Howarth Timber poised for construction sector recovery

HOWARTH Timber Group has seen turnover and profit dip but said it is pleased with its performance throughout challenging trading conditions and believes it is well positioned to capitalise on any recovery in the construction market.

The importer and supplier of timber to builders’ merchants saw turnover in the year to March 31 2013 drop to £116.8m from £121.5m the year before, while pre-tax profit came in at £670,000, down from £1.5m.

However, the company attributed the fall in turnover to the restructuring of its loss-making engineering division, which is in the process of closing out loss making contracts.

In its latest directors’ report filed at Companies House, the Leeds-based group which celebrates its 175th anniversary next year, said that generally the construction industry as a whole continued to suffer further contraction.

“So the result reflects the strong position that Howarth Timber Group has maintained, which, along with planned capital investment, will also provide a springboard for any recovery in the marketplace, which is already being seen,” the group said.

Looking ahead, the company said that trading conditions remain uncertain for the new financial year but that the first quarter of 2013/14 has begun well, with turnover up and a strong order book across all business units.

“There is still concern regarding the health of the economy but most industry forecasts are becoming more positive and this seems to be reflected in the results to July 2013,” said the company.

“In addition, the government’s initiative for first time buyers seems to be having a positive impact in the housing market, which is of benefit to the merchant business in particular.”

It also said that losses at its Howarth Timber Engineering division have now been stemmed, and therefore unlike in previous years, profits arising in other parts of the business are not absorbed by the losses in Howarth Timber Engineering.

“As a result, we expect the forthcoming year to be considerably improved in group profit terms,” the company said.

“None of the above, however, will allow the business to take the focus away from sound management and good cost control.”