Firm has already secured first contract worth £7m
Contractor GB Building Solutions is to launch a renewable energy division with a £20m turnover target in order to boost sales.
GB’s renewable energy division has already secured its first contract - a £7m deal with Northumberland council to fit photovoltaic panels on 400 council-owned homes and 130 public buildings. Work on the project starts next month and runs through until March 2012.
Chief executive Martin Smout said the current market conditions made the timing of the move ideal. It also follows the conclusion of the government’s review of feed-in tariffs for renewable energy, which will lead to big potential rewards for social landlords installing renewable power generation in their houses.
“Renewable energy is a growth sector,” Smout said. “Our decision to launch this division was influenced by the downturn in contract work and suicidal margins.
“We recognise this is an area where we need to be active. Many of our clients are required to meet strict energy efficiency targets because there are significant financial implications if they don’t. Putting it bluntly, we want to save them money and that’s one of the reasons why we launched this division.”
GB is bouncing back from a drop in contract work in which turnover fell by a third in 2010 to £125m. The company was also forced to make a number of redundancies - staff numbers now stand at 225 from a peak of 350 in 2008.
However, Smout insists the business, for which annual results are released next month, has now stabilised. “Last year our turnover was £125m, while we recorded a pre-tax profit of £1.22m,” he said. “Our results for this financial period remain very much in line with last year’s figures.”
GB has recently begun recruiting new staff, with Smout saying the company has turned a corner. “The approach we have taken is to invest in the business,” he said.
“Long term we want to develop our care and hotel sectors and expand our range of services.”
GB Building Solutions was formed in 2005 by a management buyout at Gleeson Building, the former contracting arm of MJ Gleeson. The Surrey-based company’s main markets are in the residential, education and health sectors. MJ Gleeson retains a 20% stake in the GB Building Solutions.