Hargreaves Services announces excellent progress towards strategic targets

Hargreaves Services announced on Tuesday excellent progress towards stated strategic targets for operating profit, value creation from property and the conversion of legacy assets into cash, with the final dividend coinciding with the group's pay out ratio target.

In its preliminary results for the year ended 31 May 2017, the group said it delivered continuing underlying operating profit of £9.8m, an increase of 113% on the prior year.

Development value of the property portfolio showed £52.1m of potential unrealised gains on an independent red book basis, while strong progress was achieved towards the orderly realisation of legacy assets into cash, including the agreement to sell the surplus underground mining equipment.

During the reporting period, the company realised £25.5m of legacy assets into cash with an additional £3.2m of underground mining assets contracted for sale post year-end, said the company.

The AIM-listed company further highlighted that final dividend of 4.5 pence was in line with the group's 40% pay-out ratio target, bringing proposed full year dividend to 7.2p, a 213% increase on the prior year.

Trading operations also showed strong performance in Germany.

Commenting on the results, Hargreaves chairman David Morgan said: "these results demonstrate the excellent progress made by the Group over the last year. The achievement of our Group profit target was a positive step forward, which we believe marks a real turning point for the Group. The independent property valuation exercise provides further confidence about the longer term value that we aim to create from our property portfolio."

"Whilst challenges remain to be overcome in some of our businesses, we are on track to achieve or over-acheive the three key strategic goals we set ourselves in 2016. We will continue to be careful in managing capital allocation and risk as we move forward".