Hargreaves’ FY21 results confirm a period of material profit growth and cash generation. It has been a transformational period, in which all direct coal related activities ceased, HRMS profits surged and net debt was eliminated. As expected, the first 12p additional dividend has been proposed (total FY21 DPS 19.2p) and we expect this to recur for a further three years, at least. As we wrote in our recent detailed note, Hargreaves has been wholly repositioned and now has genuine momentum. The sha
Companies: Hargreaves Services plc
Yesterday’s positive trading update confirmed that recent momentum at HRMS, Hargreaves’ German JV, has continued into the early months of the new year. It is already clear that FY’22 results will be materially ahead of previous expectations (66% PBT upgrade). Moreover, FY’21 results will be even better than anticipated (18% PBT upgrade), reflecting the current strength of commodity market conditions. Our new forecasts prudently assume that these conditions normalise during FY’22 with no lasting
Having exited all coal related activities, Hargreaves Services has been wholly repositioned over recent years. The Group now comprises a growing Services business concentrated on the key markets of energy, environmental, industrial and infrastructure; a property and regeneration specialist (Hargreaves Land); and a trading operation with strong asset backing (HRMS) in Germany’s industrial heartland. Hargreaves performed resiliently in 2020 despite the COVID backdrop and now has significant moment
Following the recent flurry of significant forecast upgrades, Hargreaves has confirmed an in line conclusion to FY21. It has been a year of excellent progress across the Group, particularly for Hargreaves Land and HRMS, the two drivers of recent outperformance. Cash generation has been another highlight of the year with a year end net cash position of £16.3m (2020: net debt of £28.1m). The shares have responded well to recent newsflow but Hargreaves’ valuation remains undemanding in our view, tr
As announced yesterday afternoon, Hargreaves’ German JV, HRMS, has again outperformed expectations. With less than two weeks left of FY21, we upgrade our profit forecasts for the JV by £5.3m to £10.5m. This is more than double our previous forecast for HRMS, which had already been significantly upgraded in April. The FY21 EPS upgrade is as much as 46%. As we noted yesterday, this outperformance reflects positive market conditions (in terms of the strength of certain raw material commodity prices
Hargreaves has announced the early completion of the first significant land sale at its Unity JV. The sale of a 79 acre plot to a national retailer was originally expected to complete in the second half of FY22, but it has been brought forward at the purchaser’s request. The early completion results in a significant upgrade to FY21 earnings (EPS +26%) and a corresponding reduction in FY22 (-23%). The overall impact is net neutral but the news is indicative of the attractions of the Unity develop
Hargreaves has released an unscheduled and very positive update. The performance of the German JV has improved materially, prompting a 45% upgrade to FY21 EPS forecasts. Meanwhile, the Services and Land businesses in the UK are trading in line with expectations, whilst driving significant outperformance on cash. This has created a £26m positive swing versus previous FY21 cashflow forecasts, albeit with catch up investment to follow in FY22. In our view, the Hargreaves story has genuine momentum
Hargreaves’ specialist earthworks business, Blackwell, has been appointed by the EKFB JV to carry out earthworks on part of the HS2 project. The award is the largest in Blackwell’s history and provides firm underpinning for our existing specialist earthworks forecasts. This is the third notable piece of good news for Hargreaves since the half year-end, following the disposal of coal inventories in December and exchange of contracts on the third phase of land at Blindwells in February. The share
PensionBee, the online pensions provider, with a mission to make pensions simple, so that everyone can look forward to a happy retirement, considering an IPO on the High Growth Segment of the Main Market of the London Stock Exchange. PensionBee is a leading online pensions provider in the UK, with approximately 130,000 Active Customers and £1.5 billion of assets under administration , in each case as at 28 February 2020. Cornerstone FS to join AIM, an SME focused, cloud-based provider of inter
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Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” Kanabo Group (RTO by Spinnaker Opportunities SOP.L) on the main market (standard). Raising £6m, enlarged mkt cap £
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Hargreaves Land has conditionally sold a further phase of land of Blindwells, another positive development following the recent completion of the first sale to Bellway. Phase 3 has been conditionally sold to Persimmon, demonstrating strong interest in the site amongst national housebuilders with multiple phases to be sold over coming years. The sale is expected to complete next year, providing good underpinning for Hargreaves Land forecasts for FY22. The shares have responded well to recent news
Hargreaves has confirmed a resilient H1 performance and reiterated full year expectations. December’s speciality coal disposal was an important strategic step, which moves the Group into a net cash position (ex. leases). There is also news today of the first completion at Blindwells, a notable milestone for the development and for Hargreaves Land. The shares have recovered from their recent lows but, in our view, still do not reflect the progress of the past year or our expectations of earnings
Looking Ahead At The Next Week
Hargreaves has announced the sale of its entire speciality coal inventory to its German JV, HRMS, for a cash consideration of c.£24m. This accelerates the Group’s exit from coal related activities in the UK and releases the capital tied up in the coal business. The impact on PBT is neutral but the balance sheet benefit is immediate, eliminating net bank debt by the May year end (a £15m reduction compared to previous forecasts). The recent (9th Dec) trading update reiterated full year expectation
A robust H1 update indicates that Hargreaves’ interims (27th Jan ’21) will be in line with expectations. Full year expectations are also reiterated. There is positive contract news for Industrial Services and further progress at Hargreaves Land. Strong cash generation has been a highlight of the recent performance with net bank debt reducing to £8.0m and still falling. The shares have participated in the market rally of recent weeks but remain modestly valued (FY22 P/E 10x, dividend yield 7.5%).
