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(Sharecast News) - Hargreaves Services said on Monday that it has completed the sale of the first tranche of its renewable energy land assets to Meadow Partners for an initial 8.8m, marking a key step in its strategy to monetise its renewables portfolio.
The AIM-traded firm said the disposal covered land in South Lanarkshire, Scotland, which generates rental income from two wind farms and three access agreements, producing 0.7m a year, including a 0.2m variable top-up linked to wind yields.
A further contingent payment of up to 5m was due by September 2029, with the company expecting around 3.8m based on average yield performance.
The assets sold formed part of a broader renewable energy land portfolio independently valued by Jones Lang LaSalle at a minimum of 27m in July.
Hargreaves said the tranche sold represented 12.6m of that valuation and 4m of book value.
The total expected consideration of 12.6m aligned with the independent valuation.
Hargreaves said the transaction was expected to deliver a one-off benefit of 3m to pre-tax profit and boost cash by around 8m in the financial year ending 31 May.
Chair Roger McDowell said the sale marked the start of a broader disposal programme.
"We are delighted to announce this initial transaction in relation to our portfolio of renewable energy land assets," he said.
"This sale represents the first phase in the group's strategy to realise cash from these assets, and we are currently evaluating different mechanisms to return this cash to shareholders.
"This transaction marks the beginning of a number of material disposals from our developing renewables portfolio, which we intend to deliver for shareholders in the coming years."
Consensus market expectations for the year to May 2026, prior to the update, stood at revenue of 270.9m, underlying pre-tax profit of 21.4m, earnings per share of 53.6p and year-end cash of 26.2m.
At 1218 BST, shares in Hargreaves Services were up 0.39% at 660.54p.
Reporting by Josh White for Sharecast.com.