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Investing.com -- Hargreaves (LON:HRGV) Services (LON:HASE) on Wednesday reported strong results for the six months ending November 30, 2024, with double-digit growth in both revenue and earnings before interest, tax, depreciation, and amortization (EBITDA).
The UK-based company posted a 14% increase in revenue to £125.3 million, up from £110.2 million in the same period the previous year. EBITDA rose by 21% to £14.9 million, reflecting the strength of its core services division and improved performance from its German joint venture, HRMS.
The company returned to profitability, with pre-tax profit reaching £5.3 million compared to £2 million in the same period last year.
Earnings per share more than doubled, and the company increased its interim dividend by 3% to 18.5p per share.
The services segment remained the primary driver of revenue, growing to £121.2 million from £109.5 million.
“The improved performance from our Services business is expected to continue into future years as a result of pipeline opportunities, that require a highly skilled, experienced workforce and a proven track record of safe delivery,” said Roger McDowell, group chair at Hargreaves Services in a stock exchange filing
The company attributed this increase to strong demand in earthmoving activities, including significant contributions from large-scale infrastructure projects.
The net margin in the services business was maintained at over 7%, with contract wins and renewals further solidifying revenue visibility.
Hargreaves reported continued progress on major contracts, including a five-year extension with FCC (BME:FCC) for transportation services and a new two-year agreement with Yorwaste for recycling transfer services. The company also secured a new contract with Enfinium for waste management services.
Activity on high-profile infrastructure projects such as HS2 and Sizewell C saw increased volumes, with the latter experiencing a substantial uptick in earthworks activity.
The company remains confident that the services division will continue to outperform expectations, with 90% of revenue for the full year already secured under contract.
The land division recorded revenue of £4.1 million, up from £0.7 million the previous year, but reported a loss before tax of £1.4 million due to the timing of sales.
The company sold 11 acres at Blindwells in January 2025. A planned sale at the same site was delayed due to transport planning approvals and is now expected to close in the next financial year.
Despite this temporary setback, the company remains optimistic about the long-term profitability of the Blindwells project, where more than 250 families now reside. It also continues to market a tranche of renewable energy land assets, with interest already received from potential buyers.
Hargreaves’ German joint venture, HRMS, returned to profitability, posting a £0.1 million post-tax profit compared to a £1.9 million loss last year.
This improvement stemmed from higher recycled material prices and lower fuel costs. The company received £6 million in cash from HRMS in July 2024, supporting its strategy of realizing value from the investment.
While the German economy remains sluggish, the company expects HRMS to maintain stable performance. The group’s overall exposure to HRMS has reduced, with its investment now valued at £62.7 million, down from £75.3 million a year ago.
Hargreaves ended the period with cash reserves of £15.7 million, slightly down from £18.7 million a year earlier, mainly due to ongoing investment in land assets.
The company’s only debt remains leasing obligations, which increased to £34.2 million from £28.8 million, reflecting investment in equipment to support revenue growth in the services division.
Hargreaves expects to meet full-year market expectations, driven by a strong services order book and progress in land sales and renewable energy asset disposals.