Hargreaves Services is confident it can rebuild turnover and profit in its logistics business after the division suffered a 47% drop in operating profit to £2.3m last year.

Turnover in its logistics operation fell from £68.3m to £54.5m in the year to 31 May 2016, which it mainly attributed to changes in waste movements following a clarification of waste classification by HMRC.

It said the sale of Imperial Tankers to Sutton Group in 2014 accounted for some £7.3m of the drop in turnover.

It also experienced reduced coal and rock salt volumes during the year as a result of the mild winter weather.

Hargreaves Services - which in April signed a lease on a depot in Harlow, Essex - said it was encouraged by recent trading and every effort was being made to optimise its fleet operations and manage overheads.

It said: “Our logistics business had a difficult year, however we are confident it is a business with long term profit potential.

“Logistic volumes have not returned to the level enjoyed in the previous financial year and it is unlikely that these will fully recover before the end of this financial year, however the team is confident that the opportunity is there to re-build revenues and profits.”

A £7m earthworks project the division was due to be working on was delayed last month following the EU referendum result.