Hargreaves Services Plc · LSE:HSP
Hargreaves Services — H1 FY2024 Earnings Presentation
25 slides from Hargreaves Services's earnings presentation, Jan 24, 2024
Slide 1: Interim Results
Interim Results Six months ended 30 November 2023 Wednesday 24 January 2024
Slide 2: Strategic Value Proposition
Strategic Value Proposition Gordon Banham Chief Executive 2
Slide 3: Strategic Value Proposition
Strategic Value Proposition Create Deliver Realise Secure opportunities in Execute on those opportunities Release locked up capital, established business areas where with an emphasis on low capital monetise and then return value to Hargreaves has expertise, requirement, contract selectivity sharehol
Slide 4: FY24 Interim Results Overview
FY24 Interim Results Overview Services Profit before tax • Increased level of operation on the HS2 contract, providing growth in revenue and margin both for our £2.7m earthmoving and mechanical and electrical engineering services; • Margin improvement has been observed across the businesses. (Nov 22
Slide 5: Financial Review
Financial Review Stephen Craigen Chief Financial Officer 5
Slide 6: Financial Review – Income Statement
Financial Review – Income Statement Six months ended Nov Nov 23 22 Margin £m Margin £m Services – Revenue and underlying margin growth due to earthmoving Revenue – Services 109.5 107.8 +2% activities and M&E works Revenue – Hargreaves Land 0.7 8.7 -92% Group Revenue 110.2 116.5 PBT - Services 7.1% 7
Slide 7: Financial Review – Balance Sheet
Financial Review – Balance Sheet Including £38.9m for Renewables: £7.4m Blindwells Other: £9.8m 30 Nov 23 (£’m) Services Land HRMS Unallocated Nov 23 May 23 Tangible FA’s (incl ROU assets) 42.7 17.2 - 0.3 60.2 64.8 Goodwill 5.6 - - - 5.6 5.7 Investments in JCEs - 5.9 67.3 - 73.2 74.3 Inventory 0.2 4
Slide 8: Finance Review – Cash flow
Finance Review – Cash flow Proceeds from disposal £0.1m Spend on Westfield (£0.8m) HRMS cash receipt £8.0m Other additions (£1.4m) Other working capital (£1.2m) Interim Results – six months ended 30 November 2023 8
Slide 9: Finance Review – HRMS Summary consolidated financials
Finance Review – HRMS Summary consolidated financials Income statement £’m c Nov 23 Nov 22 Revenue decline Due to deterioration in commodity pricing and decrease in volumes traded. Revenue – HRMS trading 135.8 250.5 Revenue – HRMS CPP 1.9 1.7 Margin Revenue - DK 65.6 70.5 Nov 23 margin of -2.1% (Nov
Slide 10: Operating Review - Services
Operating Review - Services Gordon Banham Chief Executive
Slide 11: Services – Resilience and quality
Services – Resilience and quality Major Customers Frameworks INDUSTRY SECTOR and term contracts 60+ 24% 26% Energy Secured orders at Nov 23 c.90% 12% Environmental UK Infrastructure Typical operating margins 38% 5%+ Industrial Revenue Credit Inflation resilience exposure resistant Services operates
Slide 12: Services – Growth opportunities
Services – Growth opportunities Major infrastructure projects Engineering capability Lower Thames Sizewell C – Completed and Nearing completion Crossing – contracts commissioned of the design and preferred already secured the five-leg installation of Lime partner to on two essential conveyor for Sil
Slide 13: Operating Review – Hargreaves Land
Operating Review – Hargreaves Land David Anderson Group Property Director 13
Slide 14: Hargreaves Land – Activities and Market
Hargreaves Land – Activities and Market Core Market Activities Conditions Promotion and delivery of development • H1 FY24 dominated by strong sites for house builders, industrial, inflation, rapid rise in interest rates logistics and retail warehousing and and simultaneous softening of renewable ene
Slide 15: H1 Key Events – Development Projects
H1 Key Events – Development Projects 1. Unity, Doncaster - 191,000 sq ft forward funded logistics unit completed ahead of programme and sales of two plots for McDonalds and Starbucks restaurants agreed. 2. Westfield, Fife - Phase 1 infrastructure completed and sale of Energy from Waste ground lease
Slide 16: Update – Renewables
Update – Renewables £’m Aug 23 Jan 24 3 Wind Farms 125 MW 129 MW 90 MW now operational 6 Access Agreements 506 MW 506 MW 120 MW now operational 2 Battery Storage 550-1,050 MW 800 MW 1,181-1,681 MW 1,435MW Est value at maturity £27.2m-£28.9m £27.2m-£28.9m Future Schemes 800 MW 2,295 MW Renewable wind
Slide 17: Renewables – New Projects
Renewables – New Projects 750 MW battery storage scheme awaiting planning consent. 110 MW of new battery storage, wind access agreements and solar projects now contracted. 8 new renewables projects at heads of terms stage comprising: - 450 MW of wind farm access agreements - 1,085 MW of battery stor
Slide 18: Operating Review – HRMS
Operating Review – HRMS Gordon Banham Chief Executive
Slide 19: Hargreaves Raw Materials GmbH – Joint Venture
Hargreaves Raw Materials GmbH – Joint Venture HRMS - Trading Market leading trader in industrial HRMS is a Joint Venture raw materials in Germany and Hargreaves owns 49.9% of voting shares, however, is Northern Europe. Supplying solid entitled to 86% of economic fuels, refractory minerals, pig iron
Slide 20: Hargreaves Raw Materials GmbH - Trading
Hargreaves Raw Materials GmbH - Trading Profits from trading in HRMS have been variable over the period of Historic performance of the Trading business ownership, with profits depending on 30.0 commodity cycles and market pricing. HARGREAVES SHARE OF PROFIT 25.0 AFTER TAX £M 20.0 Levels of profit ac
Slide 21: DK Recycling – Material outputs
DK Recycling und Roheisen GmbH – Material outputs Pig Iron and Coke Zinc • Zinc sales are 60% hedged. Zinc prices have Pig Iron v Coke fluctuated over the last 2 years from $2,000 to peaks of over $4,500 and have now fallen back to $2,500. 900 800 • There is no cost to DK in producing zinc as it is
Slide 22: Hargreaves Services plc – ESG
Hargreaves Services plc – ESG Social Governance Environmental Controls and monitors how Examines how the Employee Monitors and reports how the Company deals with its Wellbeing Company manages its the Company controls its leadership, internal controls relationship with employees, impact on the enviro
Slide 23: Hargreaves Services plc – Outlook
Hargreaves Services plc – Outlook Services • Over 90% of revenues secured under contract for the year ending 31 May 2024, cementing Services continued delivery of sustainable and reliable profits into the future Group Outlook • Trading outlook for FY24 Land is strong led by Services and Hargreaves L
Slide 24: Hargreaves Services plc – Investment Proposition
Hargreaves Services plc – Investment Proposition Experienced Board with Proven Track Record Strong Balance Excellent and Sheet with No Sustainable Bank Debt Dividend Return Good Visibility Three Pillars of of Forward Business Value – Work Pipeline Services, Land, HRMS 24 Interim Results – six months
Slide 25: Hargreaves Services plc - Disclaimer
Hargreaves Services plc - Disclaimer • No representation or warranty, expressed or implied, is made or given by or on behalf of Hargreaves Services plc (the “Company”) or any of its directors or any other person as to the accuracy, completeness or fairness of the information contained in this presen
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