HRMS was an incredible RNS in my opinion, and if there was such a thing, I’m sure it would win the London Stock Exchange “smoke and mirrors” Oscar of the year, so I was pleased to exit when I did. However, differing opinions are what makes the market, so I wish all posters here the best of luck and a continuation of the rising share price.
muckshifter
18/2/2021
09:40
It shows you these "value" plays when they work they really work.
netcurtains
18/2/2021
09:35
I tend to agree this is just the market catching up with what was a crazy price. I am very happy but as they say let the trend be your friend. tiger
castleford tiger
18/2/2021
09:10
Hasn't it just been a bit slow to get back to where it was a year ago? Since then news has been very good , although land sales delayed. So if we were worth £3 a year ago I would say we should be over £3.50 and we are getting there.
harrogate
18/2/2021
08:40
Muchshifter there might be something happening here, phps worth hanging on your remaining shares, phps the driven share price action imo without news to produce it looks unusual to me phps the German venture has a good outlook (recalling that its predicted turnover is 300million once turnover has built up, 5% nett profit would be 15 million !, in the future not yet, what is actually possible I have no idea)
smithie6
17/2/2021
20:44
Is it to early to fret about inflation. https://www.bbc.co.uk/news/business-56083963 Well I am thinking that land on the balance sheet provides a hedge should inflation take off.
red ninja
15/2/2021
14:48
indeed... sometimes it feels like the mkt is linked to one's sell button, with a 1-5 day random delay timer !! (after you sell, then after a delay the price goes up) (I'm still holding, to give it time to develop (hopefully) & if this starts spitting out a big divi yield every year then it should be worth holding for the yield )
smithie6
15/2/2021
13:44
Well I'm sure we've all done it. However, for me with a £4 NAV and that with land assets at cost price, a forecast dividend of 20p. I am hoping for more.
red ninja
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