Engineering group returns to profitability

A hull-based engineering contracting firm has returned to pre-tax profits after completing a loss-making wood pellet storage facility in Tyneside.

Posting accounts ended 31 March 2019 on Companies House, C Spencer – trading as Spencer Engineering Group – said its pre-tax profits for the year stood at £1.8m; an improvement on the pre-tax losses of £8.9m recorded in the previous year.

Its turnover, however, dropped by £22m – from £75m in 2018 to £53.9m in 2019. Turnover has more than halved over a two year period – dropping £59m since 2017, when the firm reported turnover of £112m.

Chairman and founder Charlie Spencer said: “The directors viewed this year as being one of consolidation following on from the previous year, where the result was, unfortunately, skewed materially by a substantial loss on one contract.

“The company enters the new financial year to 31 March 2020 with secured work in hand of £77m and a pipeline of £213m, from which to draw its opportunities.”

Average headcount was 254 staff, falling from 314 in the previous year. Net debt reduced from £4.9m to £3.5m.

In January, the firm revealed that it had been “seriously impacted” by a materials handling project which suffered time and cost overruns which cost the business £14.5m in its 2018 results. This was a £65m scheme to design and build facilities for the handling, storage and rail-loading of wood pellets at the Port of Tyne.