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Companies: Sylvania Platinum Ltd.
Yet again, Rio managed to maintain its dividend extravagance. Although, besides mighty iron ore, the exceptional H1 results were partly also driven by aluminium and copper – where normalcy is gathering momentum. With key divisions moving in the right direction, and balance sheet flexibility being put to good use, i.e. rewarding shareholders and pursuing growth – this time via a greenfield lithium investment, Rio remains a promising large-cap mining play. Further re-rating may materialise if gove
Companies: Rio Tinto plc
i3 Energy announced that it has completed tie-in operations for its two recently drilled Marten Hills wells into the Clearwater Formation (each consisting of 8 horizontal laterals). The 01-12-075-26W4 and 02-12-075-26W4 wells penetrated 13,057m and 12,644m, respectively, of reservoir – both at maximum vertical depths of circa 630m. The wells are now on production and flowing back drilling fluid. This clean-up process is expected to take approximately three to four weeks. The company indicated th
Companies: i3 Energy Plc
ADX Energy (ADX AU) C: Target of A$0.040 per share: High impact newsflow in 2H21 - 2H21 will be very important for the company with significant upcoming newsflow. In our view, the most meaningful eventis the drilling of the Anshoff well in Austria. We were previously anticipating that the company would need a farm-in partner to fund the well. However, in the context of the current high oil price, >A$4 mm in cash at the end of June and
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Wressel proppant squeeze completed
Companies: Union Jack Oil Plc
While the start of the buy-back programme was announced (but not its amount), the positive surprise comes from the dividend. While the dividend is still down by 50% vs pre-COVID-19, management made a good decision, as this level is sustainable and will get rewarded.
Companies: Royal Dutch Shell Plc Class A
Companies: Genel Energy PLC
• 2Q21 production was 8,825 bbl/d marginally above guidance.
• While the 3WD water disposal well has now been completed, one of the booster pumps is not fully operational, constraining water injection . This in turn has constrained current field oil production to~8,800 bbl/d. (Production from the recently drilled 7D well has naturally declined from 3.5 mbbl/d to 2.5 mbbl/d outperforming the company’s expectations). The booster pump is expected to be either repaired or replaced over the next
Companies: PetroTal Corp.
United Oil & Gas has provided a H1/21 operational and trading update ahead of a shareholder call at 12pm today. United continues to go from strength to strength with the Company announcing three positive well results at Abu Sennan in H1/21 – providing a material uplift to the Company's low-cost production base, whilst also demonstrating the material remaining potential within the Abu Sennan licence. United's H1/21 net working interest production averaged 2,730boepd, c14% above the Company's 2,40
Companies: United Oil & Gas Plc
Chaarat announced a strong 1H21 as Kapan produced 25,896 gold equivalent ounces - 13,466 oz gold, 272,635oz silver, 852t of copper and 3,170t of zinc. This resulted in mine level EBITDA of US$13.5m and Kapan’s debt has been reduced to US$24m (Jun). Management has reiterated FY21 guidance of 57koz AuEq.
The main YoY changes were an increase in third-party ore processed - 70kt versus 10kt, and a gold equivalent grade improvement of 12%. Consistent supplies of third-party ore are to be expected go
Companies: Chaarat Gold Holdings Ltd.
Altus Strategies* (ALS LN) - La Mancha launches La Mancha Fund, a Luxembourg based long only fund dedicated primarily to gold mining.
Ariana Resources (AAU LN) – Kiziltepe production guidance maintained
Castillo Copper (CCZ LN) – Quarterly report highlights the ‘Big One' prospect
Chaarat Gold (CGH LN) – Robust Kapan production in H1/21 with Tulkubash funding completion pushed to Q3/21
Glencore (GLEN LN) – Glencore to pay $9.85m to settle zinc rigging dispute
Jervois Mining (JRV AU) – Jervoi
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The group’s AGM statement highlights a strong rebound in activity during Q1, with improved market demand, helped by new customer and project wins. Indeed, it reports revenues up >50% year on year. Progress continues with Atlas, with Spain and Holland now live. The previously flagged supply chain constraints and price pressures continue but are being mitigated by price rises. No change to forecast expectations are signalled. The shares have moderately underperformed in the quarter and offer good
Companies: Trifast plc
South Harz Potash is expected to start drilling its first of two planned confirmation holes at Ohmgebirge in Q4/CY21. The Company has submitted supplementary detailed information to regional mining authorities to support the final step in the permitting process.
As a result of the delays experienced in procuring landowner and tenant approved drill sites and the competition for drill rig availability, South Harz Potash now expects drilling of the second confirmatory twin hole in Q1/CY22. The tw
Companies: South Harz Potash Ltd
What a difference a year makes - 12 months ago, the focus, quite understandably, was on the course of the pandemic and the lifting of the Lockdown (1) measures. For investors, it was the sustainability of the rally in markets seen since March 2020. Today, while we are still thinking about the lifting of lockdown measures, we are also concerned about two “old favourites” from previous decades. Inflation and the parlous state of public finances. The BoE has said that although CPI inflation rose to
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EQTEC have just announced their Q2 Trading Update and have highlighted several key updates in their immediate pipeline. In line with our expectations, EQTEC are on track to hit our modelled revenue and EBITDA projections for 2021. Billingham has completed its concept design and progresses towards financial close.
Companies: EQTEC PLC