Hargreaves Services – 304p

3 December 2019 – trading update

Hargreaves Services has released an update on trading ahead of reporting its interim results for the six months ended 30 November 2019.  Trading has been satisfactory and interim results are set to be in line with expectations.  Group underlying operating profit for the first half is expected to be slightly ahead of the same period last year.  Revenue will be lower than the comparative period mainly due to reduced levels of activity in Specialist Earthworks following the completion of site work on certain civils contracts.  Net debt as at 30 November was £34.7m, compared with £28.6m as at 30 November 2018. The net debt figure excludes the proceeds of the sale of Drakelands Restoration Limited, which has also been announced this week.  As expected, working capital increased in the first half of the year, mainly due to higher coal inventory levels.  Interim results for the six months ended 30 November 2019 are due to be released on 29 January 2020.  Although the shares have crept up recently we keep our BUY rating.

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