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magazineWhy Hargreaves is still a buy after rising 61% in less than a year
Hargreaves Services (HSP:AIM) 515p
Gain to date: 60.9%
Original entry point: Buy at 320p, 25 February 2021
Until the publication of its first half results, shares in industrial and property services group Hargreaves Services (HSP:AIM) were trading at just 400p, but the reaction to the numbers was bullish with the stock gaining 17% in a day.
This optimism reflected the huge strategic progress the company has made during the pandemic and management’s promise of materially higher earnings in the next few years.
The six-month period to 30 November showed a near 10-fold jump in pre-tax profits to £10.4 million thanks to an outstanding contribution from its German materials business.
Alongside its German operations, the firm’s UK land business made significant progress on both the residential front, where it cleared nearly £10 million on the sale of a site in Edinburgh to Persimmonn (PSN), and the commercial front, where it develops space for warehouses and the logistics sector.
Meanwhile, the services business has ‘started work in earnest on HS2’, the extension to the UK’s high-speed train network, with monthly revenue of more than £2 million as the project gears up.
With a large cash pile from the sale of part of its German asset, the company is paying out a raised dividend and a special dividend for the foreseeable future.
SHARES SAYS: Long-term investors should continue to add to this exciting business.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
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