HARGREAVES SERVICES PLC
(the “Group”, the “Company” or “Hargreaves”)
Interim Results for the six months ended 30 November 2023
Strong period for Services with revenue and margin improvements; Interim dividend increased six-fold.
Hargreaves Services plc (AIM: HSP), a diversified group delivering key projects and services to the industrial and property sectors, announces its interim results for the six months ended 30 November 2023.
As anticipated the slowdown in performance within HRMS, combined with the progress on the pension buy out, has facilitated a material increase in the interim dividend in both absolute and percentage terms, whilst the Services business, with over 60 term and framework contracts, has delivered another period of solid underlying growth.
| KEY FINANCIAL RESULTS | UnauditedSix Months ended30 Nov 2023 | UnauditedSix Months ended30 Nov 2022 | |
| Revenue | £110.2m | £116.5m | |
| EBITDA* | £12.3m | £12.9m | |
| Profit before tax (“PBT”)** | £2.7m | £18.7m | |
| EPS | 5.2p | 52.2p | |
| Interim Dividend | 18.0p | 3.0p | |
| Cash and cash equivalents | £18.7m | £18.1m | |
| Leasing debt | £28.8m | £30.6m | |
| Net Asset Value | £197.5m | £196.2m | |
| Net Assets per Share | 605p | 603p |
* EBITDA is calculated as Operating Profit after adding back depreciation and amortisation.
** PBT decrease reflects the reduction in contribution from HRMS, timing of sales in Land and impact of a one off gain in the prior period
HIGHLIGHTS
| • | Group revenue reduced by £6.3m due to several post period end completions within Hargreaves Land. |
| • | Services revenue rose by 1.6%, supported by over 60 term and framework contracts. |
| • | Decrease in PBT due to reduction in contribution from HRMS and timing of sales completions within Hargreaves Land. |
| • | Receipt of £8m cash from investment in HRMS in the period, with cash returns from HRMS now expected to remain around £7m per annum (up from £4m). |
| • | Cash of £18.7m, compared to £18.1m at Nov 2022 with investment in Land assets being offset by additional cash receipt from HRMS. |
| • | Interim dividend increased six-fold following an increase in cash receipts from HRMS and imminent elimination of annual payments to service the pension scheme liability. |
OUTLOOK
| • | Services has over 90% of revenues secured under contract for the year ending 31 May 2024, cementing its continued delivery of sustainable and reliable profits into the future. |
| • | Stronger outlook for HRMS with changes to gate fees and the impact of EU sanctions on pig iron expected to give a significant improvement to profitability in the second half and FY25. |
| • | Land poised to deliver its best ever full year result with several post-period end completions secured. |
Commenting on the interim results, Group Chair Roger McDowell said: “I am delighted we continue to deliver value for our shareholders through a substantial increase in the interim dividend. This demonstrates not only the value created by the strategic initiative set out at the year end to remove the pension liability but also the recurring revenue stream generated by the Group’s Services business unit underpinned by the substantial cash returns from our German joint venture and good prospects for Land.
“We are optimistic about the outlook for the business in the second half as Services continues to provide a robust underpinning to trading with over 90% of revenue already secured for the financial year. We anticipate positive pricing in Germany in the second half and Land is poised to deliver its best ever full year performance.”
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.
For further details:
| Hargreaves ServicesGordon Banham, Chief Executive OfficerStephen Craigen, Chief Financial Officer | www.hsgplc.co.ukTel: 0191 373 4485 | ||
| Walbrook PR (Financial PR & IR)Paul McManus, Louis Ashe-Jepson,Charlotte Edgar | Tel: 020 7933 8780 or hargreavesservices@walbrookpr.comMob: 07980 541 893 / 07747 515 39307884 664 686 | ||
| Singer Capital Markets (Nomad and Corporate Broker)Sandy Fraser, Phil Davies, Sam Butcher | Tel: 020 7496 3000 | ||