Hargreaves Services has confirmed plans for a 'historic' six-fold increase in its interim dividend, after making “considerable headway” on the project to buy out the group's defined benefit (DB) scheme.

The group's interim results confirmed that there has been significant progress on its efforts to reach a potential buyout, with the most recent estimate from the group suggested that the cash cost to buy out the scheme will be no more than £9m,

This payment is expected to be made in the first half of calendar year 2024 out of existing cash reserves, removing the requirement for the group to pay an ongoing £1.8m per annum to support the deficit.

With this requirement for annual contributions removed, Hargreaves confirmed that these annual cash flow savings will instead be used to support an increase in the sustainable dividend to our shareholders.

Indeed, Hargreaves board announced that, due to the progress made with the pension scheme buyout, combined with the additional sustainable cash receipt from HRMS, it has agreed a "historic" six-fold increase in the interim dividend.

Commenting on the interim results, Hargreaves Group chair Roger McDowell said: "I am delighted we continue to deliver value for our shareholders through a substantial increase in the interim dividend.

"This demonstrates not only the value created by the strategic initiative set out at the year end to remove the pension liability but also the recurring revenue stream generated by the group's services business unit underpinned by the substantial cash returns from our German joint venture and good prospects for Land."

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