Discontinued businesses rack up £8m in losses

Careys said the impact of the covid-19 pandemic and delays in awarding contracts sent the firm’s income tumbling to below £350m last year in its latest accounts filed at Companies House.

The Wembley-based civils and concrete specialist said income in the 12 months to September was £344m – down from the £749m it posted in the 18 months to September 2020. Its pro rata turnover for 2020 was £499m, down from the £575m it recorded in 2019.

The firm had already pulled the plug on three non-core businesses, including demolition firm TE Scudder and Carey New Homes, but said its discontinued operations racked up losses of £7.9m on a combined turnover of £23m.

PSQ topping out 2

Careys worked on the £350m Paddington Square scheme in west London which is being built by Mace

Pre-tax profit for the year was £9m but losses from the three discontinued businesses meant the figure slumped to just over £1m from £15m last time.

It added that the firm’s Irish business, which is also being wound down, is expected to complete its final remaining contract in the second quarter of this year.

Careys, whose business also includes dry lining firm BDL, which worked on Mace’s Paddington Square scheme in west London, added that it claimed a further £600,000 from the government’s Coronavirus Job Retention Scheme initiative on top of the £9.1m it was paid last time. It said the cost of paying furloughed staff during the period was £700,000.

It said it had deferred a £2.1m VAT payment in line with HMRC guidance with the sum due to be paid by the end of next month. It has already repaid £3.1m of the original deferred amount.

The firm said: “The impacts of Brexit and the continuing effects of the covid-19 pandemic have maintained uncertainty ad volatility within the UK construction sector and wider economy which has resulted in a highly competitive tendering environment, extreme cost pressures and delays in new contract awards. This has in tune led to lower revenues and leaner margins than would have otherwise be expected. The outlook for the next 12 months is similarly uncertain and challenging with material price and labour rate inflation set to remain at unusually high levels.”

The group’s order book stood at £667m at the end of September, while it ended the period with net debt of £2.4m, compared with a net cash of £3.4m in 2020. The number of employees at the group was 994 last year compared to 1,462 in 2020.

The firm also said it had increased to £9m, from £3m last time, a provision on “a regulatory matter relating to historical breaches due to the behaviour of a former management team”.

It added: “The directors are fully cooperating with the relevant parties in relation to these investigations. The potential liability ranges from £6m to £16m. Legal advice indicates that this upper limit is likely to reduce to around £11m subject to the compliance of certain formalities.”