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A high-yielding industrial group with hidden value

Simon Thompson: It delivers growth, pays a chunky division and will release value from its balance sheet
A high-yielding industrial group with hidden valuePublished on January 30, 2025
  • First-half revenue up 14 per cent to 3125mn
  • Pre-tax profit has doubled to £5.3mn
  • Net cash (excluding leasing debt) of £15.7mn
  • 18 per cent EPS upgrade to 2025-26 forecasts

Interim results from Hargreaves Services (HSP:600p), an industrial group and land developer, highlight the benefits of having a diversified revenue stream.

The group’s services division, which provides critical support to many core industries (mainly energy, environmental and UK infrastructure) through the provision of mechanical and electrical contracting services, logistics and major earthworks, was the standout performer. Buoyed by additional contract opportunities on earthmoving projects, notably HS2 and Sizewell C, divisional pre-tax profit increased 13 per cent to £8.8mn on 10 per cent higher revenue of £121mn to account for all group profit. Moreover, with 90 per cent of full-year revenue already secured and growth in the order book underpinned by a raft of contract wins, joint house broker Singer Markets upgraded its full-year contribution from this business by £2mn to £14.5mn.

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