Major contract with UK Deposit Return Scheme

Hargreaves Services plc (AIM: HSP), a diversified group delivering services to the environmental, infrastructure and property sectors announces the successful award of a 15-year contract providing logistics services into the recently announced UK Deposit Return Scheme (“DRS”).

Following the previous announcement on 30 September 2026 of preferred bidder status with Re.Group, Hargreaves has now entered into a 15-year logistics contract with Re.Group, the Australian recycling and resource recovery company, to provide collection, transport and transfer station services for the DRS in Scotland. Under the contract, Hargreaves will be responsible for the collection and movement of returned drinks containers from retail return points across Scotland to designated processing facilities. The contract includes annual CPI-linked indexation and fuel cost adjustment mechanisms providing long-term earnings visibility and margin protection.

The DRS is due to be introduced across England, Scotland and Northern Ireland by 1 October 2027. The scheme aims to reduce litter, increase recycling rates and support a circular economy by incentivising the return of single-use drinks containers.

The contract with Re.Group will commence October 2027 and is expected to have a positive impact on FY28 performance, before its full impact in FY29. For FY29, the Board would expect to report revenue and profit before tax moderately ahead of existing market expectations*.

Commenting on the contract, Simon Hicks, Chief Executive of Hargreaves Services plc, said: “This is an important contract for Hargreaves and represents a significant step forward in the development of our Environmental Services capabilities. The award provides long-term, inflation-linked revenue, attractive earnings visibility and establishes the Group at the heart of one of the UK's most important recycling initiatives.

"We are delighted to be partnering with Re.Group and look forward to delivering a high-quality logistics solution that supports the successful implementation of the Deposit Return Scheme in Scotland, creating a strong platform for future growth in recycling, resource recovery and wider environmental services.”

* The Company considers consensus market expectations prior to the release of this announcement for the year ending 31 May 2028 to be revenue of £309.2 million, underlying PBT of £18.8 million. For the year ending 31 May 2029 to be revenue of £323.2m and underlying PBT of £20.4m.