Record results for Clugston to build a future on
THE Clugston Group’s chief executive has said that “going against the grain” has helped the firm reach the best results in their 78-year history.
The group, which consists of facilities management and logistics divisions as well as construction, has had record year with turnover increasing to £252.9m from £231.2m.
Although pretax profits of £3.3m for the year to January 31 were a dip on last year, Stephen Martin, chief executive of the Clugston Group, who spoke to TheBusinessDesk.com, was optimistic about their position.
He said: “Some of our contemporaries are struggling, its a challenging environment within the industry. Pricing is becoming increasingly competitive, and people are desperate for work – they will take whatever they can get.
“Thankfully we’ve gone against the grain in the current climate of tighter margins – we’ve specialised in what we’re good at.
“A few years ago we made a plan to stick to our best markets. Our biggest market for the construction division is the renewables sector. There are massive opportunities there, and also education. We’re working on several schools and higher education establishments in the region at the minute.”
This strategy seems to have worked; Clugston’s construction division increased turnover from £136.7m to £143.3m this year.
The uncertainty in the renewables sector is a worry, but only for the future.
“We’ve not had too many issues yet with the renewables subsidies cuts. But the projects we are working on have been in planning for a long time and have already secured finances,” he said, and the group is prepared for “subsidies to restrict the flow of work into the company in future.”
With casualties in the construction sector of late, such as Hewletts and Southdale, as well as the Shepherd Group culling its housebuilding divisions, what does the future look like for Clugston?
Mr Martin said: “Every year for four years we’ve hit record results the fourth consecutive year of growth. We might be in the same place next year – we said we might not beat our results last year, and we managed to again, so who knows!”
“We’re definitely going to build up facilities management business which we only set up a few years ago. We’ll also build up logistics and property investment, on our own and through joint ventures.”
The logistics division is already doing well, increasing turnover from £13.2m to £15.3m after an investment of £2m.
The firm is working on a major scheme for Veolia in conjunction with Leeds City Council.
The renewables site will take bin waste of around 215,000 tonnes a year to provide 15 megawatts back into the grid and power 20,000 homes and businesses in the Yorkshire region. The building has the tallest timber frame structure in Europe at 42m high.
The firm’s Park Row development, delivered in conjunction with Wilton developments, just sold for £9.3m to F&C UK property fund with a yield of 5.4%, and Clugston is also working on Humber University Technical College.
It hasn’t always been an easy ride for Clugston though.
“Over my nine years as chief executive at Clugston,” Mr Martin said, “some of the biggest challenges have been the government changing policies every so often, on things such as renewables subsidies, investment in schools and education. They seem to change their priorities all the time.
“The construction industry in particular has peaks and troughs, but during the recession, major projects were being cancelled weeks before work started. The industry always goes through peaks and troughs. Clugston has been around 78 years so we know we have to do and are prepared for the next trough.”
With offices and operations in Leeds, Haydock (St Helens) Ashbourn, Stockton-on-Tees, Bromsgrove, the Scunthorpe-based group employs 620 staff (and that number doubles if you include subcontractors) with around 230 staff in Yorkshire.
