Hargreaves Services has posted pre-tax profits of £34.5m, with strong growth in its services arm as its HS2 contract commenced.

For the year ending 31 May 2022, the industrial group also saw a reduction in its overall revenue to £177.9m from £204.8m in 2021, partly due to it halting its material coal activities, which accounted for £55.8m last year.

However, profit increased significantly from 2021’s £14.4m, which predominantly came from its major earthmoving contract on HS2.

The company now has 350 people working on the project with almost 300 items of plant being put to work.

It said it had also developed a solution to reduce carbon emissions, with the installation of an overland conveyor system to remove excess material from the site. This should see the elimination of 78,000 HGV movements.

Hargreaves said: “Profitability within services has remained weighted to the second half of the year; however, in the coming year this is likely to level out as the work undertaken on HS2 provides greater profitability in the summer months, reducing the seasonality.”

The group added: “The logistics operation was impacted by the well-publicised HGV driver shortage as well as the rising price of fuel. The impact of driver shortages has now been largely overcome.

“The team was able to mitigate the fuel price challenges through strong customer relationships and the application of contractual escalation factors, which protected the group from the worst of the potential impact.”