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(Sharecast News) - Hargreaves Services said in an update on Wednesday that the services sector had a robust start to the year, as it boasted more than 60 term and framework contracts with clients.
The AIM-traded firm, which was holding its annual general meeting, assured shareholders over the recent cancellation of the northern section of HS2 by confirming that it would not affect its UK services business.
It said the existing contract for the first phase of HS2, from London to Birmingham, was on track and was expected to generate revenue for at least the next two years.
No revenue had been factored into forecasts for the second phase of HS2 due to uncertainty around its timing and certainty.
The board said the services business remained focused on securing contracts at major earthmoving sites and expanding its portfolio of contracts.
Hargreaves Land, meanwhile, maintained its focus on realising value from renewable energy land assets, with the first four months of the year seeing ongoing developments in the sector.
The business was well-positioned to meet its full-year targets, the board reported, including a previously-announced contracted sale of 20 acres of serviced residential land, set to be completed in January, with a total consideration of £18.5m payable in four instalments over three years.
HRMS, however, experienced a slowdown in trading activity and a decrease in commodity prices.
Consequently, results in the first half of the current financial year were expected to be lower than the previous year.
The firm said the progress to buy out the group's defined benefit pension scheme was advancing positively, with expectations of completing the liability buyout by the end of the 2024 calendar year.
As of 30 September, the group held £16m in cash, with outstanding leasing debt of £31m, while the balance sheet remained free from any bank debt or third-party security.
At 1218 BST, shares in Hargreaves Services were up 4.56% at 418.75p.
Reporting by Josh White for Sharecast.com.
