Strong results are expected for industrial group Hargreaves Services with revenue anticipated to reach £223m and pre-tax profits of £16.5m.
The County Durham-based firm, which provides services such as earthmoving, logistics and raw materials supply as well as land sales, says it has performed well in the six months to the end of November thanks to a strong underlying fundamentals and growth in work. CEO Gordon Banham said the group's services division continued to benefit from inflation-proof contracts that insulated it from overheads such as the increase in Employers National Insurance Contributions announced in the Autumn Budget.
He also pointed to big contracts on HS2 - which is expected to last for another two years - and the construction of Sizewell C nuclear power station, where the firm's earthmoving works have expanded. Hargreaves said the services division remained "resilient, with good visibility supported by a solid portfolio of term and framework contracts with blue-chip customers within the º£½ÇÊÓƵ infrastructure and energy sectors".
Across the group's Germany-based joint venture, which specialises in supplying industrial raw materials, there was said to have been an improved performance after a weaker start to the year relative to previous years' substantial profits.
Mr Banham said: "As everybody remembers, this is a commodity driven business and one of our key inputs is coke to drive the blast furnace. The price of that has come down significantly. But let's be clear, in Europe, there are still a lot of challenges: pig iron prices are down, there's almost recession in Germany, but we've been able to compensate that with a decrease in the cost of raw materials, we've increased gate fees - so that's all helped. And an important point is that we've got the dividend payment out of Germany already this year, so that's secure."
Meanwhile, teams in the group's land business are focused on marketing of the first tranche of renewable energy land assets which Hargreaves has been cultivating. The group has previously talked of looking to achieve sales reaching £27m in the next three to five years. Mr Banham added: "As we've said, we've gone to the market, we're getting a lot of interest and when the time is appropriate we'll update the market. I hope that won't be too long, but time will tell."
Hargreaves is due to report half-year results to the end of November on January 29. At the end of November, Hargreaves held cash of £15.7m, down from £18.7m at the same point last year, which it said reflected investment into certain land assets ahead of realisations anticipated in the second half of the financial year. The group also reported leasing debt of around £34.6m, up from £28.8m at the same time in 2023.
