Hargreaves Services plc AGM Statement

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, will hold its Annual General Meeting (“AGM”) today at 11am. Ahead of the meeting, the Group’s Chair, Roger McDowell, has issued the following statement:

“Having resumed the Chair, I am pleased to confirm that all three business sectors, Services, Hargreaves Land and HRMS, are trading in line with the Board’s expectations.

The Services business has had a strong start to the year, demonstrating the recurrent and reliable nature of our operations in this area. The Group has over 60 term and framework contracts with blue chip clients providing excellent revenue visibility. Regarding the recent announcement by the Prime Minister to cancel the northern section of HS2, I can confirm that this has no impact on our UK Services business. The Group’s existing contract on HS2 Phase 1 (London to Birmingham) is performing in line with our plan and is expected to generate revenue for the Group for the next two years at least. No revenue was built into our forecasts in respect of HS2 Phase 2 as the timing and certainty of the northern section (Birmingham to Manchester) had been unclear for some time. The business remains focused on securing works at other major earthmoving sites as well as continuing to grow our portfolio of term and framework contracts.

Hargreaves Land remains focused on realising value from its portfolio of renewable energy land assets, with the first four months of the year seeing continued developments in this sector. The business unit remains well placed to deliver its full year results with a previously announced contracted sale of 20 acres of serviced residential land which is expected to complete in January 2024 for a total consideration of £18.5m payable in four instalments over three years.

As expected, the slowdown in trading activity and softening of commodity prices observed in the second half of last financial year has continued into the first half of the current year. This has meant that results within HRMS are expected to be lower in the first half of the financial year compared to the equivalent period in the previous year.

The project to buy out the Group’s defined benefit pension scheme is progressing well and I expect to be able to announce that the liability has been bought out within calendar year 2024.

The Group held £16m of cash at 30 September 2023 and had outstanding leasing debt of £31m at that date. The balance sheet remains free from all bank debt and third party security.

The Board remains confident in delivering full year results in line with market expectations.”

A brief presentation will be delivered at the AGM by CEO Gordon Banham, no new information will be disclosed and a copy of the presentation will be made available on the Company’s website later today –

The Board expects to provide a further trading update in early December 2023 prior to the announcement of the Group’s interim results for the six months ending 30 November 2023 on Wednesday 31 January 2024.

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