A green light for the HS2 rail project would create and safeguard hundreds of jobs at major North East employer Hargreaves Services.
The former coal company, which is headquartered at Esh Winning in Durham, employs more than 2,000 people across its distribution services, industrial, property and specialist earthworks divisions.
It is hoping to create a raft of roles after being being selected as a preferred supplier by one of the major consortia for work on the construction of the HS2 high speed rail infrastructure.
READ MORE: {}
The work would provide a lift for the company’s specialist earthworks division which, following the conclusion of site works on its major civils contracts and following the liquidation of its Wolf Minerals firm, has seen revenues drop from £49.9m to £17.9m in interim results for the six months ended November 30 2019.
The firm said that future major earthworks business opportunities are being pursued, including participation in the HS2 project, but added: “The timing of many of the projects is uncertain and are often subject to political decisions, however the business is well placed to provide what is a specialist capability in a market with a small number of potential suppliers.
“Costs have been managed down to a minimum level whilst preserving the capability necessary to address HS2 and other opportunities as they arise.”
Hargreaves chief executive Gordon Banham said the firm is positioned to pick up a big chunk of work on the HS2 and that it expects to hear an update from the Government in the next month.
He said: “That will be a big kick-up for us and for a lot of people who used to work in coal mining who can use their skills on the new project.
Most Read
“We’ll need 450 people for that so there will be a big recruitment exercise. They will be based at Esh Winning and we’ll actually look at moving some of the mining teams.
“We are a North East PLC and the HQ will always stay in the North East as long as I’m CEO. When coal was in its eminence we were a main party and we are now a development and services business.
“Investment in the North East is an important theme for us and we’ve got to bring in good quality jobs, not low earning jobs, and that’s what we hope to do.
“It’s difficult to say how many new jobs will be created but it will need more than 400 people, a lot of whom will be based at the site. That doesn’t mean we won’t have people based in Durham – we are looking at accommodation. We will look after our own people first.”
His comments came as the firm provided a positive set of half-year results to shareholders in which underlying operating profit increased by 19% to £2.5m and its margin improved to 2% from 1.3%.
The pre-tax loss of £6m from November 2018 was also converted to profit of £5.2m.
Revenues fell from £167.9m to £124.7m, primarily from the completion of contracts in the specialist earthworks business. The comparative period also included over £8m of revenue from Wolf Minerals Limited, which was liquidated in October 2018.
Don’t miss
The results also detailed how the group has continued to deliver services to British Steel, resulting in a £400,000 release from the exceptional provision made in the prior year.
Since the announcement last May that British Steel had gone into liquidation, putting it in the hands of the Official Receiver, Hargreaves Services’ 海角视频 Industrial Services activity has contributed £7m of revenue and £600,000 of operating profit during the period.
The results also reveal how the firm’s German associate business HRMS snapped up 94.9% of DK Recycling und Roheisen GmbH from DK Holdings GmbH for just €1, or 85p.
The board decided to maintain the interim dividend at 2.7p, which will be paid to shareholders on April 6.
Mr Banham also said the firm’s growing property and regeneration division Hargreaves Land – which has grown its senior team from 10 to 20 people – is exploring a number of development opportunities.
Three regional offices are being created, in Scotland, Yorkshire and the North East, covering the areas where it has particular focus.
The firm has also entered into a joint venture on a mixed use scheme in Gateshead and progress is being made in Hatfield and Blindwells, East Lothian, amongst others.
Mr Banham added that further projects in the region are expected to be announced.
“There are a number of parties we are in discussions with in terms of land development but they are in the early stages, but by July we expect to see more visibility.”