The managing director of Hargreaves Services said the group was “on the rise” after five difficult years of transitioning away from its roots in the coal industry.
Gordon Banham, who owns 8% of the shares in the multi-faceted group, said his team were drawing on the steelmaking and coal mining skills cultivated in the North East in the UK and the overseas on a wide range of projects including HS2, metal recycling and wind farms.
Hargreaves is currently bidding on two major contracts, an £50million earthworks at the upcoming Sizewell nuclear power station and another £80 project on the construction of the Lower Thames Crossing. The two contracts would represent a “breakthrough” for the company, which shipped its last “Newcastle coals” in 2021 and has around 50 contracts across three key divisions: Land, Industrial Services and Commodities.
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At its peak, Hargreaves Services employed almost 8,000 people and since diversifying away from coal, the business now employs almost 1,500 people across the North East and internationally. Some of those who remain have been with the company for 40 years and Mr Banham says the team has shown a strong resolve to adapt and change.
Mr Banham said: “We had a tough five years in our transition – coal was in the DNA that ran through our business. We mined it, we hauled it, we took it to power stations and we have worked in those power stations.
“Our industrial services division is made up of people who used to work in steel mills such as SSI in Redcar and coal-fired power plants that have now closed, and now they work in green space. For example, we do all the material handling at the Port of Tyne for biomass feed to Lynemouth Power Station, we work at CF Fertilizers in Billingham, we work at Drax – and we’ve brought that expertise overseas where we work at a steel mill in South Africa and we have a large operation with between 200 -300 people in Hong Kong where we are responsible for running the power plants there.”
The Hargreaves team also used their skills to turn around a German pig iron and zinc production plant they acquired in 2019 – DK Recycling – which was losing around £5m a year at the time and this year, Mr Banham said, will post profits of more than £20m. Closer to home, Hargreaves is behind all the earthworks on a major section of the HS2 project near Aylesbury – the group’s biggest contract worth over £175million in revenue and with inflation-proof “cost plus” terms.
Mr Banham added: “We have deployed the mining expertise of the North East team – many of our foremen are there, as are the trainers needed to teach people how to drive these big earthmoving vehicles. Skilled managers have come from our former coal mining operations in the North East and Scotland.”
A strong cash position has enabled Hargreaves to invest in its staff – providing pay raises, higher pension contributions and life insurance coverage for all of its employees. And in the absence of bank debt, Mr Banham said no decision had been made on whether part of the £15m Hargreaves currently has would be used for acquisitions or returned to shareholders through redemptions.
The company’s land business – built around a substantial portfolio comprising 17,000 acres in Scotland – has spawned housing and commercial property projects as well as extensive tenancy agreements with wind farm operators – which have driven Hargreaves to house around 1% of the UK’s energy production on its land.
Mr Banham said: “I am very proud that we are a business based in Esh Winning which started as a transport business on an old coal mine site, it grew, it was listed as a business almost 20 years ago and it was overwhelmingly in coal, obviously that legacy of coal has gone and I’m particularly proud of my team because if you look at all the big companies – UK Coal, Scottish Coal – they all went bankrupt and we survived.”