HARGREAVES SERVICES PLC
(the “Group”, the “Company” or “Hargreaves”)
Interim Results for the six months ended 30 November 2024
Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the environmental, infrastructure and property sectors, announces its interim results for the six months ended 30 November 2024, a period which delivered significant double-digit revenue and EBITDA growth, a return to profitability for HRMS, and an increase in interim dividend to 18.5p.
With the Company securing high levels of visibility within Services, the Board expects to exceed revenue expectations by 10% for Services for the year ended 31 May 2025 as well as future years, however technical planning delays at Blindwells will offset this additional margin in the current year resulting in the Board anticipating delivering full year results in line with market expectations.
Key Financial Results
| Unaudited 6 Months Ended 30 Nov 2024 | Unaudited 6 Months Ended 30 Nov 2023 | ||
| Revenue | £125.3m | £110.2m | +13.7% |
| EBITDA* | £14.9m | £12.3m | +21.1% |
| Profit Before Tax (“PBT”) | £5.3m | £2.7m | +96.3% |
| EPS | 12.2p | 5.2p | +134.6% |
| Interim Dividend | 18.5p | 18.0p | +2.8% |
| Cash and Cash Equivalents | £15.7m | £18.7m | -16.0% |
| Leasing Debt | £34.2m | £28.8m | +17.0% |
| Net Asset Value** | £188.9m | £185.1m | +2.1% |
| Net Assets Per Share** | 580p | 567p | +2.3% |
* EBITDA is calculated as Operating Profit after adding back depreciation and amortisation and excludes gains or losses on the sale of fixed assets and investment property.
** Net Asset Value and Net Assets per Share for 30 November 2023 have been adjusted for the pension adjustment of £12.4m for comparability.
Highlights
- Group revenue has increased by £15.1m, or 14% driven by revenue growth within Services, especially in earthmoving activities.
- Net margin within Services maintained at over 7%, growing in line with Revenue.
- Group EBITDA increased by £2.6m, or 21% driven by the strong performance within Services.
- Sale of 11-acre site at Blindwells completed in January 2025 for cash consideration of £9.3m.
- Positive turnaround within HRMS as the joint venture has returned to delivering a profit in the period.
- Interim dividend increased by 3% to 18.5p reflecting the growth in profit and strong forward visibility.
- Investment continued into the Group’s land assets ahead of the realisation in January 2025, resulting in cash in hand at period end of £15.7m (2023: £18.7m).
- Net asset value impacted by accounting for the pension scheme Buy-In which occurred in March 2024 resulting in a £12.4m adjustment.
Outlook
- Services has 90% of revenue secured under contract for the year ending 31 May 2025. Combining this with the additional earthmoving volumes underpins management’s expectation for Services of outperforming market revenue expectations for the current financial year by approximately 10%, leading to an improvement in Services PBT and EBITDA.
- Improved performance in H1 within HRMS provides a solid base for H2 despite the continued slowdown within the German economy.
- First tranche of renewable energy assets currently being marketed, with good levels of interest received, hopeful of sale concluding in 2025.
- Despite the completion of a material sale at Blindwells, another planned sale is likely to be delayed until early in the next financial year due to a delay in securing technical approval for site access. This delay is expected to offset the anticipated gains in Services. As a result, the Board anticipates the Group will perform in line with market expectations for the full year.
Commenting on the interim results, Group Chair, Roger McDowell said: “I am pleased to report another strong set of results for the Group. The 14% revenue growth highlights the ability of Hargreaves to identify and capture opportunity in our areas of strength. We remain committed to our strategy of creating and realising value for our shareholders, as evidenced by the progressive increase in the interim dividend.
“The improved performance from our Services business is expected to continue into future years as a result of pipeline opportunities, that require a highly skilled, experienced workforce and a proven track record of safe delivery. With the first tranche of renewable energy land assets now marketed and cash continuing to return from Germany, we are delivering on our commitments to shareholders.“
CEO video
Please find a link to a video overview relating to the Company’s interim results from the Group’s Chief Executive Officer, Gordon Banham here.
Investor presentation
Gordon Banham, Group Chief Executive, Stephen Craigen, Chief Financial Officer and David Anderson, Group Property Director, will provide a live presentation on the Company’s interim results via the Investor Meet Company platform today at 4:30pm GMT.