Construction firm posts rise in revenue but profit falls
Lancashire based property and construction firm Eric Wright Group saw pre-tax profit fall by nearly a quarter despite revenue rising almost a third to £223m.
The rise in revenue last year was principally driven by greater activity in the civil engineering, water and construction businesses, the company said.
For the year to the end of December, overall turnover increased to £223.2m up from £170.4m the previous year, while profit before tax came in at £7.7m, down from £10m.
Speaking about the results, Gill Chadwick, Eric Wright Group finance director, said: “Although we have seen a drop in overall profit, underlying trading remained strong with improved profitability in a number of key divisions. We continue to make good progress in meeting our group targets and expanding our customer bases whilst at the same time developing the existing relationships which have underpinned many of our successes.
“The group has also benefited from the commercial strength provided by the diversity of its core activities. Whilst general economic conditions during 2019 continued to create challenges, the stability afforded by our diversity and the strength of performance from our investment property portfolio provided us with substantial resilience and gives us confidence for the future, notwithstanding the unprecedented place we all found ourselves in as 2020 began to unfold.”
She added: “The property portfolio again performed well with a number of new lettings and positive rent reviews, contributing to an improved rent roll. In addition to net acquisitions in the year of £6.3m, there was a revaluation gain of £1.5m bringing the total value of investment property to £72.0m, which was an increase of £7.8m on the previous year.”
Eric Wright Civil Engineering has returned to profit as a result of the board’s strategy to improve turnover levels through expanding the customer base and increasing average project size. The division has secured and delivered a number of high-profile projects which are critical to the country’s infrastructure.
Eric Wright Water also saw an increase in turnover to £50m (2018: £41.8m), with profit before tax of £0.7m (2018: £0.2m) reflecting continued expansion of the businesses geographical reach and presence on key frameworks.
Some sectors such as construction continued to face industry-wide challenges. Despite this, activity levels were sustained and the senior team made some significant progress towards exiting some of the more problematic contracts.
Turnover increased in 2019 to £105.8m (2018: £74.1m), principally as a result of start dates on a number of projects being delayed from previous years. Despite the increase in turnover, the challenging environment within the sector and the completion of two underperforming contracts resulted in a loss.
Construction ended the year with an order book in excess of £100m.
Maple Grove Developments continued to make good progress developing commercial property across the North, with profit before tax up to £1.8m from £1.1m in 2018.
Jeremy Hartley, managing director of Eric Wright Group, continued: “The group ended 2019 with excellent progress across all of its core business activities resulting in another strong financial performance and a robust balance sheet despite some obvious market challenges.
“The focus for 2020 will be to maintain an active, ongoing response to the changing environments within each business area and to prioritise the safety and wellbeing of our staff.
“Given the unforeseen and far reaching difficulties presented in 2020 by Covid-19, each division is faced with its own unique challenges as we trade into a very changed world. We are fortunate to operate in a number of sectors where the demand has proved resilient and we have a strong financial position which will support us as we adjust to the requirements of trading safely and successfully in the months ahead.”