REG - Hargreaves Servs PLC - Trading Update and Notice of Preliminary Results

Hargreaves ServicesAnnouncement

06/06/2024 07:00

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RNS Number : 2846R  Hargreaves Services PLC  06 June 2024

 

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
(https://www.londonstockexchange.com/news-article/HSP/retirement-benefit-obligation-buy-in-update/16358839)
).

 

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:

 

 Hargreaves Services                                                www.hsgplc.co.uk (http://www.hsgplc.co.uk)

 Gordon Banham, Chief Executive Officer                             Tel: 0191 373 4485

 Stephen Craigen, Chief Financial Officer

 Walbrook PR (Financial PR & IR)      Tel: 020 7933 8780 or hargreavesservices@walbrookpr.com

 Paul McManus / Charlotte Edgar       Mob: 07980 541 893 / 07884 664 686

 Singer Capital Markets (Nomad and Corporate Broker)                Tel: 020 7496 3000

 Sandy Fraser, Phil Davies, Sam Butcher

 

About Hargreaves Services plc (www.hsgplc.co.uk (http://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.

 

 

 

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