Hargreaves Services (LSE:HSP) expects to receive a £10 million cash inflow following Tungsten West’s recent fundraising. The total includes £3 million in accelerated deferred consideration tied to the company’s 2019 sale of the Hemerdon tungsten and tin mine, as well as a £7 million compensation payment related to the termination of its Mining Services Contract.
The immediate payment of the remaining £3 million deferred consideration will release security over the mineral lease and replaces previously anticipated annual revenues of £1 million that had been scheduled for FY27 and FY28. Meanwhile, the £7 million compensation payment—expected to be received by May 2027—will be recorded as a one-off gain in the current financial year. The revised arrangement effectively accelerates and reduces the risk associated with future cash flows. Hargreaves also noted that its overall trading performance remains in line with expectations and that the ongoing Middle East conflict has not affected its operations.
The restructuring of the Hemerdon-related cash flows decreases the group’s reliance on longer-term mining services income while strengthening near-term balance sheet flexibility. Management added that discussions with Tungsten West are continuing regarding potential future involvement at the mine, suggesting that Hargreaves could still play a strategic role even after stepping back from direct mining operations.
The company’s investment outlook is supported by strong financial performance, including robust growth and cash generation alongside relatively low leverage. Technical indicators also appear constructive, with the share price trading above key moving averages and supported by a positive MACD signal. Valuation metrics are another positive factor, reflecting a low price-to-earnings ratio and an attractive dividend yield. Management commentary from recent earnings discussions also highlighted capital return plans and operational momentum, although execution risks remain around the group’s land and renewables developments and its zinc project.
More about Hargreaves Services
Hargreaves Services plc is a diversified UK-based group operating across environmental, infrastructure and property markets in the UK and South East Asia. Its Services division provides materials handling, mechanical and electrical contracting, logistics support and large-scale earthworks. The company also operates Hargreaves Land, which focuses on brownfield site redevelopment, and maintains a German joint venture involved in specialist commodity trading and steel waste recycling.
Leave a Reply