REG - Hargreaves Servs PLC - Preliminary Results for the year ended 31 May '25
Wed 07:02
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250730:nRSd0788Ta&default-theme=true
RNS Number : 0788T Hargreaves Services PLC 30 July 2025
Hargreaves Services plc
("Hargreaves", the "Company", or the "Group")
Preliminary Results for the year ended 31 May 2025
Hargreaves Services plc (AIM: HSP), a diversified group delivering services to
the industrial and property sectors, announces its preliminary results for the
year ended 31 May 2025, a year which delivered significant double-digit
revenue and EBITDA growth, a return to profitability for HRMS, and an increase
in the proposed final dividend to 18.5p.
The Group has delivered a strong performance in Services and experienced a
significant improvement in the HRMS joint venture. Despite the decrease in
profits reported in Hargreaves Land, largely as a result of an exceptionally
strong prior year, revenue increased following higher sales activity within
the Group's largest project, Blindwells. With a strong order book in Services
and promising long-term opportunities ahead, the Group is well-positioned to
sustain its positive momentum. Backed by a robust, debt-free balance sheet
and a clear focus on realising and delivering value to shareholders, the Group
remains in a strong strategic position.
KEY FINANCIAL RESULTS
Year ended 31 May 2025 2025 2024
Revenue £264.4m £211.1m +25.2%
EBITDA* £33.7m £26.1m +29.1%
Underlying Profit Before Tax ("UPBT")* £17.6m £16.9m +4.1%
Share of profit from HRMS (net of tax) £4.1m £1.3m +215.4%
Profit Before Tax £17.5m £16.7m +4.8%
Basic underlying EPS* 45.2p 38.2p +18.3%
Basic EPS 44.8p 37.8p +18.5%
Proposed Final Dividend 18.5p 18.0p +2.8%
Cash and cash equivalents £23.3m £22.7m +2.6%
Net Assets £194.2m £192.1m +1.1%
HIGHLIGHTS
· UPBT up 4.1% to £17.6m (2024: £16.9m), with an increase following
growth in services and improvement in profitability in HRMS, somewhat offset
by a reduction in profit in Hargreaves Land
· EBITDA increased 29.1% to £33.7m (2024: £26.1m) due to improved
profitability of the Services business
· Cash receipt from HRMS of £6.3m (2024: £7.8m)
· Services business holds a strong contract portfolio, growing to over
70 term and framework contracts following several new contract wins, providing
visibility of 70% of next year's expected revenue
· Proposed final dividend of 18.5p (2024: 18.0p) taking the full year
dividend to 37.0p (2024: 36.0p), representing an increase of 2.8%
* The basis of Underlying profit before tax, EBITDA and basic underlying EPS
is set out in Note 5.
Commenting on the preliminary results, Group Chair Roger McDowell said: "I am
pleased to be able to report another strong set of results for the Group with
substantial growth in both revenue and profits. Whilst Services has been a
standout performer in terms of growth, this year has also seen a significant
improvement in the performance of HRMS. The completions at Blindwells continue
to demonstrate the value within the portfolio.
"Looking ahead, Hargreaves Services is well-positioned to capitalise on its
strong pipeline of opportunities within the infrastructure sector. The
Services business has already secured over 70% of its budgeted revenue for the
upcoming year, showcasing its resilience and strength in key areas such as
clean energy, water, and infrastructure projects. With further prospects
emerging in these sectors, the Group continues to demonstrate its capacity to
adapt and thrive amidst evolving market conditions, ensuring sustainable
growth and delivering continued value to shareholders."
Analyst briefing
A briefing open to analysts will take place today, Wednesday 30 July 2025 at
9:30 am BST. To register and for more details please contact Walbrook PR on
hargreavesservices@walbrookpr.com (mailto:hargreavesservices@walbrookpr.com) .
Investor presentation
Gordon Banham, Group Chief Executive, Simon Hicks, Chief Operating Officer and
Stephen Craigen, Chief Financial Officer, will provide a live presentation on
the Company's preliminary results via the Investor Meet Company platform
today, Wednesday 30 July 2025, at 4.30 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
(https://www.investormeetcompany.com/hargreaves-services-plc/register-investor)
.
For further details:
Hargreaves Services www.hsgplc.co.uk (http://www.hsgplc.co.uk)
Gordon Banham, Chief Executive Tel: 0191 373 4485
Stephen Craigen, Chief Financial Officer
Simon Hicks, Chief Operating Officer
Walbrook PR (Financial PR & IR) Tel: 020 7933 8780 or hargreavesservices@walbrookpr.com
(mailto:hargreavesservices@walbrookpr.com)
Paul McManus, Lianne Applegarth,
Mob: 07980 541 893 / 07584 391 303
Joe Walker
07407 020 470
Singer Capital Markets (Nomad and Corporate Broker) Tel: 020 7496 3000
Phil Davies / Sam Butcher / Sara Hale
Cavendish Capital Markets Ltd (Joint Corporate Broker) Tel: 020 7220 0500
Katy Birkin / Hamish Waller - Corporate Finance
Jasper Berry / Tim Redfern - Sales / ECM
About Hargreaves Services plc (www.hsgplc.co.uk (http://www.hsgplc.co.uk) )
Hargreaves Services plc is a diversified group delivering services to the
environmental, infrastructure 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 Connectivity, Clean Energy,
Environmental and Infrastructure 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 und Roheisen GmbH ("DK"), 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.
