HT Forrest sees sales soar on back of expansion

SOCIAL housing building contractor Herbert T Forrest says it has managed to increase its annual sales by 20% to £45.3m, because of its strategy of diversification. 

The company, which is headquartered in Preston, has traditionally planned maintenance work for residential social landlords in the North West.

As well as securing more than £4m in new contracts through its newly opened Leeds office, the firm said the proportion of reactive maintenance contracts secured with clients had increased significantly.

It has also successfully tendered for maintenance contracts for public buildings worth more than £7m over the next four years.

In the 12 months to the end of August 2008, the company – which was backed by private equity firm LDC in July 2007 – reported sales of £45.3m, up from £37.8m last time.

Operating profit – at £4.5m – was in line with the previous year despite sales growth, due to one-off investments in geographic expansion, business development and information technology.

The company said its secured order book for the current year stood at £40m. It also expects to deliver another year of growth as conditions for social housing contractors remain encouraging.

In Wednesday’s Budget, measures were unveiled which will help the sector, including £100m for local authorities to help pay for social housing, which the Government said would help deliver an extra 10,000 homes.

Tim Forrest, managing director of Herbert T Forrest, said: “The business has continued to perform strongly thanks to the implementation of our three-pronged growth strategy of new geographies, new services to existing clients and new markets.

“2008 was a good year but during the last six months our markets have become more challenging. However, I believe that our investment programme will enable us to deliver further growth over the coming years, while our existing skill sets in planned maintenance work are helping us secure reactive maintenance contracts with major clients across the north of England.”

Jonathan Bell, investment director at LDC, said: “Indicators for social housing and other public sector investment remain positive despite the slowdown in the wider construction market.

“While other parts of the sector are coming under increasing price pressure, margins have also remained resilient thanks to client and contractor focus on operating efficiencies, quality and the long-term nature of procurement relationships.”