Construction firm marks 80-year milestone with solid results in challenging market

Construction group Clugston has turned in a solid set of results despite “challenging markets”, recording a £1m pre-tax profit on a turnover of £118.2m for its 2016-17 year.

A number of delayed starts to projects, which are now underway,  saw turnover dip 18% from £143.4m in 2016, however, the group said it maintained a robust balance sheet with cash reserves of £18.1m.

The business, which has operations in construction, property development, logistics and facilities management, said it also built up a healthy forward order book together with a strong pipeline of new opportunities.

Construction, which recorded a turnover of £101.6m, delivered projects over a range of sectors, with significant building work secured and delivered in education, extra care, and retail. During the year, notable projects included the IKEA store in Sheffield, the company’s largest ever retail project, and the completion of one of the first new Jaguar Land Rover showrooms for Duckworth JLR in Boston.

Meanwhile, civil engineering projects continued apace in the energy from waste sector where major developments were completed at Leeds and Wilton and new contracts started during the year in Kent and in Deeside, North Wales. The contractor also made a return to the water sector securing work at Yorkshire Water’s Knostrop Works through Black and Veatch.

During the year, the facilities management division secured new contract work for Siemens at Green Port in Hull, where the construction division recently completed the maintenance support building at this major site for the manufacture of offshore wind turbines. The division also renewed a key contract to provide hard and soft support services to Vivergo, at the company’s largest biodiesel refinery at Salt End in Hull.

Clugston’s logistics division maintained a strong turnover of £16.1m, with operating profit reducing marginally by £0.2m, reflecting challenging trading conditions in the sector. The division’s petroleum operation expanded further with 18 vehicles now in service and an additional three vehicles being delivered in summer 2017. The bulk food fleet has also been successful in securing new clients in the North West, South East and Midlands, with plans to expand the fleet size during 2017.

Clugston’s property division had a particularly positive year, effecting transactions at Redhouse Interchange where it completed the sale of 17 acres of land to an occupier after gaining planning permission for a 300,000-sq ft warehouse. As part of the transaction, the property division has entered into a development agreement to construct the warehouse, leaving the company with 2.8 acres of land which is now under offer.

Robert Vickers, Clugston’s recently appointed chief executive, says: “Whilst a challenging year, primarily due to delayed projects, our strong results are a reflection of the quality of our people across the Group. We have delivered another strong financial performance, with solid profitability, substantial cash balances of £18m and no bank borrowings.”

“The forward direction of the Group will continue to focus on key relationships with our customers, thereby ensuring we maintain standards of service that exceed expectation to further reinforce the reputation Clugston has built over 80 years of trading.

“We remain very positive about the opportunities to grow the business and with a forward order book already secured sufficient to generate a turnover in excess of £170m this current term, we are well positioned to capitalise on the growth potential in our target markets, with a substantial pipeline in place for the following years,” Vickers added.
Robert Vickers, Clugston Group chief executive (David Lee Photography)

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