Industrial services group Hargreaves Services has reported a near-halving of profit despite a robust performance across its operations as profit at its German joint venture fell.
The London-listed group, which delivers services for the property and industrial sectors, reported a pre-tax profit of £16.7m in the year ending May 31, 2024, down from £27.2m during the 12 months prior.
The share of profit from HRMS fell from £15.5m to £1.3m.
However, Hargreaves’ revenue remained unchanged from the previous year. Revenue totalled £211m.
Although overall profit was down, the Hargreaves Land division delivered a record-breaking performance. The arm increased its underlying profit before tax by more than 110 per cent to £8.2m, compared to £3.9m in the 12 months before.
The group’s earnings before interest, tax, deprecation and amortisation (EBITDA) increased 19.7 per cent to £26.1m, compared to £21.8m in the year before, due to improved profitability of Hargreaves’ services business.
The buy-in of the company’s pension scheme was completed in March 2024 for a cash consideration of £3.7m.
Group chair Roger McDowell said: “The group remains focused on its core objective to create, realise and deliver value for our shareholders.
“Despite the challenges faced by HRMS, the improvement in the second half of the year provides confidence that we will see an increased contribution in the current financial year.
“We also expect to bring to market the first tranche of renewable energy land assets, marking the beginning of substantial realisation events within that business.
“Additionally, the services business continues to perform strongly, with over 70 per cent of revenue already secured and further opportunities emerging within the power, water and infrastructure sectors.
“The balance sheet remains free from bank debt and no longer requires pension deficit contributions, providing a strong and stable platform from which to deliver substantial value to shareholders in the coming years.”