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Before we get started, it is worth noting that Hargreaves Services is listed on AIM, the Alternative Investment Market, rather than the main London Stock Exchange. AIM is designed for smaller, growing companies and operates under a lighter regulatory framework. Investors should be aware of the following risks:
Liquidity: Wider bid-offer spreads and lower daily volumes make it harder to enter or exit a position without moving the price.
Regulation: Less stringent disclosure and corporate governance requirements than the main market.
Index exclusion: AIM shares are not eligible for most major indices, limiting institutional demand and weighing on valuations.
Volatility: Smaller companies can move sharply on relatively little news or trading activity.
None of this makes AIM uninvestable. Some of Britain’s most interesting businesses call it home. But an additional layer of caution is warranted.
In this article we cover the business and its three divisions, assess the most recent financial results, examine the balance sheet and dividend track record, and weigh up whether the growth story still has legs.
Key Financials:
Share price: 790p
P/E ratio (FY26 consensus): 12.3x
EPS (FY26 consensus): 64.1p
Dividend yield: 4.9%
52-week range 616p to 838p
Hargreaves Services plc (LON: HSP)
Headquartered in County Durham and founded in 1994, Hargreaves is a diversified industrial services group. It shifts earth on major infrastructure projects, develops brownfield land into housing, and runs a steel waste recycling joint venture in Germany. Hargreaves has been quietly compounding, raising its dividend, and returning cash to shareholders. Sometimes boring is beautiful.
So what does Hargreaves actually do? The group operates across three distinct divisions, each at a different stage of maturity and each contributing something different to the overall picture.
The Services division is the engine room. This is the business that wins contracts on the UK’s biggest infrastructure programmes, putting boots on the ground at HS2, Sizewell C nuclear power station, and most recently the Lower Thames Crossing. It handles earthworks, materials, logistics and mechanical and electrical engineering across the connectivity, clean energy and environmental markets. If Britain is building something large and complicated, there is a reasonable chance Hargreaves has a role in it somewhere.
Hargreaves Land is the property arm, focused on unlocking value from a portfolio of brownfield sites. The flagship project is Blindwells in East Lothian, a major residential development that has been steadily generating cash through plot sales. The division also holds a portfolio of renewable energy land assets, which it has been selling off in tranches at attractive premiums to book value.
Finally, HRMS, short for Hargreaves Raw Materials Services, is the group’s German joint venture. Based in Duisburg, it trades in specialist commodity markets and owns DK Recycling und Roheisen GmbH, a recycler of steel waste material. It is the most opaque of the three divisions to an outside observer, and perhaps the most easy to overlook. As we will see, that would be a mistake.
The Numbers
The most recent full set of results covered the six months to 30 November 2025, and they were, by any measure, a strong set of numbers.
Group revenue came in at £183.1 million, up 46% on the same period a year earlier. Pre-tax profit almost tripled, rising 170% to £14.3 million from £5.3 million. Earnings per share climbed to 33.4p from 12.2p. The interim dividend was raised 5.4% to 19.5p. Cash on the balance sheet more than doubled to £37.3 million.
The Services division drove the bulk of the revenue growth, bringing in £171.4 million, up 41% year on year, as activity on the major infrastructure projects continued to ramp. Hargreaves Land swung from a loss to a profit, with revenue rising from £4.1 million to £11.7 million following a £11.5 million plot sale at Blindwells to Bellway and the completion of the first tranche of renewable energy land asset disposals for £8.8 million. HRMS posted a post-tax profit of £1.0 million against £0.1 million in the prior period.
Group Chair Roger McDowell said in the interim results announcement: “I’m delighted to once again report a strong set of results for the Group. This has been another period of substantial growth within our Services business, demonstrating the value that we can bring to our clients and sustainable infrastructure more generally.”
Then, just last week, the group published its pre-close trading update for the full year to 31 May 2026. Revenue is expected to come in ahead of market expectations of £288.2 million, with profit before tax in line with the consensus forecast of £33.4 million and earnings per share of 64.1p. Profitability is expected to have grown across all three divisions for the first time.
One figure in that update deserves attention. During the year, the Services division settled a long-running mining services contract with Tungsten West plc, generating a non-recurring profit of £7 million. Investors should factor this out when thinking about the underlying earnings power of the business going forward.
The full year results are due on 29 July 2026.
