Fulcrum positive of future opportunities for substantial growth
TURNAROUND activity has dominated the year for energy company Fulcrum Utility Services, which today said it is well-placed to increase its turnover and sees opportunities for substantial growth in several areas of the business.
Despite seeing a slight drop in revenue for the year ended March 31 2014 to £38.3m against £38.8m in the prior year, a reduction of 1.2%, the Sheffield-based business – which built and managed the systems to deliver gas to the London 2012 Olympic flame – said it enters 2014/15 with a solid order book and the markets that the business operates in should present “exciting” opportunities.
In its preliminary results for the year to the end of March, operating losses came in at £4.4m, including exceptional items of £3.7m, compared to £0.9m, including exceptional items of £nil, in the previous period. Gross profit for the year was £9.5m, representing a decrease of 22.5% compared to the prior year gross profit of £12.3m. The prior year was bolstered by the one-off release of £1.1m of provisions associated with the change in framework contractors and £0.6m of other provisions released to cost of sales during the year, which largely explained the year on year reduction. It also included a number of highly profitable contracts which were not repeated in the current year, Fulcrum highlighted.
The group today said that turnaround activities of the last twelve months have been completed as planned and the board believes that the transition work that the business is currently engaged in will produce a business model where Fulcrum can make a decent level of profit at its current level of turnover. If the business can achieve sales growth beyond this level, extra gross margin will be produced with little need for increase in overheads, Fulcrum added.
Martin Donnachie, chief executive officer, said: “Fulcrum is now in a much stronger financial position. Our cash position is robust and our cost base is under control. I firmly believe that Fulcrum is well-placed to increase its turnover and there are opportunities for substantial growth in several areas of the business. Delivering more major projects, taking advantage of the reinvigorated house building market, expanding our multi-utility offering and further developing our web-based sales channel will be Fulcrum’s objectives in the coming year.”
Phil Holder, chairman of Fulcrum, added: “Over the last year the turnaround process has been the main focus of the business and is now complete. The coming twelve months will involve a lot of change for Fulcrum as we move into a transition phase where the operating set up of the business will be transformed into a more efficient and customer responsive model. With the growth in the economy, Fulcrum is well placed to increase sales and this will be a major area of activity within the transition plan.”
Fulcrum also announced this morning that Mark Watts has resigned from his position as non-executive director.
