Construction group returns to profit despite revenues hitting a 20-year low

Construction group GF Tomlinson recorded its lowest turnover in 20 years after a very challenging year of widespread delays in the construction sector.

However newly-published accounts for the Midlands group showed a return to profit, making £238,000 after a £2.7m pre-tax loss the year before.

Its £66m revenues were “less than 50% of what we would normally expect”, said the group’s chairman and managing director, Andy Sewards.

But he is expecting a huge improvement in the year to June 2024 and “a substantial increase” in profitability.

The annual accounts were signed off in December, although only published on Saturday. In December, nearing the halfway point of its financial year, the group was forecasting that its building division would generate around double its 2023 revenues, to more than £110m, and plant hire would contribute another £15m.

Sewards blamed inflation, caused in part by Ukraine, for rising costs and delayed projects in its 2023 financial year.

Contract awards and start dates were held back as clients sought to find value-engineered savings or additional funding.

Clients’ staff working from home also “considerably extended the tender decision process”, he said.

Sewards added: “Considering the very much reduced turnover and contribution together with the proportionally higher overhead, we are pleased to report that our building company returned to profit.”

The Derby-headquartered group reduced its staff numbers and saved nearly £2m on its wage bill in the year, but it retained key staff “to enable us to be in [a] strong position going forward”.

GF Tomlinson was reappointed to Pagabo’s national framework for four more years, and won a place on the Procure Partnership Framework. It also continued projects for public sector clients, in education and health.