LONDON (ShareCast) - (Sharecast News) - Industrial and property service provider Hargreaves Services updated the market on the successful financial close of the Westfield energy-from-waste plant on Friday, to be constructed by Brockwell Energy on a site in Fife, Scotland, owned by Hargreaves.
The AIM-traded company sold its shares in Brockwell in October 2018 for initial gross proceeds of £21m, resulting in a profit of £5.2m.

As it said at the time, a further £2m in cash would become payable to Hargreaves following the successful financial close of the energy-from-waste plant.

A key aspect of the sale in 2018 was the "careful selection" of a partner which would be committed to the successful longer-term development of the renewable energy portfolio held by Brockwell.

Many of those renewable projects would be on land Hargreaves owns, and thus the successful development of the projects would help to maximise the value of the underlying land retained by the group.

As well as the £2m additional receipt, which would be recorded as discontinued in the firm's income statement, the group said it would now benefit from a lease to Brockwell for a minimum term of 35 years.

The annual index-linked rental started at £0.11m per annum, and would increase to £0.42m per annum following the construction of the energy-from-waste plant, but no later than 2025.

Hargreaves said it would invest £7m in the Westfield site over the next 12 months to deliver services to the eight acre plot for Brockwell.

In doing so, a further 40 acres of employment land will be serviced.

That land could accommodate a "broad range" of industrial users, which would be able to benefit from "potentially cheaper energy" delivered by the plant.

The company said the Westfield site also contained around 50 further acres of developable land.

"The board is delighted to see the progress made by the Brockwell team with whom Hargreaves continues to have a strong relationship," said non-executive chairman Roger McDowell.

"This is another positive step towards maximising the inherent value of the group's existing renewable land portfolio."

At 1121 GMT, shares in Hargreaves Services were up 3.98% at 405p.

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