A growing order book across its materials handling and logistics operations has prompted Hargreaves Services to plug above-expected revenue and profits.
The County Durham-based group continued to talk up its involvement in the HS2 project and forthcoming opportunities on the Sizewell C Nuclear Power Station as it said revenue for the year to the end of May is likely to beat an expected £247.6m, while underlying pre-tax profits will be ahead of an anticipated £16.5m. The results are likely to bring an uplift on 2024's performance, when revenue was £211.1m and pre-tax profits were £16.9m.
Growth in profitability has been driven by two of Hargreaves' key divisions: its services business which includes earthmoving and bulk logistics, among others, and its German joint venture, Hargreaves Raw Materials Services (HRMS) which is a supplier of raw materials and metal recycling. Meanwhile, Hargreaves Land - which includes major brownfield regeneration sites - saw a "stable" year following record profits in 2024, with bosses saying a deal is in the offing this year as part of the first tranche of renewable energy land assets the group hopes to sell.
Within the services business, Hargreaves told investors its underlying order book continued to grow with support from high quality contract wins in its materials handling and logistics activity. Its board now expects the services business to report pre-tax profits that are between 6%-7% ahead of market expectations.
The business has repeatedly talked of the scope for earthmoving contracts to come from the Sizewell C site, which recently saw the Government sign off on £14.2bn of investment to build the facility as part of the Spending Review. The project is expected to span 20 years and cost £30bn.
Hargreaves also said high levels of visibility within its pipeline lead mean future years will also be better than current expectations in terms of both revenue and pre-tax profits. Bosses have previously talked of how the business has benefited from inflation-proof contracts that insulate it from additional costs such as April's increase in Employers National Insurance Contributions.
Across the HRMS joint venture, significant growth in profitability is expected thanks to improvements within the business steel waste recycling operation which has seen increased gate fees and lower input fuel costs. Trading was otherwise stable in HRMS.
At the end of May, Hargreaves held cash reserves of £23.3m, up from £22.7m in 2024, with only debt related to leasing equipment, excluding debt within its joint ventures. The total value of debt was about £32.8m, down from £34.2m. Hargreaves will report preliminary 2025 results on July 30.
