Hargreaves Services final results: profit more than doubles as dividend rises to 40p

Hargreaves Services has delivered a strong set of final results, with growth across Services, Land and its German joint venture.

For the year ended 31 May 2026, revenue rose 32.9% to £351.4 million, while profit before tax jumped 130.3% to £40.3 million. The proposed final dividend has increased to 20.5p, taking the full-year payout to 40.0p per share.

The headline numbers are impressive, although investors should note that reported profit benefited from land asset disposals and £7.0 million of exceptional income. Even after adjusting for exceptional items and intangible asset charges, underlying profit before tax almost doubled.

Hargreaves Services' key financial results

Metric	2026	2025	Change
Revenue	£351.4 million	£264.4 million	32.9%
EBITDA	£36.6 million	£33.7 million	8.6%
Underlying profit before tax	£34.0 million	£17.6 million	93.2%
Profit before tax	£40.3 million	£17.5 million	130.3%
Basic underlying earnings per share	79.1p	45.2p	75.0%
Basic earnings per share	93.3p	44.8p	108.3%
Full-year dividend	40.0p	37.0p	8.1%
Cash and cash equivalents	£21.6 million	£23.3 million	-7.3%

EBITDA means earnings before interest, tax, depreciation and amortisation. It increased by a more modest 8.6%, partly because profits from renewable energy land disposals are excluded from this measure.

Full details are available in the original company announcement.

Services remains the main growth engine

The Services division generated revenue of £329.9 million, up 35.0%, and underlying profit before tax of £20.2 million, up 27.0%.

Growth was supported by work on major UK infrastructure projects including HS2 and Sizewell C. Hargreaves also secured its first position on the Lower Thames Crossing and expanded its engineering work at Drax Power Station.

Waste management revenue reached £15.6 million, having generated no revenue in the 2023 financial year. That suggests the division is broadening its activities rather than relying exclusively on earthmoving and materials handling.

There was some margin pressure. Services' net margin declined from 6.5% to 6.1%, reflecting the lower relative margins earned from supplying building aggregates into infrastructure projects. Revenue therefore grew faster than divisional profit.

Still, the forward visibility looks useful. Hargreaves now has more than 75 term and framework contracts, with over 70% of budgeted Services revenue for the new financial year already visible. More than 90% of these contracts contain escalation clauses designed to offer protection against inflation.

Investors can find further company coverage on the dedicated Hargreaves Services PLC share page.

Land disposals produced a major profit increase

Hargreaves Land's underlying profit before tax rose from £2.3 million to £12.5 million. The main driver was the first disposal of assets from the renewable energy land portfolio.

Two wind farms and three access agreements were sold for initial consideration of £8.8 million. Land connected to a battery energy storage system was sold for a further £6.8 million.

There could also be up to £5.0 million of contingent consideration linked to future energy production, with any variable receipts expected by September 2029. As this amount is conditional, investors should not treat it as guaranteed.

The remaining near-term renewable portfolio includes five wind farm and access agreements with 300MW of combined generation capacity. These have been independently valued at £9.1 million, compared with a balance-sheet value of £3.3 million.

Elsewhere, two plot sales at Blindwells generated proceeds of £20.8 million. The wider land pipeline has expanded to 31 schemes covering 12,014 residential plots, up from 24 schemes and more than 10,000 plots a year earlier.

Land can deliver meaningful cash and profits, but the timing of transactions is inherently less predictable than recurring service contracts. That could make divisional earnings uneven between reporting periods.

Germany continues its recovery

Hargreaves' share of post-tax profit from Germany increased 53.7% to £6.3 million, marking the third consecutive year of improvement.

The trading operation handled 846,000 tonnes of product, up from 755,000 tonnes, and generated local profit before tax of £11.7 million. The DK steel waste recycling operation remained loss-making, although its local loss narrowed from £1.4 million to £1.1 million.

HRMS paid Hargreaves a £6.6 million dividend during the year, up from £6.3 million. Management said this distribution came from trading activities and was not dependent on DK's performance.

Construction of the zinc processing facility remains on plan, with commissioning expected to begin in early 2028. Total capital expenditure is expected to be £18.5 million, supported by a £1.8 million German government grant and a £10.8 million state-backed loan.

This project offers potential medium-term value, but it also introduces construction, commissioning and market risks that investors will need to monitor.

Cash returns were substantial, but lease debt increased

Hargreaves returned £32.6 million to shareholders during the year, comprising £20.0 million through a tender offer and £12.6 million in dividends. The tender offer resulted in the company reacquiring 7% of its shares.

Despite those returns, year-end cash remained at £21.6 million, compared with £23.3 million a year earlier. Net cash inflow from operating activities was £31.6 million.

The group has no conventional bank debt and its £16.0 million invoice discounting facility was undrawn. However, lease and hire purchase debt increased from £32.8 million to £40.4 million as Hargreaves invested in plant to support higher activity.

This distinction matters. The balance sheet is debt-free excluding leases, but the lease commitments remain genuine financial obligations.

Dividend rises as leadership changes

The board has proposed a final dividend of 20.5p, up from 18.5p. Together with the 19.5p interim dividend, this takes the full-year payout to 40.0p per share.

If approved, the final dividend will be paid on 2 November 2026 to shareholders on the register at the close of business on 25 September. The shares are due to trade ex-dividend on 24 September.

The results also arrive alongside a significant management transition. Gordon Banham will step down as chief executive on 31 July 2026 after 25 years in charge. Simon Hicks, who joined as chief operating officer in May 2025, will succeed him.

Banham will remain involved by managing the German joint venture investment and overseeing development of the zinc recycling plant. That continued involvement may help preserve operational knowledge during the handover.

What investors should watch next

These results show a business benefiting from UK infrastructure spending, profitable land realisations and improving German operations. The Services contract portfolio provides a degree of revenue visibility, while further land assets could release additional value.

The less straightforward points are the decline in Services margin, the reliance of Land on transaction timing, the continuing loss at DK and the increased lease debt. Reported profit also included £7.0 million of exceptional income connected to the termination of the Tungsten West mining services contract.

Even so, underlying profit before tax rose 93.2%, the dividend increased and substantial capital was returned without exhausting the group's cash resources. The next test will be whether Hargreaves can maintain Services growth and margins while continuing to realise land value and deliver the German zinc project on plan.