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Targeting deep value opportunities

A diversified industrial services group and land developer has delivered impressive results and the fundamentals supporting its businesses support a materially higher rating.
Targeting deep value opportunities
  • Underlying pre-tax profit rises 55 per cent to £32.7mn on annual revenue of £178mn
  • Adjusted fully diluted EPS up 46 per cent to 100p
  • Full-year dividend rises 6 per cent to 20.4p

Following a robust pre-close trading update in early June when analysts pushed through their eighth profit upgrade in the past 12 months, Hargreaves Services (HSP:526p), a diversified industrial services group and brownfield land developer, has delivered eye-catching annual results.

Surging commodity prices explain the bumper profit growth as German metals trading subsidiary, HRMS, a key supplier of specialist raw materials to European customers in the steel, smelting, ferroalloy, limestone, and ceramic industries, doubled its net profit to £32.5mn on 84 per cent higher revenue. Hargreaves holds an 86 per cent share of the business, so booked a £27.3mn post tax profit from the subsidiary in its latest accounts.

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