ProService Building Services Marketplace (PRO) H1 2024 earnings summary

Executive summary

• Revenue grew 3.2% year-over-year to £170.8m in H1 2024, outperforming the market despite seasonal weakness and softer demand in some end markets.

• Full legal and operational separation of HSS ProService and HSS Operations to be completed by end of September 2024, each with distinct strategies and management teams.

• ProService marketplace adoption accelerated, with buyers up 38% year-over-year and strong growth in new verticals; Operations expanded its network and maintained strong utilisation.

• Sale of Power businesses completed in March, with proceeds used to reduce debt and strengthen the balance sheet.

• Interim dividend maintained at 0.18p per share, reflecting board confidence in the financial position.

Financial highlights

• Adjusted EBITDA was £26.9m (H1 2023: £28.9m), and Adjusted EBITA £7.3m (H1 2023: £10.8m), mainly due to seasonal product weakness and increased technology costs.

• Adjusted profit before tax fell to £1.2m from £5.0m; adjusted basic EPS declined to 0.13p from 0.55p.

• Net debt reduced to £37.9m (non-IFRS16), down from £55.1m, supported by the sale of Power businesses.

• ROCE decreased to 14.9% from 18.0%, mainly due to seasonal performance.

• Underlying cash conversion remained above 100%, with liquidity headroom of £75m.

Outlook and guidance

• Guidance is withdrawn during the transition period due to the complexity of the business split and organisational changes.

• Market remains challenging with no post-election demand rebound; lead indicators and macroeconomic data suggest growth into next year, but current trading is flat.

• Large contracts won over summer are expected to mobilise by end of Q4 or early next year.

• Capital Markets Days for each business planned in 2025 to update on growth strategies.