Hargreaves Services plc
(“Hargreaves”, the “Company”, or the “Group”)
Results for the year ended 31 May 2024
Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, announces its results for the year ended 31 May 2024.
Financial results
The Group has seen strong performances across its Services and Hargreaves Land divisions and reduced profitability within German Joint Venture, HRMS. Hargreaves Land delivered a record profit before tax following several notable transactions. HRMS also delivered an increased cash receipt, double that of the prior financial year. With a high level of secured revenue in Services, clear visibility of transactions in Land and signs of market recovery at HRMS there are many reasons to feel positive about the coming year. The Group maintains a strong, debt-free balance sheet and a clear focus on realising and delivering value to our shareholders.
KEY FINANCIAL RESULTS
| Year ended 31 May 2024 | 2024 | 2023 | |
| Revenue | £211.1m | £211.5m | |
| EBITDA* | £26.1m | £21.8m | |
| Underlying Profit Before Tax (“UPBT”)* | £16.9m | £27.3m | |
| Share of profit from HRMS (net of tax) | £1.3m | £15.5m | |
| Profit Before Tax | £16.7m | £27.2m | |
| Basic underlying EPS* | 38.2p | 86.3p | |
| Basic EPS | 37.8p | 85.9p | |
| Proposed Final Dividend | 18.0p | 6.0p | |
| Additional Dividend from HRMSCash and cash equivalents | –£22.7m | 12.0p£21.9m | |
| Net Assets | £192.1m | £201.0m | |
| Net Assets per Share* | 586p | 618p |
HIGHLIGHTS
· UPBT at £16.9m (2023: £27.3m), with a decrease due to expected reduction in profitability in HRMS, somewhat offset by growth in Hargreaves Land
· EBITDA increased 19.7% to £26.1m (2023: £21.8m) due to improved profitability of the Services business
· Record profit for Hargreaves Land with UPBT increasing 110.3% to £8.2m (2023: £3.9m)
· Increased cash receipt from HRMS of £7.8m (2023: £4.0m)
· Services business holds a strong contract portfolio, growing to over 65 term and framework contracts following several new contract wins, providing visibility of 70% of next year’s expected revenue
· The buy-in of the pension scheme completed in March 2024 for a cash consideration of £3.7m
* The basis of Underlying profit before tax, EBITDA, Net Assets per Share and basic underlying EPS is set out in Note 5. The calculation of Net Assets per Share includes the renewable energy land assets at cost.
Commenting on the preliminary results, Group Chair Roger McDowell said: “The Group remains focused on its core objective to create, realise and deliver value for our shareholders. Despite the challenges faced by HRMS, the improvement in the second half of the year provides confidence that we will see an increased contribution in the current financial year. We also expect to bring to market the first tranche of renewable energy land assets, marking the beginning of substantial realisation events within that business. Additionally, the Services business continues to perform strongly, with over 70% of revenue already secured and further opportunities emerging within the power, water and infrastructure sectors. The Balance Sheet remains free from bank debt and no longer requires pension deficit contributions, providing a strong and stable platform from which to deliver substantial value to shareholders in the coming years.”
Analyst briefing
A briefing open to analysts will take place on Tuesday 6 August 2024 at 10.00 am BST. To register and for more details please contact Walbrook PR on hargreavesservices@walbrookpr.com.
Investor presentation
Gordon Banham, Group Chief Executive, David Anderson, Group Property Director and Stephen Craigen, Chief Financial Officer, will provide a live presentation on the Company’s preliminary results via the Investor Meet Company platform on Wednesday 7 August 2024 at 4.00 pm BST.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9.00 am the day before the meeting or at any time during the live presentation.
Investors can sign up to Investor Meet Company for free here.