Hargreaves Services plc · LSE:HSP
Hargreaves Services — H1 FY2023 Earnings Presentation
26 slides from Hargreaves Services's earnings presentation, Jan 25, 2023
Slide 1: Interim Results
Interim Results Six months ended 30 November 2022 Wednesday 25 January 2023
Slide 2: Strategic Value Proposition
Strategic Value Proposition Gordon Banham Chief Executive 2
Slide 3: Hargreaves Services plc - Strategic Value Proposition
Hargreaves Services plc - Strategic Value Proposition Create Deliver Realise Secure opportunities in Execute on those opportunities Release locked up capital, established business areas where with an emphasis on low capital monetise and then return value to Hargreaves has expertise, requirement, con
Slide 4: FY23 Interim Results Overview
Hargreaves Services plc – FY23 Interim Results Overview Services Profit before Tax • Increased level of operation on the HS2 contract, providing substantial growth in revenue and profitability both for our earthmoving and mechanical and electrical engineering services; £18.7m • Outside of HS2, reven
Slide 5: Financial Review
Financial Review John Samuel Group Finance Director 5
Slide 6: Financial Review – Income Statement
Financial Review – Income Statement Six months ended Nov Nov 22 21 Services – Revenue, PBT Margin £m Margin £m and margin improved due Revenue – Services 107.8 70.2 +54% to increased operations at Revenue – Hargreaves Land 8.7 5.9 +47% HS2 & £2m non-recurring Group Revenue 116.5 76.1 asset realisati
Slide 7: Financial Review – Balance Sheet
Financial Review –Balance Sheet Renewables £11.8m Other £4.5m Including £29.8m for Blindwells 30 Nov 22 Services Land HRMS Unallocated Nov 22 May 22 Tangible FA’s (incl ROU assets) 42.9 16.3 - 0.2 59.4 40.3 Goodwill 5.9 - - - 5.9 4.8 Investments in JCEs - 5.1 65.4 - 70.5 58.4 Inventory 0.2 33.7 - -
Slide 8: Finance Review – Cash flow
Finance Review – Cash flow Proceeds from disposal £4.8m Spend on Westfield (£5.0m) Other additions (£2.2m) Interim Results – six months ended 30 November 2022 8
Slide 9: Finance Review – HRMS Summary consolidated financials
Finance Review – HRMS Summary consolidated financials Income statement £’m Nov 22 Nov 21 Revenue – HRMS trading 250.5 173.7 Revenue Growth Revenue – HRMS CPP 1.7 1.4 Due to improvement in commodity pricing and increase in volumes traded Revenue - DK 70.5 56.0 Margin Revenue 322.7 231.1 Nov 22 margin
Slide 10: Operating Review - Services
Operating Review - Services Gordon Banham Chief Executive
Slide 11: Services – Resilience & quality
Services – Resilience & quality Major Customers Frameworks INDUSTRY SECTOR & term contracts 50+ 24% 27% Energy Secured orders at Nov 22 c.87% 11% Environmental UK Infrastructure Typical operating margins 38% 5%+ Industrial Revenue resilience Inflation resistant Credit exposure Many contracts are Ser
Slide 12: Services - HS2 Earthmoving
Services - HS2 Earthmoving The HS2 contract has driven a substantial growth in the revenue and profitability of the Group Plant Currently 100 items of plant in operation on HS2 (300 in FY22 peak) Headcount Movement Currently 150 for HS2 1.6M cu m has been (400 in FY22 peak) moved in the six months t
Slide 13: Services - HS2 Conveyor
Services - HS2 Conveyor The Group has also developed and installed a 650m conveyor system, which will: This innovative solution has been recognised Carbon Emissions through the team winning the C23 Reduce Carbon emissions project of the year on HS2 by over 5,000 award in the best tonnes environmenta
Slide 14: Operating Review – Hargreaves Land
Operating Review – Hargreaves Land David Anderson Group Property Director 14
Slide 15: Hargreaves Land – Key events
