Hargreaves Services flags solid first-half growth
By Josh White
Date: Thursday 05 Dec 2024
(Sharecast News) - Hargreaves Services flagged strong growth in first-half revenue and profit before tax in an update on Thursday, in line with full-year expectations.
The AIM-traded company said it anticipated improvements in both its services and Hargreaves Raw Material Services (HRMS) divisions, with stable contributions from Hargreaves Land.
It said it remained confident of meeting full-year market expectations, supported by robust contract performance in services, a rebound in HRMS, and normalised profit levels from land operations.
The services division continued its steady growth, underpinned by a solid portfolio of contracts with blue-chip clients in the UK's infrastructure and energy sectors.
Key ongoing projects included work on HS2, expected to continue for at least two more years, and expanded earthworks activities at the Sizewell C nuclear power station.
The division remained resilient, with most contracts incorporating escalation factors or 'cost-plus' arrangements, insulating it from cost pressures such as increased Employers' National Insurance Contributions announced in the UK Budget.
Hargreaves Land meanwhile progressed with its renewable energy land assets strategy, with encouraging market interest in the first tranche of assets.
Updates on the sales were expected later in the financial year.
HRMS delivered an improved performance, benefiting from the normalisation of commodity prices.
The division had already contributed its planned dividend to the group for the current financial year.
As of 30 November, the group held £15.7m in cash, compared to £18.7m a year earlier, reflecting continued investment in land assets ahead of anticipated realisations in the second half.
Leasing debt stood at £34.6m, up from £28.8m, with the group remaining free of bank debt.
Hargreaves Services said it would release its interim results on 29 January, with further details about investor and analyst meetings to follow.
Full-year expectations for the group currently included revenue of £222.6m, underlying profit before tax of £16.5m, and underlying earnings per share of 42.5p.
At 1121 GMT, shares in Hargreaves Services were down 0.27% at 552.52p.
Reporting by Josh White for Sharecast.com.
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