Hargreaves Services plc
("Hargreaves" or the "Group")
Pre-Close Trading Update and
Notification of Preliminary Results
Hargreaves Services plc (AIM:
HSP), a diversified group delivering services to the industrial and
property sectors, is pleased to provide the following update on
trading ahead of reporting its preliminary results for the year
ended 31 May 2024 in which the Board expects to report Profit
before Tax ("PBT") marginally ahead of market
expectations*.
The Services business unit continued
to perform well throughout the second half of the year, building on
a strong first half. The Board anticipates reporting a year-on-year
growth in divisional PBT after adjusting for the £3.2m one off gain
recorded in the prior year. This growth has been driven by
activities from the Earthmoving and Environmental operations within
the Services business.
Hargreaves Land also had a strong
second half with notable deal completions including a residential
site at Maltby and the land occupied by an 'Energy from Waste'
plant at Westfield. As a result, the Board expects the business
unit to report a record PBT for the year, marginally higher than
previously anticipated, driven by the early completion of a number
of option fees for renewable energy ground leases. Despite this
increase in PBT, headline Revenue in Hargreaves Land is anticipated
to be lower than expectations due to a greater proportion of
profits deriving from sales of Investment Properties. The business
unit remains well positioned to bring the first tranche of
renewable energy land assets to market in the financial year ending
31 May 2025.
As previously reported, the Group's
German Joint Venture, Hargreaves Raw Materials Services GmbH
("HRMS") had a difficult first half of the year. The Board expects
to report a substantial improvement in performance in the second
half in line with expectations. This improvement has been due, in
part, to seasonality with the annual plant maintenance period
occurring in the first half. In addition, trading volumes have
improved, and the recycling operation has started to see increased
gate fees and pig iron pricing, which is expected to continue into
the new financial year.
On 31 May 2024 the Group held cash
reserves of £22.7m (2023: £21.9m). During the year the Group paid
£7.7m relating to the buy-in of the pension scheme (including a
loan of £4.0m), this investment has offset the cash generation
within the Group. Details of this transaction were announced on 4
March 2024 (see
here).
The only debt held by the Group,
excluding debt within its Joint Ventures, relates to leasing debt
for specific operating plant. The total value of this debt at the
year-end was approximately £28.6m (2023: £36.4m). The decrease
reflects net repayments of leasing debt over the course of the
financial year.
Notification of Preliminary Results
The Board expects to report its
preliminary results for the year ended 31 May 2024 on Wednesday 31
July 2024. Details of the analyst meeting and investor meeting to
accompany the results, via the Investor Meet Company platform, will
be provided in due course.
* Market expectations for FY24
revenue and PBT are £219.0m and £16.1m respectively.
For
further details:
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Hargreaves Services
Gordon Banham, Chief Executive
Officer
Stephen Craigen, Chief Financial
Officer
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www.hsgplc.co.uk
Tel: 0191
373 4485
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Walbrook PR (Financial PR & IR)
Paul McManus / Charlotte
Edgar
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Tel: 020
7933 8780 or
hargreavesservices@walbrookpr.com
Mob: 07980
541 893 / 07884 664 686
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Singer Capital Markets (Nomad and Corporate
Broker)
Sandy Fraser, Phil Davies, Sam
Butcher
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Tel: 020
7496 3000
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About Hargreaves Services plc (www.hsgplc.co.uk)
Hargreaves Services plc is a
diversified group delivering services to the industrial and
property sectors, supporting key industries within the UK and South
East Asia. The Company's three business segments are Services,
Hargreaves Land and an investment in a German joint venture,
Hargreaves Raw Materials Services GmbH ("HRMS"). Services provides
critical support to many core industries including Energy,
Environmental, UK Infrastructure and certain manufacturing
industries through the provision of materials handling, mechanical
and electrical contracting services, logistics and major
earthworks. Hargreaves Land is focused on the sustainable
development of brownfield sites for both residential and commercial
purposes. HRMS trades in specialist commodity markets and owns DK
Recycling, a specialist recycler of steel waste material.
Hargreaves is headquartered in County Durham and has operational
centres across the UK, as well as in Hong Kong and a joint venture
in Duisburg, Germany.