Chair's Statement
Roger McDowell, Group Chair
Introduction
I am pleased to be able to report another strong set of results for the Group
with substantial growth in both revenue and profits. Whilst Services has been
a standout performer in terms of growth, this year has also seen a significant
improvement in the performance of HRMS. The profit from Hargreaves Land has
been lower than the prior period although it should be noted that was off the
back of a record year in 2024.
We remain steadfast in our commitment to delivering value to shareholders
through the following well established strategic targets:
· Services - Securing and retaining high quality, robust term service
and framework contract positions in areas of core competence within the
infrastructure supply chain.
· Hargreaves Land - Transitioning to a capital-light model through the
managed realisation of the Blindwells site near Edinburgh and the Groups
renewable energy land assets.
· HRMS - Focused on cash realisation by an annual return to the Group,
whilst exploring longer term realisation potential.
Results and Progress update
Group revenue has increased by 25.2% to £264.4m (2024: £211.1m) due to a
substantial increase in earthmoving activities on major infrastructure
projects. This has resulted in a 4.1% increase in Underlying Profit Before Tax
("UPBT")* to £17.6m (2024: £16.9m). This growth in UPBT, driven by Services
and HRMS, has been somewhat softened by a return to lower profit levels within
Hargreaves Land following a record prior year.
Earnings Before Interest Tax Depreciation and Amortisation ("EBITDA")* for the
Group has improved significantly to £33.7m (2024: £26.1m) reflecting the
strong cash generation within the business. Basic earnings per share increased
to 44.8p (2024: 37.8p) reflecting the improved profitability of the Group.
Services delivery and outlook
This year has seen substantial progress in securing additional opportunities
as the business has capitalised on the momentum it has built over the last few
years. We continue to support some of the most high-profile infrastructure
works in the UK, such as HS2 and Sizewell C Nuclear Station, where our
presence continues to grow. Additionally, we have been successful in growing
our presence within the UK water and energy sector with recent partnerships
signed up with Yorkshire Water, Northumbria Water and M Group.
The business holds a contract book of over 70 term and framework contracts,
which provide excellent revenue and margin visibility for the coming years. It
is this visibility that has allowed us to raise our expectations for this
business in our most recent trading update, for the second time in the last
twelve months.
Land realisations
Hargreaves Land has made progress at Blindwells with two plot sales completing
in the year generating proceeds of £13.8m. Much of this has needed to be
reinvested to support the ultimate unwind of the site, it is a strong reminder
of the desirability of the site and an indication that markets are beginning
to open up again. The Group's near-term renewable energy land assets have
again been independently valued at between £27m and £29m (2024: £27m-£29m)
based on a Market Value at Commissioning of Development**, it remains the
objective of the Group to realise these assets in an orderly fashion.
HRMS performance
The result from HRMS has been significantly improved as many of the
initiatives around solid fuel pricing and renegotiated gate fees have taken
effect within the steel waste recycling operation. Furthermore, trading
activity has remained stable despite the challenging German marketplace. The
Group received £6.3m in cash from the joint venture during the year.
Board changes
We are pleased to welcome Simon Hicks as our new Chief Operating Officer,
bringing a wealth of experience and expertise to further strengthen our
leadership team. His appointment on 1 June 2025 marks the start of an exciting
new chapter for our Group as we continue to drive growth and innovation across
our diverse sectors. At the same time, we extend our deepest gratitude to
David Anderson, who stepped down on 31 May 2025, for his outstanding service
and dedication during his tenure. David's contribution has been instrumental
in shaping the success and resilience of Hargreaves Land, and we wish him the
very best in his future endeavours.
Cash and leasing debt
On 31 May 2025 the Group held cash of £23.3m (2024: £22.7m). The business is
cash generative, predominantly through the activities in Services and the
receipt of HRMS dividends. The Group's debt relates solely to leasing debt and
hire purchase arrangements for the acquisition of fixed assets. At the year
end the balance of the debt was £32.8m (2024: £34.2m), the reduction
reflects the net effect of new leases entered into during the year, leases
terminated early and lease repayments.
Dividend
The Group paid an interim dividend of 18.5p (2024: 18.0p) in April 2025,
reflecting the Group's stated aim of delivering a progressive dividend for
shareholders.
The business has continued to trade well in the second half of the year and
the Board is recommending a final dividend of 18.5p (2024: 18.0p) taking the
full year dividend to 37.0p (2024: 36.0p), representing an increase of 2.8%.
If approved at the Annual General Meeting, the final dividend of 18.5p will be
paid on 3 November 2025 to all shareholders on the register at the close of
business on 26 September 2025. The shares will become ex-dividend on 25
September 2025.
