HARGREAVES SERVICES (AIM:HSP) – attractive IHT planning stock or value trap?
Preliminary results for the year ending 31st May 2014 from the UK's leading supplier of solid fuel and bulk material logistics, looked satisfactory and the strategic review suggests better things might be around the corner. However, the shares have been in the doldrums for sometime and it’s hard to see much to attract traditional AIM buyers!
Continuing revenue was up 3.1% to £869m, continuing underlying operating profit + 6.8% to £59.5m and continuing Diluted EPS +10.1% to 122.2p. The dividend was lifted 24% to 25p with analysts predicting that it will broadly stay at that level for the next few years. Net debt reduced to £68.8m at year end (£77.9m prior year) with net gearing a seemingly manageable 45.9% (66%). As at 31 May 2014 interest cover was 15.1 times, comfortably over the covenant minimum of 4 times and leverage was 1.0, comfortably under the maximum 2.5 times permitted. Debt reduction is enhanced by the short…