Preliminary Results for the year ended 31 May '25

About this update from Hargreaves Services Plc

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 [email protected] .   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 .   For further details:     Hargreaves Services Gordon Banham, Chief Executive Stephen Craigen, Chief Financial Officer Simon Hicks, Chief Operating Officer   www.hsgplc.co.uk Tel: 0191 373 4485 Walbrook PR (Financial PR & IR) Paul McManus, Lianne Applegarth, Joe Walker   Tel: 020 7933 8780 or [email protected] Mob: 07980 541 893 / 07584 391 303 07407 020 470     Singer Capital Markets (Nomad and Corporate Broker) Phil Davies / Sam Butcher / Sara Hale     Tel: 020 7496 3000 Cavendish Capital Markets Ltd (Joint Corporate Broker) Katy Birkin / Hamish Waller - Corporate Finance Jasper Berry / Tim Redfern - Sales / ECM     Tel: 020 7220 0500   About Hargreaves Services plc ( 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 (pre-allocation) 2 2,100 179 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  £000 Hedging reserve £000 Other reserves  £000 Capital redemption reserve  £000 Merger reserve £000 Share- based payment reserve  £000  Retained earnings  £000 Total Parent equity £000 Non-controlling interest £000  Total equity £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 - - - - - - - - 1 4,754      14,754 (14) 14,740 Other comprehensive (expense)/income - - (1, 7 3 3 ) - - - - - 806 ( 927 ) - ( 927 ) Total comprehensive (expense)/income for the year - - (1, 7 3 3 ) - - - - - 1 5,560 1 3,827 (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 right-of-use assets (629) (6,204) 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. 3 m, 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 £000 2024 £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 3,10 7 Tax expense in Income Statement (excluding share of tax of equity accounted investees) 2,716 4,458                                 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 £000 2024 £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 £000 EPS Pence DEPS Pence Earnings £000 EPS Pence DEPS 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  £'000   2024  £'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

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