Environmental, Social and Governance ("ESG")
The Group has continued its momentum and advanced its strategy in relation to
ESG. Key highlights for the year include the achievement of PAS 2080
accreditation, demonstrating our commitment to carbon reduction within our
Earthworks operations. Secondly the Group achieved a Gold rating from the
Supply Chain Sustainability School, advancing from a Silver rating. The Group
aims to identify new ways to add value to our services provided through
increasingly sustainability-focused operations that benefit all stakeholders.
Outlook
Looking ahead, Hargreaves Services is well-positioned to capitalise on its
strong pipeline of opportunities within the infrastructure sector. The
Services business has already secured over 70% of its budgeted revenue for the
upcoming year, showcasing its resilience and strength in key areas such as
clean energy, water, and infrastructure projects. With further prospects
emerging in these sectors, the Group continues to demonstrate its capacity to
adapt and thrive amidst evolving market conditions, ensuring sustainable
growth and delivering continued value to shareholders. Despite challenges
faced by HRMS, the notable improvement in the second half of the year, gives
us confidence in an improved contribution for the current financial year. We
plan to continue the realisation of value from our renewable energy land
assets.
The Group maintains a robust, debt free balance sheet, providing a solid
foundation for growth, whilst giving optionality as we look to realise value
through targeted asset disposals over the coming years.
The Group's ongoing success is thanks to the expertise, commitment, and
dedication of everyone at Hargreaves. I extend my sincere gratitude to all my
colleagues.
Roger McDowell
Group Chair
30 July 2025
* The basis of Underlying Profit Before Tax and EBITDA are set out in Note 5.
** Market Value at Commissioning of Development - represents the price at
which the portfolio would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and both having
reasonable knowledge of the relevant facts.
Chief Executive's Review
Gordon Banham, Group Chief Executive
CHIEF EXECUTIVE'S REVIEW
£'m Services Hargreaves Land HRMS Unallocated Total
Revenue (2025) 244.3 20.1 - - 264.4
Revenue (2024) 204.1 7.0 - - 211.1
Underlying Profit/(Loss) before Tax* (2025) 15.9 2.3 4.1 (4.7) 17.6
Underlying Profit/(Loss) before Tax* (2024) 11.4 8.2 1.3 (4.0) 16.9
* The basis of Underlying Profit Before Tax is set out in Note 5.
Services
The Group has delivered a strong performance within the Services business,
reporting a fourth consecutive year of growth with a compound annual growth
rate of 32.9% in UPBT since 2021. Revenue increased to £244.3m, an
improvement of 19.7% against the comparative period (2024: £204.1m). This
growth has been driven by an increase in earthmoving activity on major
infrastructure projects as well as growth in Hong Kong and Logistics
operations. The HS2 contract remains the largest individual contract within
the Group with revenue of £54.9m (2024: £48.3m) representing 22.5% of total
Services revenue (2024: 23.7%).
Services delivered an UPBT of £15.9m compared to £11.4m in 2024, a growth of
39.5%. Whilst much of this improved result is due to additional volume, as
evidenced by the increased revenue, the underlying net margin has also
increased to 6.5% (2024: 5.6%). This improved margin demonstrates the
continued focus on high quality contracts in areas where the Group's core
competencies and high standards are valued.
Growing pipeline
The Services business, with a new point of leadership under Simon Hicks,
remains focused on identifying, securing, delivering and retaining robust term
and framework contracts to high quality counterparties in our areas of
expertise. The year ended 31 May 2025 has been another successful period in
adding quality to our pipeline.
This included a new contract with energy recovery group Enfinium providing day
to day operations at the Skelton Grange energy recovery facility. Furthermore,
we have secured a position with Thalia Waste Management providing maintenance
and outage support services for the Milton Keynes station. Both contracts are
with new clients to the Group, demonstrating the ability of the Group to take
existing expertise into new environments.
In addition to the term and framework positions, the Group has seen success in
smaller scale engineering works in the water and infrastructure sector with
projects secured for M Group and Cemex delivering results in the year.
Whilst we are committed to pursuing new opportunities, it is important that we
deliver a high-quality service which is valued by our clients. This is
evidenced by our propensity to hold long term relationships with our
customers, in the current year alone we have renewed long term agreements with
the likes of Phillips 66, CF Fertilisers, Suez, FCC Environment and Peel NRE.
Taking a longer-term view, the recent Government announcements and positive
statements regarding UK infrastructure spending provide opportunity for growth
for the Services business. Lower Thames Crossing, the reservoir building
programme and the plans for Heathrow and Luton airports are exciting long-term
prospects for the Group.
The Services Group holds an increasingly strong contract portfolio which has
grown to over 70 term and framework contracts, many of which contain
escalation clauses to insulate the Group from inflationary pressures,
providing the business with visibility of over 70% of budgeted revenue heading
into the new financial year. This provides a stable base from which to explore
further growth opportunities.
