Clugston invests to beat slowdown
CLUGSTON Group is looking to take advantage of the growth of the green economy as its construction, logistics and property businesses face tough trading conditions.
Its annual report reveals the company suffered a pre-tax loss of £4.4m for the year to the end of January compared to a profit the previous year of £1.5m. Turnover fell from £86.7m to £65m.
However, chief executive Stephen Martin said the firm continued to invest where it saw opportunities, particularly where legislation is raising the bar on environmental standards.
He said: “We are involved in some challenging sectors and our view is they they will remain so for some years to come. The challenge is to find opportunies where you can add value for the business.
“The average value of contracts is coming down and competition is getting more fierce for the work which is out there so we have been focused on the markets which we think will generate money in the next three years.
“That’s all to do with the green agenda. It is all about restricting damage to the planet and minimising the amount of waste we send to landfill. A lot of the schemes we are now involved in as a business are energy from waste schemes.”
Clugston has already begun work on two energy from waste contracts, is waiting for notice to proceed on a third and is preferred bidder on four further schemes.
Mr Martin said it was still difficult for its property division to secure funding for speculative building and argued there were many companies sitting on cash they were unwilling to invest,
However, he said despite the challenging trading environment Clugston would continue to put resources into new ventures where it spotted opportunities.
“We have started investing in the logistics business and we are investing in upgrading the fleet to ensure it is fuel efficient. We are also investing in petrochemicals, looking at transporting that, and also being as environmentally friendly as possible,” he said.
“I think it is vital to invest in the future otherwise you stand still or go backwards. We want to invest in markets where we can expand.”