The Balance Sheet and Capital Returns
One of the most attractive features of Hargreaves Services is a balance sheet that most companies its size would envy. As of the November 2025 interim results, the group held £37.3 million in cash with no structural debt beyond lease obligations. That is a net cash position on a business generating earnings per share of 33.4p in a single half year. It is not the kind of financial profile you tend to associate with a £240 million AIM company.
The board has been putting that cash to work. In April 2026, Hargreaves completed a tender offer, buying back up to 7.12% of its own shares at 850p per share, returning up to £20 million to shareholders in a single transaction. This followed a £15 million special distribution made in the prior year. Combined, the group has now returned approximately £35 million to shareholders over two years, a figure that represents a meaningful proportion of the current market capitalisation.
On the ordinary dividend, the board operates a progressive policy and has raised the payment for three consecutive years. The interim dividend was lifted 5.4% to 19.5p at the half year, representing 50% of the board’s expected full year payment of 39.0p per share. At the current share price of around 790p, that implies a trailing dividend yield of approximately 4.9%. That is not eye-watering by income standards, but it sits alongside a balance sheet that is debt-free, a business growing earnings rapidly, and a management team that has shown a consistent willingness to return surplus capital. The yield alone does not tell the full story here.
The average dividend growth rate over the past three years has been approximately 30%, which, if sustained at even a fraction of that pace, suggests the income case here improves materially over time.
The capital allocation here is refreshingly straightforward. Organic growth, a rising dividend, and surplus cash returned to shareholders when the balance sheet allows. No deals for the sake of it, no empire building. For income investors, that tends to matter as much as the yield itself.
Can the business still grow?
The short answer is yes, but not at the same pace as FY26, and investors should understand why.
The Services division is the engine, and the pipeline is substantial. Hargreaves holds active positions on HS2, Sizewell C and the Lower Thames Crossing, three projects that between them represent the backbone of Britain’s infrastructure spending for the next decade.
The case for continued growth
HS2 — active and ramping, though with the project approximately 60% complete the revenue runway here is shorter than the other two. Any further government scope reductions would be a direct headwind
Sizewell C — the most important long-term driver. The final investment decision was only made in July 2025, meaning this contract has barely started. Construction is expected to take nine to twelve years. Hargreaves is embedded early, which is exactly where you want to be on a decade-long build
Lower Thames Crossing — the newest pipeline opportunity. Hargreaves is already on site and in discussions on the main earthworks package, estimated at around £100 million. That figure alone would be transformative for a company of this size
Revenue visibility — 90% of Services revenue for FY26 was already contracted at the interim stage, with an average contract duration of 3.9 years and two thirds of revenue from clients of three or more years standing
Blindwells and land disposals — meaningful acreage still to sell, with further renewable energy land disposals expected to generate cash at premiums to book value for several years yet
Zinc recycling plant — if the HRMS Duisburg facility delivers on schedule in May 2028, it adds a new earnings stream to an already profitable joint venture at relatively modest capital cost
The case against continued growth
The FY26 comparable is tough — strip out the £7 million Tungsten West one-off and the headline profit figure is materially lower. FY27 will need strong underlying performance just to stand still
HS2 risk — the programme has already been curtailed once. Further scope reductions or delays would reduce activity levels and hit Services revenue directly
Sizewell C dependency on Hinkley Point C — Sizewell’s construction pace is partly tied to progress at Hinkley, which is running years behind schedule. A repeat performance would slow activity on site
Lower Thames Crossing timing — already pushed back to 2034. The main earthworks contract Hargreaves is pursuing is not yet confirmed. It is a pipeline opportunity, not booked revenue
German macro exposure — HRMS operates in an industrial economy that has been under sustained pressure. Pig iron pricing and steel waste volumes are outside Hargreaves’ control
Zinc plant execution risk — construction projects in foreign jurisdictions have a habit of running late and over budget. The grant funding helps, but €18 million of capital is still real money for a business this size
CEO transition — Simon Hicks takes over on 1 August 2026. A change of leadership after twenty years always carries some execution risk, even a well-managed one
The overall verdict: the structural drivers are intact and the pipeline is credible. But investors should expect steadier, more modest growth in FY27 rather than another step-change year.
What do we think the Business Worth?
To pressure-test the valuation we ran a simple discounted cash flow across three scenarios, using a WACC of 10.5% to reflect the AIM risk premium, a terminal growth rate of 2.0%, and a five-year forecast period from FY27 to FY31. FY26 normalised profit strips out the £7 million Tungsten West one-off from the £33.4 million consensus figure, giving a base of approximately £26.4 million.