We note the recent announcement from Tungsten West plc ("TW") regarding the
revised development plan to recommence mining at the tungsten mine in
Hemerdon, Devon. The Group remains party to an exclusive long-term Mining
Services Contract with TW, which will commence should the project move to
production. A further £1.0m instalment was received in June 2025, leaving a
further £3.0m to be received over the next three years.
Hargreaves Land
Hargreaves Land has delivered an UPBT of £2.3m (2024: £8.2m) reflecting a
number of successful completions at Blindwells. The prior year included
material asset disposals at Westfield and Maltby raising combined proceeds of
£12.5m and contributed to a record profit for the business unit.
Revenue for Hargreaves Land of £20.1m (2024: £7.0m) is substantially higher
than the prior year due to the increase in sales activity within Blindwells,
which is the Group's largest project. This is combined with the fact that
prior year disposals were of investment properties, which did not count to the
prior year revenue figure.
Pleasingly, we have seen more movement at Blindwells with two material sales
completing in the period. Firstly, we completed the sale of a 10-acre plot to
Avant Homes for proceeds of £9.25m, which were received in the year. Linked
to this sale, there is a further 10-acre plot contracted for unconditional
completion with Avant Homes for proceeds of £9.25m, due for completion in
early 2026 calendar year. Further to this, the business also completed the
sale of a 7-acre plot for Places for People delivering proceeds of £4.55m.
The Blindwells project continues to deliver a long-term regular profit stream
for Hargreaves Land, the site is now home to over 350 families and has
approximately 80 acres remaining to sell in Phase 1. Once Phase 1 is completed
there is a second phase of over 135 acres for which a further planning
allocation for up to an additional 1,500 homes is being progressed. Progress
continues at the Group's other multi-phase development sites, including Unity
where contracts have been exchanged for the sale of two roadside development
plots to McDonalds and Starbucks for consideration of £1.2m.
Momentum within the housing market is growing, particularly at a strategic
land level, but full recovery remains hampered by persistently high build
costs and above average interest rates, which have limited the demand side of
the equation. Supply side pressures remain and several Local Authorities,
including the Scottish Government have declared 'Housing Emergencies' as they
seek to tackle a lack of supply. The downward trajectory of lending rates over
the last 12 months could bring some well needed liquidity back to the markets.
Retail and commercial demand, particularly from occupiers, remains cautious as
economic uncertainties are limiting confidence and expansion planning. Quality
locations across all sectors are more resilient to these challenges and we
remain focused on prime opportunities when they present themselves. Investors
are still adjusting to above average interest rates which have caused a reset
in property valuations in general. Yields for commercial stock are now
stabilising and further reductions in the base rate could promote more
confidence over the next 12 months.
Pipeline
The pipeline of schemes within Hargreaves Land represents a key indicator of
the ability of the Group to deliver value in the long-term as the business
moves to a capital light model. The team have continued their success in
signing up high-quality projects with several new schemes secured in the
financial year just ended. Presently the pipeline consists of 24 schemes with
over 10,000 residential plots at various stages through the planning and
development cycle.
Pipeline Summary Number of sites Residential plots Acres
Residential (planning allocated) 4 5,043 698
Residential 2 2,100 179
(pre-allocation)
Residential (planning promotion) 18 3,184 450
24 10,327 1,327
Renewable energy land assets
The renewable energy land asset portfolio remains a key source of value
creation for the Group in the coming years. The portfolio consists of 11
schemes on land owned by the Group. These schemes are a mixture of wind farms,
battery energy storage and solar farms with a combined generation capacity of
1,148 MW. These assets have been independently valued by Jones Lang Lasalle at
between £27.1m and £29.2m (2024: £27.0m - £28.8m), which reconfirmed the
value inherent in these assets. The Group remains committed to realising the
value from these assets through disposal, with the first tranche brought to
market in the financial year just ended.
In addition to the well-established schemes, the Group has line of sight on a
further six longer-term opportunities which are not currently included within
the independent valuation with a total output of 861 MW.
HRMS
The Group's share of post-tax profits from HRMS was £4.1m (2024: £1.3m),
representing a significant turnaround in performance compared to the previous
financial year.
The trading side of the joint venture has continued to perform well and has
navigated the recent German economic recession admirably, maintaining good
volumes and solid margins. The recent announcements from the USA regarding
tariffs have had no real impact on the trading business. The business has
traded volumes of 755kt compared to 746kt in the prior year delivering a local
PBT of £10.2m (2024: £10.0m).
The real driver for the improvement in the performance of the joint venture is
the steel waste recycling facility at DK. The operation takes in approximately
500kt of waste dust from the steel industry and produces pig iron and zinc for
sale. The business made a substantial loss of £7.4m in the prior year as it
was impacted by low pig iron and zinc pricing as well as high coke costs (a
key input fuel).
