Hargreaves Services reports strong first half, appoints new COO
By Josh White
Date: Wednesday 29 Jan 2025
(Sharecast News) - Hargreaves Services reported a strong set of interim results for the six months ended 30 November on Tuesday, with significant growth in revenue and EBITDA, alongside a return to profitability for its HRMS joint venture.
The AIM-traded company also announced the appointment of Simon Hicks as its chief operating officer, effective 1 June.
It said revenue for the period rose 14% to £15.1m, driven by expansion in the services division, particularly in earthmoving activities.
Group EBITDA increased 21% to £2.6m, and the net margin within services remained above 7%.
The board said it expected revenue from the services division to exceed market expectations by 10% for the year ending 31 May, although technical delays at the Blindwells property development would offset the impact on overall earnings.
As a result, full-year results were expected to align with market forecasts.
The company noted that it completed the sale of an 11-acre site at Blindwells in January for £9.3m in cash.
However, another planned sale at the site was likely to be delayed due to technical planning issues, pushing the transaction into the next financial year.
Meanwhile, Hargreaves said it was marketing its first tranche of renewable energy assets, with strong interest from potential buyers and a sale anticipated in 2025.
HRMS, the company's joint venture, returned to profitability despite ongoing economic challenges in Germany.
Cash on hand at the end of the period stood at £15.7m, down from £18.7m in the prior year, reflecting continued investment in land assets.
The interim dividend increased 3% to 18.5p per share, supported by improved profitability and strong revenue visibility.
"I am pleased to report another strong set of results for the group," said group chair Roger McDowell.
"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."
McDowell said the improved performance from the company's services business was expected to continue into future years as a result of pipeline opportunities requiring a "highly skilled, experienced workforce" and a 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."
In a leadership transition, Hargreaves announced the appointment of Simon Hicks as chief operating officer and an executive director, succeeding the retiring group property director David Anderson.
Hicks, who had held senior positions in infrastructure and energy firms including Evero Energy, would focus on enhancing value within the services division, the board said.
With 90% of services revenue already secured under contract for the current financial year, Hargreaves said it remained confident in its outlook despite short-term project delays.
"We are delighted to welcome Simon to Hargreaves and look forward to him starting his new role where his early focus will be on unlocking further potential from our services business," Roger McDowell added.
"Simon is joining Hargreaves from a position of strength, with the services business demonstrating consistent robust growth in revenue and profit each year."
McDowell said Hicks would bring "significant relevant market experience" and an "exemplary track record", adding that he would complement the company's workforce.
"His appointment follows an extensive executive search to secure a high-calibre candidate, and we are confident that Simon will prove a valuable addition to the senior leadership team."
At 1012 GMT, shares in Hargreaves Services were up 2.03% at 602p.
Reporting by Josh White for Sharecast.com.
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