NG Bailey invests in growth, but “it’s still tough out there” says chief executive
ENGINEERING firm NG Bailey has announced that its diversification strategy is underway, and is optimistic for the future.
The group’s pretax profits for the year were up £4.2m from £6.9m the previous year, due to “lower realised investment returns.”
NG Bailey has reported a 20% growth in sales within its services businesses. However sales in building construction declined by 16%. Overall sales fell slightly, by 4%,to £365m.
For the year to 27 February 2015, the firm saw a 43% rise in underlying operating profit to £3m.
The firm achieved this growth despite a £2.7m investment in new services as it attempts to diversify the business that is less reliant on traditional building construction work.
NG Bailey’s long-term strategy plans investment IT, energy and facilities management as well as engineering construction, particularly large infrastructure projects.
During the period, NG Bailey’s secured order book increased from £550m to £590m, with the company named as preferred bidder on a further £140m of work – taking its forward order book at year end to a record £730m.
NG Bailey was recently named preferred bidder on a number of further contracts including the £460m electrical package at EDF Energy’s proposed Hinkley Point C new nuclear power plant in Somerset in partnership with Balfour Beatty.
David Hurcomb, chief executive at NG Bailey, said: “This is a strong result. We are all aware the economic environment is improving, but we also know that it is taking time to filter through to our industry.
“It’s still tough out there, particularly in building construction. Margins remain under pressure across the supply chain, which is why we seek to avoid bidding high-risk, low margin work.
“That said, all of our divisions performed profitably, which gives us a strong platform for developing a long-term, sustainable, business.
“We firmly believe our strategy of creating a much more broadly-balanced business is the right one.
“We remain committed to growing each and every part of our business, which includes the work we do in the traditional building construction market. This is what our business was built on when the company was founded in 1921 and, it will remain a core part of our business moving forward.”
NG Bailey’s chairman, Kevin Whiteman, added: “Continuing to transform the shape of NG Bailey will also ensure that we carry on delivering long-term value for our shareholders. We have a very strong balance sheet with no debts and over £83m in net assets.
“We continue to invest in the business, including £3m a year on the training and development of our 2,500 strong workforce, as well as the £2.7m we invested in new services. I am very pleased with the result and am confident that we’ll see even stronger growth as the market improves over the coming years.”