In the past year, DK made a loss of £1.4m, marking a substantial improvement
of £6.0m compared to the previous year's performance. This impressive growth
was primarily driven by three key factors. First, procuring low-cost fuels for
the blast furnace significantly reduced operational expenses. Second,
successfully renegotiating waste dust gate fee contracts led to a meaningful
reduction in the cost of materials. Lastly, favourable zinc pricing in the
market considerably increased revenue from the zinc output. These strategic
actions collectively contributed to a substantial improvement in the business
performance, showcasing DK's effective management and adaptability in a
competitive industry.
Looking forward, we anticipate an improvement in pig iron pricing in the
coming year to drive DK back into delivering a profit above the current close
to breakeven result.
During the year, HRMS made a cash return to the Group of £6.3m (2024: £7.8m)
reflecting the commitment from local management to continue to return funds to
the Group. The distribution from HRMS is funded from the ongoing trading
activities and it not dependent on the performance of DK.
Summary
The Group has delivered strong performance in Services and experienced a
significant improvement in the HRMS joint venture. Despite the decrease in
profits report in Hargreaves Land, largely as a result of an exceptionally
strong prior year, revenue increased following higher sales activity within
the Group's largest project, Blindwells. With a strong order book in Services
and promising long-term opportunities ahead, I firmly believe the Group is
well-positioned to sustain its positive momentum.
Gordon Banham
Group Chief Executive
30 July 2025
Consolidated Statement of Profit and Loss
and Other Comprehensive Income
for the year ended 31 May 2025
Note
2025 2024
£000 £000
Revenue 264,436 211,146
Cost of sales (209,582) (167,763)
Gross profit 54,854 43,383
Other operating income 829 6,404
Administrative expenses (40,297) (33,920)
Operating profit 15,386 15,867
Analysed as:
Operating profit (before amortisation charges) 15,577 16,058
Amortisation of intangible assets (191) (191)
Operating profit 15,386 15,867
Finance income 2,013 2,078
Finance expense (3,956) (2,802)
Share of profit in joint ventures (net of tax) 4,013 1,533
Profit before tax 17,456 16,676
Taxation 3 (2,716) (4,458)
Profit for the year 14,740 12,218
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Loss in defined benefit pension schemes (45) (12,377)
Tax recognised on items that will not be reclassified to profit or loss 3 11 3,094
Items that are or may be reclassified subsequently to profit or loss
Foreign exchange translation differences (1,733) (569)
Share of other comprehensive income of joint ventures, (net of tax) 840 167
Other comprehensive expense for the year, net of tax (927) (9,685)
Total comprehensive income for the year 13,813 2,533
Profit/(loss) attributable to:
Equity holders of the Company 14,754 12,278
Non-controlling interest (14) (60)
Profit for the year 14,740 12,218
Total comprehensive income/(expense) attributable to:
Equity holders of the Company 13,827 2,593
Non-controlling interest (14) (60)
Total comprehensive income for the year 13,813 2,533
Basic earnings per share (pence) 4 44.81 37.78
Diluted earnings per share (pence) 4 44.07 37.00
Non-GAAP Measures
Basic underlying earnings per share (pence)* 4 45.24 38.22
Diluted underlying earnings per share (pence)* 4 44.50 37.43
* The basis of Underlying earnings per share is set out in Note 5
.
Group Balance Sheet
at 31 May 2025
Group
2025 2024
£000 £000
Non-current assets
Property, plant and equipment 10,209 9,415
Right-of-use assets 43,971 40,675
Investment property 15,218 14,829
Intangible assets including goodwill 5,857 6,048
Investments in joint ventures 59,848 61,988
Trade and other receivables - 4,000
Deferred tax assets 12,124 11,323
Retirement benefit surplus 641 1,259
147,868 149,537
Current assets
Inventories 47,519 49,325
Trade and other receivables 84,870 70,905
Income Tax Asset 2,499 -
Contract assets 10,041 6,425
Cash and cash equivalents 23,304 22,700
168,233 149,355
Total assets 316,101 298,892
Non-current liabilities
Other interest-bearing loans and borrowings (17,579) (15,884)
Retirement benefit obligations (2,889) (2,979)
Provisions (22,026) (15,290)
Deferred tax liabilities (4,353) -
(46,847) (34,153)
Current liabilities
Other interest-bearing loans and borrowings (15,204) (18,270)
Trade and other payables (45,811) (48,383)
Provisions (14,040) (4,524)
Income tax liability - (1,466)
(75,055) (72,643)
Total liabilities (121,902) (106,796)
Net assets 194,199 192,096
Group
2025 2024
£000 £000
Equity attributable to equity holders of the Parent
Share capital 3,314 3,314
Share premium 74,005 73,990
Other reserves 211 211
Translation reserve (2,991) (1,258)
Merger reserve 1,022 1,022
Hedging reserve 318 318
Capital redemption reserve 1,530 1,530
Share-based payment reserve 3,029 2,730
Retained earnings 114,046 110,510
194,484 192,367
Non-controlling interest (285) (271)
