Hargreaves Services Plc · LSE:HSP
Hargreaves Services — H1 FY2025 Earnings Presentation
25 slides from Hargreaves Services's earnings presentation, Jan 29, 2025
Slide 1: Hargreaves Services plc Interim Results
Hargreaves Services plc Six months ended 30 November 2024 Wednesday 29th January 2025
Slide 2: Delivering on Strategic Commitments
Delivering on Strategic Commitments Gordon Banham Chief Executive
Slide 3: Delivering on Commitments
Delivering on Commitments • Organic growth Services revenue grown by supporting long term 11%, net margin maintained at sustainable dividend 7%. • Focus on contract wins in Services areas of core Interim dividend increased by competence c.3% to 18.5p First seven renewable assets • Realisation of ren
Slide 4: Financial Review
Financial Review Stephen Craigen Chief Financial Officer
Slide 5: Financial Review – Income Statement
Financial Review – Income Statement Six months ended Nov Nov 2024 2023 Margin £m Margin £m Revenue – Services 121.2 109.5 +10.7% Services – Top line growth due to additional earthmoving activity with Revenue – Hargreaves Land 4.1 0.7 +486% margin maintained Group Revenue 125.3 110.2 +13.7% PBT - Ser
Slide 6: Financial Review – Balance Sheet
Financial Review – Balance Sheet Including £48.1m for Renewables: £7.6m Blindwells Other: £8.6m 30 Nov 24 (£’m) Services Land HRMS Unallocated Nov 24 May 24 Tangible FA’s (incl. ROU assets) 50.3 16.2 - 0.6 67.1 64.9 Goodwill 6.0 - - - 6.0 6.0 Investments in JCEs - 5.8 48.5 - 54.3 62.0 Inventory 1.2
Slide 7: Valuation Considerations
Valuation Considerations Services* Land HRMS (Joint Venture) REVENUE £208m BOOK VALUE (Cost) c£80m BOOK VALUE (Cost) £70m EBIT £12.3m RENEWABLE UPLIFT >£20m ANNUAL CASH RECEIPT £7m EBITDA £27.3m Timescale 5-7 years Timescale 5-7 years Equity Employed £8m-£15m Moving to a lower capital model, utilisi
Slide 8: Finance Review – Cash flow
Finance Review – Cash flow OPERATING ACTIVITIES INVESTING FINANCING Including £4.9m Blindwells 40.0 9.1 35.0 -0.3 6.3 30.0 6.1 -8.8 -0.8 25.0 22.7 -1.9 -1.0 £m 20.0 -9.8 15.7 15.0 Receipt from HRMS -5.9 10.0 5.0 EBITDA - Increase Decrease Total Interim Results – six months ended 30 November 2024 8
Slide 9: Finance Review – HRMS Summary
Finance Review – HRMS Summary Consolidated financials Income statement Revenue decline £’m c Nov 24 Nov 23 Volumes in HRMS trading broadly consistent at 389kt (2023: 390kt), Revenue – HRMS 109.3 137.7 however, commodity pricing is lower impacting on the revenue Revenue – DK 47.8 65.6 Revenue 157.1 2
Slide 10: Operating Review Services
Operating Review Services Gordon Banham Chief Executive
Slide 11: Services - Resilience and quality
Services - Resilience and quality Inflation resistant Many contracts are defined cost plus a margin with built in inflation and escalation factors to protect margin. Credit exposure No over reliance on a single customer; largest debtor represents 9% of total book. Revenue resilience 65+ Services ope
Slide 12: Services – Market focus
Services – Market focus Major Earthmoving Bulk Logistics Specialist M&E Turnkey Engineering Core Services Land Remediation Quarrying and Aggregate Bulk Materials Waste Management Services Handling Solutions
Slide 13: Services – Outlook
Services – Outlook Major infrastructure projects HS2 A further two seasons at Sizewell C substantial enabling works Lower Thames Crossing preferred Tungsten West strong contractual current levels at secured in the partner to position with TW least remaining first half Balfour Beaty awaiting funding
Slide 14: Hargreaves Land
Hargreaves Land David Anderson Group Property Director
Slide 15: Key Events - Transactions
Key Events - Transactions ✓ Two sales, totalling 483 ✓ Financial close completed plots completed to Avant on 500MW Broken Cross and Places for People. battery storage making it ✓ Second sale now one of the largest such exchanged with Bellway for schemes in Europe. Lease 217 plots, completion granted
Slide 16: Hargreaves Land – Renewables portfolio
Hargreaves Land – Renewables portfolio Independent Status Nov 24 Book Value Valuation 2 Windfarms OPERATIONAL 206MW 2 Access Agreements UNDER 1 Windfarm 300MW CONSTRUCTION 3 Access Agreements £7.4m £27m-£29m 1 Windfarm PRE- 2 Access Agreements 892MW CONSTRUCTION 1 Battery Storage 11 Schemes 1,398MW
Slide 17: Project Pipeline
Project Pipeline Strategy Build a long-term capital light development pipeline, using conditional contracts, development agreements, promotion agreements and options. Residential - 6 new sites contracted in H1 FY25. - Potential to deliver over 1,100 residential plots across 159 acres with a GDV of £
Slide 18: Operating Review HRMS
Operating Review HRMS Gordon Banham Chief Executive
Slide 19: Hargreaves Raw Materials GmbH – JV
Hargreaves Raw Materials GmbH – JV HRMS - Trading HRMS is a Joint Venture Market leading trader in industrial raw Hargreaves owns 49.9% of voting shares, materials in Germany and Northern Europe. however, is entitled to 86% of economic benefit Supplying solid fuels, refractory minerals, pig through
Slide 20: Hargreaves Raw Materials GmbH - trading
Hargreaves Raw Materials GmbH - trading Profits from trading in HRMS have been variable over the period of ownership, given dependency on commodity cycles and market Historic performance of the trading business pricing. 30.0 HARGREAVES SHARE OF PROFIT DK acquisition in December 25.0 2019 provides gr
Slide 21: DK Recycling und Roheisen GmbH – Operating model
DK Recycling und Roheisen GmbH – Operating model Blast Suppliers Inputs furnace Output Customers Coke c130kt Pig iron 250kt Coal c40kt Zinc 6kt Iron ore c30kt Energy Steel waste c500kt DK is a net energy generator with surplus output being sold back to the German grid Interim Results – six months en
Slide 22: DK Recycling und Roheisen GmbH
DK Recycling und Roheisen GmbH Drivers for DK Improvement - -2.0 -4.0 3.9 0.6 -4.6 -1.1 £m -6.0 Zinc -8.0 0.8 1.1 Recovery in zinc pricing in second half of-10.0 the year. -9.9 90% of zinc output now hedged for -12.0 coming year. 30-Nov-23 Pig Iron Pricing Increase gate fees Reduction agents Zinc pr
Slide 23: Hargreaves Services plc – Outlook
Hargreaves Services plc – Outlook Services - 90% of FY25 revenue secured giving excellent visibility. - Improved revenue and profitability expected in the current and future years due to earthmoving pipeline. Group Outlook - Strong trading outlook for FY25 and Land beyond led by Services. - First tr
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 High quality asset Return backed income Strong Visibility Three Pillars of of Forward Business Value – Work Pipeline Services, Land, H
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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