Hargreaves confident profits will beat expectations as land business set to report record year

Bosses at industrial and property group Hargreaves Services expect pre-tax profits to beat expectations this year.

The Durham-based provider of logistics, land and raw materials, told shareholders that profits in the year to the end of May are likely to be "marginally ahead" of market predictions. Ahead of full year results at the end of July, the group said its services unit - which includes earthmoving, bulk logistics and environmental services, among others - had traded well throughout the second half of the year.

And across the group's land business, which provides large brownfield tracts for housing and regeneration projects, a record pre-tax profit is expected. That will come after a series of deals including a residential site at Maltby in Yorkshire and the land occupied by an energy from waste plant at Westfield in Scotland.

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The bumper performance in the land division is driven by early completion of some option fees for renewable energy ground leases. But as revenue across the unit is likely to fall lower than expectations due to a greater proportion of profits coming from sales of investment properties. Hargreaves said the division is poised to bring its first set of renewable energy land assets to market in its 2025 financial year.

Meanwhile, the group's German joint venture - Hargreaves Raw Materials Services GmbH (HRMS) - suffered what was described as a "difficult" first half. Earlier this year Hargreaves reported a slowdown in the commodities market which HRMS serves, and pointed to a loss making start to the year. Bosses now expect a substantial improvement in performance across the second half of the year thanks to improved trading volumes, increased gate fees and pig iron pricing across the business' recycling operation and the effect of annual plant maintenance period occurring in the first half.

At May 31, Hargreaves said it held cash reserves of £22.7m, up from £21.9m at the same point in 2023. Cash generation was offset by the group paying £7.7m as part of a buy-in of its defined benefit pension scheme earlier this year, involving Just Group plc.

Hargreaves, which had been paying £1.8m in annual deficit reduction payments, had faced a shortfall of £3.7m in the scheme's assets but the deal means members benefits to be paid out at their retirement are now covered by an insurance policy provided by Just.