Covid sends Midlands contractor into red

Regional contractor GF Tomlinson said stalled public sector jobs and the ongoing impact of covid-19 sent the firm into the red last year.

The Derbyshire firm, which specialises in public sector work, was hit by a slowdown in contract awards because of the number of staff at clients self-isolating following the discovery of the Omicron variant of covid-19 in late 2021.

It said the delays meant revenue in the year to June 2022 was £30m down on budget.

It added that it was also hit by a number of its own staff forced to self-isolate “meaning that it was more expensive to run the existing sites” at a time when government support packages were finishing up.

But the firm, which has been going since 1892, admitted that an unexpected benefit of jobs being put on hold in 2021 was “that we had not entered into contracts prior to the substantial price increases [of materials and labour] which could have caused us to make even more losses on the projects in the next financial year”.

In the year to June 2022, the firm racked up a pre-tax loss of £2.3m from a £741,000 profit last time on turnover down 7% to £81m.

The firm, which employs more than 220 people, said it decided against job cuts although deferred replacing those staff who left during the period.

It added that two problem jobs meant it was forced to shell out on “substantial legal fees” during the period and had also booked a £1m provision against certain contracts because of increased costs.

The firm, which is on frameworks run by Scape and Pagabo, said its future pipeline of work was more than £60m in sectors including education and healthcare.

The previous year’s net cash position of £3.5m moved to a £2.1m overdraft, the accounts added.