Hargreaves Land – Key events Blindwells, Edinburgh • Completion of 4.5 acres sale to Ogilvie Homes in H1. • Development of 77 new homes now commenced. • 100 homes are now complete and occupied with a further 380 currently under construction. Unity, Doncaster • Work commenced on forward funded 191,00
Slide 16: Hargreaves Land – Development Pipeline and Outlook
Hargreaves Land – Development Pipeline and Outlook Residential Commercial 4,220 plots with GDV £219m 35,000 sq ft retail space GDV £8.0m planning permission completed/forward sold in FY23 15 acres of additional GDV £15m commercial land now under contract 780 plots £32.5m sales 70,000 sq ft new retai
Slide 17: Land - Renewable Energy Portfolio Summary
Hargreaves Land - Renewable Energy Portfolio Summary Windfarms Access Agreements ➢ 3 sites - 130MW capacity with planning and grid ➢ 7 agreements connections ➢ 450MW capacity ➢ Dalquhandy completed (operational early 2023) ➢ Broken Cross being developed out 3,000 acres Westfield Battery Storage EFW
Slide 18: Renewable Energy Portfolio Asset Valuation
Hargreaves Land - Renewable Energy Portfolio Asset Valuation Potential Income Scenario – Current portfolio Confirmed development expected to be developed out by Operators 2026/27 include 704 MW of renewables capacity with planning permission and grid connections Estimated full annual income once dev
Slide 19: Operating Review – HRMS
Operating Review – HRMS Gordon Banham Chief Executive
Slide 20: Raw Materials GmbH - Trading
Hargreaves Raw Materials GmbH - Trading Historic performance of the Trading business 30.0 Profits from Trading in HRMS have been HARGREAVES SHARE OF PROFIT variable over the period of ownership, with profits depending on commodity cycles and 25.0 market pricing. The business has never made a loss. A
Slide 21: Hargreaves Raw Materials GmbH - CPP
Hargreaves Raw Materials GmbH - CPP Total production capacity of 400,000t per annum Product will displace the highly polluting brown lignite coal dust which is expected to be phased out by the German government; Accessible market is 2million tonnes Currently producing 100kt, delivering a break even
Slide 22: DK Recycling und Roheisen GmbH – Material outputs
DK Recycling und Roheisen GmbH – Material outputs Pig Iron and Coke Zinc Zinc sales are 40-50% hedged through to the end of May 2023, zinc prices have increased over the past 24 months from $1,800 to over $4,000, with no associated increase in production costs for DK. Chart below shows the zinc comm
Slide 23: Hargreaves Services plc – ESG
Hargreaves Services plc – ESG Social Governance Environmental Controls and monitors how the Examines how the Company Monitors and reports how the Company deals with its manages its relationship with Company controls its impact leadership, internal controls employees, suppliers and on the environment
Slide 24: Hargreaves Services plc – Outlook
Hargreaves Services plc – Outlook Services • Over 50 framework agreements in place, many with cost plus characteristics or escalation factor clauses to cover increases in fuel and other inflation impacted costs • Strong visibility and good profit resilience • Further growth opportunities from HS2 an
Slide 25: Hargreaves Services plc – Investment Proposition
Hargreaves Services plc – Investment Proposition Experienced Board with Proven Track Record Excellent & Strong Balance Sustainable Sheet with No Dividend Bank Debt Return Good Visibility Three Pillars of of Forward Business Value – Work Pipeline Services, Land, HRMS 25 Interim Results – six months e
Slide 26: Hargreaves Services plc - Disclaimer
Hargreaves Services plc - Disclaimer • No representation or warranty, expressed or implied, is made or given by or on behalf of Hargreaves Services plc (the “Company”) or any of its directors or any other person as to the accuracy, completeness or fairness of the information contained in this presen
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