Total equity 194,199 192,096
Group Statement of Changes in Equity
for year ended 31 May 2025
Group Share capital £000 Share premium £000 Translation reserve Hedging reserve £000 Other reserves Capital redemption reserve Merger reserve £000 Share- based payment reserve Retained earnings Total Parent equity Non-controlling interest Total equity £000
£000
£000
£000
£000
£000
£000
£000
At 1 June 2023 3,314 73,972 (689) 318 211 1,530 1,022 2,388 119,136 201,202 (211) 200,991
Total comprehensive income/(expense) for the year
Profit/(loss) for the year - - - - - - - - 12,278 12,278 (60) 12,218
Other comprehensive expense - - (569) - - - - - (9,116) (9,685) - (9,685)
Total comprehensive (expense)/income for the year - - (569) - - - - - 3,162 2,593 (60) 2,533
Transactions with owners recorded directly in equity
Issue of shares - 18 - - - - - - - 18 - 18
Equity-settled share-based payment transactions - - - - - - - 342 - 342 - 342
Dividends paid - - - - - - - - (11,788) (11,788) - (11,788)
Total contributions by and distributions to owners - 18 - - - - - 342 (11,788) (11,428) - (11,428)
At 31 May 2024 and 1 June 2024 3,314 73,990 (1,258) 318 211 1,530 1,022 2,730 110,510 192,367 (271) 192,096
Total comprehensive income/(expense) for the year
Profit/(Loss) for the year - - - - - - - - 14,754 14,754 (14) 14,740
Other comprehensive (expense)/income - - (1,733) - - - - - 806 (927) - (927)
Total comprehensive (expense)/income for the year - - (1,733) - - - - - 15,560 13,827 (14) 13,813
Transactions with owners recorded directly in equity
Issue of shares - 15 - - - - - - - 15 - 15
Equity-settled share-based payment transactions - - - - - - - 299 - 299 - 299
Dividends paid - - - - - - - - (12,024) (12,024) - (12,024)
Total contributions by and distributions to owners - 15 - - - - 299 (12,024) (11,710) - (11,710)
-
At 31 May 2025 3,314 74,005 (2,991) 318 211 1,530 1,022 3,029 114,046 194,484 (285) 194,199
Group Cash Flow Statement
for year ended 31 May 2025
Group
Note 2025 2024
£000 £000
Cash flows from operating activities
Profit for the year 14,740 12,218
Adjustments for:
Depreciation of property, plant and equipment and right-of-use assets 18,775 16,212
Amortisation of intangible assets 191 191
Net finance expense 1,943 724
Share of profit in joint ventures (net of tax) (4,013) (1,533)
Profit on sale of property, plant and equipment, investment property and (629) (6,204)
right-of-use assets
Equity-settled share-based payment expenses 299 342
Income tax expense 3 2,716 4,458
Contributions to defined benefit pension schemes (276) (5,427)
Translation of investments (361) (217)
33,385 20,764
Change in inventories 2,467 (10,024)
Change in trade and other receivables (16,975) 1,777
Change in trade and other payables (1,683) 5,358
Change in provisions and employee benefits 16,253 5,226
33,447 23,101
Interest received 1,891 2,078
Interest paid (3,075) (2,548)
Income tax paid (2,960) (37)
Net cash inflow from operating activities 29,303 22,594
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 775 219
Proceeds from sale of investment property - 7,879
Proceeds from sale of right of use assets 257 115
Acquisition of property, plant and equipment (3,406) (2,254)
Acquisition of investment property (389) (1,040)
Acquisition of right of use assets (83) -
Payment for acquisition of subsidiaries (661) (500)
Dividend received from joint ventures 6,267 7,800
Increase in loans due from joint ventures (1,573) (683)
Repayment of loan/(loan to) pension scheme in relation to buy-in 4,000 (4,000)
Net cash inflow from investing activities 5,187 7,536
Cash flows from financing activities
Principal elements of lease payments (21,648) (17,425)
Dividends paid (12,024) (11,788)
Net cash outflow from financing activities (33,672) (29,213)
Net increase in cash and cash equivalents 818 917
Cash and cash equivalents at 1 June 22,700 21,859
Effect of exchange rate fluctuations on cash held (214) (76)
Cash and cash equivalents at 31 May 23,304 22,700
Notes
1 Basis of preparation and status of financial information
The financial information set out above has been prepared and approved by the
Directors in accordance with the recognition and measurement criteria of
international accounting standards in conformity with the requirements of the
Companies Act 2006.
The financial information set out above does not constitute the Group's
statutory accounts for the years ended 31 May 2025 or 31 May 2024. Statutory
accounts for 2024 have been delivered to the Registrar of Companies, and those
for 2025 will be delivered in due course. The auditor has reported on those
accounts; their reports were (i) unqualified, (ii) did not include a reference
to any matters to which the auditor drew attention by way of emphasis without
qualifying their report and (iii) did not contain a statement under section
498 (2) or (3) of the Companies Act 2006.
The accounting policies set out below have, unless otherwise stated, been
applied consistently to all periods presented in these consolidated financial
statements.
