Positives for Clugston despite profits hit

CONSTRUCTION, logistics and property specialist The Clugston Group believes the sustainability and energy from waste sectors will be key areas for growth as the economic climate continues to be “difficult”.

Scunthorpe-based Clugston saw annual profits dip from £2.78m to £1.5m for the year ended January 30. Turnover declined from its historic high of £141.7m to £86.7m.

Speaking to TheBusinessDesk.com, chief executive Stephen Martin said cuts in government expenditure were a concern to the group as projects were being pulled and there was more competition for fewer pieces of work.

However, Mr Martin said Clugston had been named preferred bidder on a number of schemes which it was waiting to start on in the current financial year.

Mr Martin, who starred in Channel 4 documentary Undercover Boss last year, said: “The results we had in the previous year were the best we’d ever had so in the biggest recession going we didn’t expect to increase them again.

“The markets we’re operating in are very difficult and challenging markets. Contrary to what people are saying nationally construction hasn’t recovered.”

Commenting on family-owned Clugston’s annual results, chairman John Clugston said there remained the possibility of the economy experiencing a ‘double-dip’ recession.

But Mr Clugston added: “However, we will persist with our strategy of supporting our three core businesses by seeking opportunities which offer them long term sustainable futures.”

Fans’ favourite: Visit TheBusinessDesk.com tomorrow to read how Undercover Boss has helped both Stephen Martin and the business.  

Clugston was forced to make a number of redundancies during its 2009/10 financial year but has continued to invest in staff training.

Mr Martin said the group saw areas of growth in sustainability and energy from waste as individuals and companies could no longer continue throwing items into landfill.

He said that despite increased competition for work, he was confident areas such as the group’s client delivery teams, excellent health and safety reputation and experienced staff set it apart from its rivals.

Clugston, which recently appointed Mark Hancock as a non-executive director, saw turnover in its construction division fall by 42% to £73.3m, while operating profits reduced by 23% to £800,000.

Logistics made an operating profit of £200,000 on turnover down 28% at £10.3m, while Clugston’s property division produced a “solid performance” thanks to work including the sale of a mixed-use site at Stonebridge Mills in Leeds and the sale of the last remaining industrial unit and development plot at Clugston’s business park at Dewsbury.

Mr Martin added: “It (the market) will remain extremely tough and challenging for the coming year. It’s going to be difficult, there’s no question about it.”