Hargreaves Services’ logistics division has felt the impact of Brexit, after a UK port delayed a £7m earthworks project in light of the EU referendum result.

In a trading update the company warned that its transport and earthworks divisions are at risk due to their exposure to the construction sector and to public sector projects, many of which could be delayed due to the economic uncertainty caused by Brexit.

The trading update stated: “On a negative note the group has been informed that a £7m earthworks project at a major UK port has been postponed owing to Brexit-related concerns.

"The current uncertainty associated with Brexit presents potential risks for our Earthworks and Logistics businesses, which have a significant exposure to construction activity and capital investment projects.”

The company said it is difficult to assess what the impact of the vote to leave the EU will be on its logistics and earthworks divisions in the medium term.

It added that it considers, “the risk of a downturn in private sector activity as against the potential upside from Government-sponsored public sector works to reflate the economy to be relatively finely balanced”.

On the upside, the company said the fall in the value of sterling following the EU referendum result could bring benefits to the value of its stocks of dollar-denominated coal and coke.

“No revaluation gains have been booked to date, but if the current exchange rate trends continue the group should benefit as and when these stocks are realised,” the company said.

Hargreaves Services’ logistics business has suffered a rough ride for some time. In 2015 its profits plunged by more than £1m and its revenues fell £9m year-on-year, from £37m to £28m after the company was hit by a perfect storm of adverse conditions in the coal, steel, construction and waste markets and unseasonably warm winter weather.

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