Going Concern
The Group's financing is not dependent on bank borrowings. However, the Group
has access to a £12m invoice discounting facility, which is currently undrawn
and will remain in place at this level until 31 October 2026. Notwithstanding
that, a rigorous review of cash flow forecasts including testing for a range
of challenging downside sensitivities has been undertaken. Mitigating
strategies to these sensitivities considered by the Board exclude any remedies
which are not entirely within the Group's control. As a result, and after
making appropriate enquiries including reviewing budgets and strategic plans,
the Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, the Board continues to adopt the going concern basis in preparing
the Annual Report and Accounts
These results were approved by the Board of Directors on 30 July 2025.
2 Segmental Information
The following analysis by industry segment is presented in accordance with
IFRS 8 on the basis of those segments whose operating results are regularly
reviewed by the Board of Directors (the Chief Operating Decision Maker as
defined by IFRS 8) to assess performance and make strategic decisions about
allocation of resources.
The sectors distinguished as operating segments are Services, Hargreaves Land,
Unallocated and HRMS.
• Services: Provides materials handling, mechanical and electrical
engineering, land restoration, logistics and bulk earthworks into the energy,
environmental, infrastructure and industrial sectors.
• Hargreaves Land: The development and realisation of value from the
land portfolio including rental income from investment properties and the
share of profit of the Unity joint venture.
• Unallocated: The corporate overhead contains the central functions
that are not devolved to the individual business units.
• Hargreaves Raw Materials Services ("HRMS"): The Group's share of its
German joint venture, which includes Hargreaves Services Europe Limited which
is the parent company of HRMS and DK.
These segments are combinations of subsidiaries and joint ventures. They have
separate management teams and provide different products and services. The
four operating segments are also reportable segments.
The segment results, as reported to the Board of Directors, are calculated
under the principles of IFRS. Performance is measured on the basis of
underlying profit/(loss) before tax, which is reconciled to profit/(loss)
before tax in the tables below:
Services Hargreaves Land Unallocated HRMS Total
2025 2025 2025 2025 2025
£000 £000 £000 £000 £000
Revenue
Total revenue 247,688 20,078 - - 267,766
Intra-segment revenue (3,330) - - - (3,330)
Revenue from external customers 244,358 20,078 - - 264,436
Operating profit/(loss) (before amortisation) 18,393 1,931 (4,747) - 15,577
Share of (loss)/profit in joint ventures (net of tax) - (143) - 4,156 4,013
Net finance (expense)/income (2,508) 515 50 - (1,943)
Amortisation charge (191) - - - (191)
Profit/(loss) before taxation 15,694 2,303 (4,697) 4,156 17,456
Taxation (3,430) (183) 897 - (2,716)
Profit/(loss) after taxation 12,264 2,120 (3,800) 4,156 14,740
Depreciation charge 18,396 141 238 - 18,775
Capital expenditure 22,775 411 474 - 23,660
Net assets/(liabilities)
Segment assets 115,303 80,979 59,971 - 256,253
Segment liabilities (107,482) (3,774) (10,646) - (121,902)
Segment net assets 7,821 77,205 49,325 - 134,351
Joint ventures - 5,764 - 54,084 59,848
Total net assets 7,821 82,969 49,325 54,084 194,199
Unallocated net assets of £49.3m include cash and cash equivalents of
£23.3m, net deferred tax and corporation tax assets of £10.3m, amounts due
from joint ventures of £16.8m, a net pension liability of £2.2m, tangible
fixed assets of £1.7m and other corporate items (£0.6m liability).
Services Hargreaves Land Unallocated HRMS Total
2024 2024 2024 2024 2024
£000 £000 £000 £000 £000
Revenue
Total revenue 206,857 7,036 - - 213,893
Intra-segment revenue (2,747) - - - (2,747)
Revenue from external customers 204,110 7,036 - - 211,146
Operating profit/(loss) (before amortisation) 13,665 7,694 (5,301) - 16,058
Share of profit in joint ventures (net of tax) - 250 - 1,283 1,533
Net finance (expense)/income (2,293) 207 1,362 - (724)
Amortisation charge (191) - - - (191)
Profit/(loss) before taxation 11,181 8,151 (3,939) 1,283 16,676
Taxation (2,764) (1,704) 10 - (4,458)
Profit/(loss) after taxation 8,417 6,447 (3,929) 1,283 12,218
Depreciation charge 15,905 129 178 - 16,212
Capital expenditure 16,884 1,096 202 - 18,182
Net assets/(liabilities)
Segment assets 100,368 78,832 57,704 - 236,904
Segment liabilities (95,327) (5,389) (6,080) - (106,796)
Segment net assets 5,041 73,443 51,624 - 130,108
Joint ventures - 5,942 - 56,046 61,988
Total net assets 5,041 79,385 51,624 56,046 192,096
Unallocated net assets of £51.6m include cash and cash equivalents of
£22.7m, deferred tax asset of £11.3m, amounts due from joint ventures of
£17.0m, a net pension liability of £1.7m and other corporate items (£2.3m
asset).
