Hargreaves Services confident in full-year performance

Industrial and property service provider Hargreaves Services said in an update on Tuesday that it expected a “strong” set of results for the half-year just ended, with both revenue and profit before tax set to be higher year-on-year.

The AIM-traded firm said improvement occurred in each of its three business segments in the six months ended 30 November, being services, Hargreaves Land and its Germany joint venture, HRMS.

It said the services business experienced growth in revenue and profit, primarily due to an increase in activity on the HS2 contract, which benefited the current period, while underlying contracts also performed well.

“The services business remains resilient to the current economic uncertainty, with over 50 term and framework contracts, most of which contain cost escalator clauses or are ‘cost-plus’ in nature, continuing to provide a reliable profit stream,” the board said in its statement.

Hargreaves Land, meanwhile, completed another sale at Blindwells in the first half, disposing of 4.5 acres to Ogilvie Homes in a deal worth £3.4m.

That, the directors said, demonstrated the long-term recurring revenue generated from the site.

Finally, while trading conditions in Germany had softened since the second half of the prior period, Hargreaves said they remained “strong”, adding that the joint venture was expected to deliver stronger results year-on-year.

“As noted previously, the limited visibility within this business and the current uncertainty within German industrial markets means that the likely outcome for the second half of the year remains less clear.”

As at 30 November, the group had cash and cash equivalents of £18.1m, compared to £13.8m on 31 May 2022.

The company said it also had leasing debt totalling £30.6m, widening from £18.4m at the end of May, which it put down to the additional plant acquired to service the HS2 contract.

“The board remains confident of delivering full-year results in line with market expectations.”

At 1545 GMT, shares in Hargreaves Services were up 0.87% at 348p.

Reporting by Josh White for Sharecast.com.