Profit growth in tough times for Styles & Wood

SHOPFITTING and property services group Styles & Wood increased pre-tax profits last year despite a dip in sales.

In the year to the end of December the Altrincham group said revenue slipped 4% to £97.9m but underlying pre-tax profit was up 11% to £2m.

After stripping out one-off costs, such as £200,000 in redundancy payouts and £1m in finance charges, pre-tax profit was up 68% at £800,000.

The firm said it had benefited from a decision to diversify away from its core retail market to target sectors such as banking, public sector and commercial office work. Banking – it is working with Lloyds and Barclays – commercial and the public sector accounted for 75% of all revenue, up from 58% in 2011. The balance came from the retail sector.

However, it said market conditions remained challenging, “and show few signs of an imminent recovery”. The order book is up 10% on the same period last year but orders have slowed in recent weeks and the company warned that investment in new markets, combined with impact of competition, was putting pressure on margins.

Chief executive Tony Lenehan said: “The improvement in both underlying profit and earnings per share reflects our success in maintaining a selective approach to new opportunities, whilst simultaneously investing in the future.

“We have seen the impact of the group’s diversification strategy being realised with a significant level of business being delivered from new strategic sectors. Although our order book is ahead of last year, market conditions in the first quarter of 2013 have been challenging and competitive pressure remains strong.

“We are confident that the group’s portfolio of property support services across a number of sectors will provide a solid foundation for sustainable profitable growth as and when the market recovers.”

No dividend has been proposed. Earnings per share were 0.5p, up from 0.1p.

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