3 Taxation
Recognised in the Statement of Profit and Loss
2025 2024
£000 £000
Current tax
Current year 255 1,344
Adjustments for prior years (1,102) 7
Current tax expense (847) 1,351
Deferred tax
Origination and reversal of temporary timing differences 2,561 2,267
Adjustments for prior years 1,002 840
Deferred tax expense 3,563 3,107
Tax expense in Income Statement (excluding share of tax of equity accounted 2,716 4,458
investees)
The deferred tax adjustment in respect of prior years of £1,002,000 (2024:
£840,000) relates to the treatment of losses assumed to be unused in the
previous year, which were ultimately utilised.
Recognised in Other Comprehensive Income
2025 2024
£000 £000
Deferred tax credit
Remeasurements of defined benefit pension schemes 11 3,094
11 3,094
Reconciliation of Effective Tax Rate
2025
£000 2024
£000
Profit for the year 14,740 12,218
Total tax expense 2,716 4,458
Profit before taxation 17,456 16,676
Tax using the UK corporation tax rate of 25.00% (2024: 25.00%) 4,364 4,169
Effect of tax rates in foreign jurisdictions (245) (249)
Tax effect of joint ventures (1,311) (321)
Changes in unrecognised tax losses 20 (49)
Non-deductible expenses 80 224
Other temporary trading differences (92) (163)
Adjustment in respect of previous periods (100) 847
Effective total tax expense 2,716 4,458
Factors That May Affect Future Current and Total Tax Charges
There are no known changes planned for the rate of UK corporate tax. The
deferred tax balances at 31 May 2025 and 31 May 2024 have been calculated
based on the rate substantively enacted at the balance sheet date of 25%.
4 Earnings per Share
The calculation of earnings per share ("EPS") is based on the profit for the
year attributable to equity holders and on the weighted average number of
shares in issue and ranking for dividend in the year.
2025 2024
Earnings EPS DEPS Earnings EPS DEPS
£000 Pence Pence £000 Pence Pence
Underlying earnings per share 14,883 45.24 44.50 12,361 38.22 37.43
Amortisation (net of tax) (143) (0.43) (0.43) (143) (0.44) (0.43)
Basic earnings per share 14,740 44.81 44.07 12,218 37.78 37.00
Weighted average number of shares (000's) 32,898 33,444 32,345 33,021
The calculation of weighted average number of shares includes the effect of
own shares held of 136,444 (2024: 332,401).
The calculation of diluted earnings per share ("DEPS") is based on the profit
for the year and the weighted average number of ordinary shares in issue in
the year. The potentially dilutive effect of the share options outstanding
(effect on weighted average number of shares) is 546,014 (2024: 676,305);
effect on basic earnings per ordinary share in the current year is 0.74p
(2024: 0.78p). Effect on underlying earnings per ordinary share is 0.74p
(2024: 0.79p).
5 Alternative Performance Measures Glossary
This report provides alternative performance measures ("APMs"), which are not
defined or specified under the requirements of International Financial
Reporting Standards. The Board believes that these APMs provide readers with
important additional information on the business.
Alternative Performance Measure Definition and Purpose
Underlying profit before tax ("UPBT") Represents the profit before tax prior to amortisation of intangible assets,
and, in accordance with International Accounting Standards, includes the
Group's share of the post-tax profit of its German joint venture. This measure
is consistent with how the business measures performance and is reported to
the Board.
2025
£000 2024
£000
Profit before tax 17,456 16,676
Amortisation of intangible assets 191 191
Underlying Profit before Tax 17,647 16,867
Basic underlying earnings per share Profit attributable to the equity holders of the Company prior to amortisation
of intangible assets after tax divided by the weighted average number of
ordinary shares during the financial year adjusted for the effects of any
potentially dilutive options. See Note 4.
EBITDA EBITDA is defined as profit before tax prior to charges for depreciation,
amortisation and interest and excludes the share of profit from joint ventures
and gains and losses on the sale of fixed assets and investment property.
2025 2024
£'000 £'000
Profit before tax 17,456 16,676
Depreciation 18,775 16,212
Amortisation of intangible assets 191 191
Net finance expense 1,943 724
Share of profit in joint ventures (net of tax) (4,013) (1,533)
Profit on sale of fixed assets and investment property (629) (6,204)
EBITDA 33,723 26,066
6 Posting of Report & Accounts
The Group confirms that the annual report and accounts for the year ended 31
May 2025 will be posted to shareholders as soon as practicable and a copy will
be made available on the Group's website:
www.hsgplc.co.uk
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR RLMRTMTATBMARecent news on Hargreaves Services
See all newsREG - Hargreaves Servs PLC - Preliminary Results for the year ended 31 May '25
AnnouncementREG - Hargreaves Servs PLC - Confirmation of preliminary results
AnnouncementREG - Hargreaves Servs PLC - Pre-Close Trading Update & Notification of Results
AnnouncementREG - Hargreaves Servs PLC - Confirmation of Board Changes
AnnouncementREG - Hargreaves Servs PLC - Transfer of shares held in Treasury
Announcement