Conditional Contract Exchange and Covid-19 Update

Hargreaves Services plc

("Hargreaves" or the "Group")

Major Conditional Contract Exchange at Hatfield and Covid-19 Trading Update

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the industrial and property sectors, announces the exchange of a major commercial property development contract and provides an update on the impact of Covid-19 on recent trading.

Unity Development Announcement

Hargreaves Land, the Group's property development business, is pleased to announce the exchange of the first major commercial contract on Unity, a mixed use development site located at Hatfield, South Yorkshire and ideally situated adjacent to junction 5 of the M18. Unity is a joint venture with regional developer Waystone Limited and consists of 250 hectares of land of which 60 hectares is allocated for employment and commercial uses with the remainder having planning consent for residential development.   

The joint venture has exchanged conditional contracts for the sale of a 32 hectare (79 acre) plot to a national retailer for the development of a 75,000 sq metre (800,000 sq ft) national distribution centre and training facility. The sale, which will realise approximately £25m of revenue for the joint venture on legal completion, is conditional upon the grant of planning permission and construction of a new access road which will provide direct access to junction 5 of the M18. Legal completion is currently expected around the middle of 2021.

David Anderson, Hargreaves' Group Property Director, said: "We are delighted to exchange contracts with this leading national retailer on the first major commercial transaction at the Unity scheme. The decision to base one of their key distribution hubs at Unity underlines the quality of the location from a logistical perspective.  In addition to the 190,000 sq metres (2m sq ft) of commercial and industrial consents, we also have planning permission for 3,100 residential units at the site. We are encouraged by the ongoing level of interest in the scheme and look forward to building on this momentum over the coming year and beyond."

Covid-19 Trading Update

On 26 March 2020, the Board reported that trading was in line with our expectations, with no meaningful impact to date on the Group's trading activities as a result of Covid-19. Now that we have experienced a further month of trading under Covid-19, we can confirm that all business areas are continuing to trade in line with expectations with the exception of our Property business.

As a result of our contractors ceasing infrastructure work on the development site at Blindwells, near Edinburgh, due to Covid-19, the planned residential land sales to Bellway Homes and Cruden Homes, which were previously expected to complete in May 2020, will not take place in the current financial year. Until work on site is restarted, it is not possible to put any definitive timescale on this deferral.

The Board expects to provide a further update on trading in early June following the end of the current financial year on 31 May 2020.

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