Earthmoving works help Hargreaves Services boost revenue and profitability

Industrial group Hargreaves Services says it is on track to meet full year expectations having grown revenue by more than 13% in the six months to December.

New, unaudited interim results for the County Durham group show revenue of £125.3m, up from £110.2m in the same period 2023. Pre-tax profits nearly doubled to £5.3m, compared with £2.7m as operating profits reached more than £6m, up from £5.1m.

Strong performance in the group's services business - which includes earthmoving, logistics and environmental services - spurred the results with CEO Gordon Banham saying there was even more work in the pipeline than had been expected. The division reported first half revenues of more than £121m and pre-tax profits of £8.8m - 10.7% and 12.8% rises respectively. Hargreaves said there had been numerous new contract wins and renewals, as well as extended works at major infrastructure projects such as HS2 and the Sizewell C nuclear power station construction.

Meanwhile, performance in Hargreaves' Land business was slower than expected with bureaucratic delays pushing completions and profits into next year - including a transaction at the group's key Blindwells site in Scotland. However, Mr Banham said he was confident in the division and its pipeline.

In Germany, Hargreaves' raw materials joint venture HRMS was said to be much improved with metal recycling and pig iron producer DK returning to profit thanks to easing of solid fuels pricing including coke and the impact of EU sanctions on Russian pig iron boosting the firm's market. The progress was made despite continued economic downturn in Germany, though Mr Banham said management now think it is the "bottom of the cycle" and that there is significant potential for the business as the country's economy recovers.

At the same time, investors were introduced to Hargreaves new chief operating officer, Simon Hicks, who will initially focus on the services business. Mr Hicks brings experience from the infrastructure and energy industries including through senior roles at Altrad Services, Bilfinger, Cape plc and most recently as CEO of waste-to-energy specialist Evero Energy Limited.

Roger McDowell, group chair, said: "I am pleased to report another strong set of results for the group. The 14% revenue growth highlights the ability of Hargreaves to identify and capture opportunity in our areas of strength. We remain committed to our strategy of creating and realising value for our shareholders, as evidenced by the progressive increase in the interim dividend.

"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. With the first tranche of renewable energy land assets now marketed and cash continuing to return from Germany, we are delivering on our commitments to shareholders."