Chief executive says he is satisfied with performance given “exceptional” costs during the period
The UK’s largest private M&E contractor NG Bailey suffered a £10m pre-tax loss last year as turnover slumped by 8%.
In accounts for the year up to 1 March, the Yorkshire-based firm’s pre-tax profit fell from £7.2m the previous year to a loss of £10.1m. Revenue, meanwhile, fell from £458.6m last year to £421.6m.
However, chief executive of NG Bailey, David Hurcomb (pictured), said he was satisfied with the performance given “exceptional” costs during the period of £11m.
He said £6m of this related to problems on two unnamed large projects while the remaining £5m resulted from restructuring because of a “disappointing” performance in the north of England and Scotland.
What’s different about us is our foundations are very solid. We don’t rely on borrowings
David Hurcomb, NG Bailey
He said: “We’ve had to reorganise in the north where performance fell below expectations. We’ve reduced the size of our operations in Scotland and the north of England and have had 250 redundancies in that area.
“Over 2012, we had some great contracts which helped us. This year, we’re doing contracts won in the recession on tight margins […]It’s still ultra-competitive out there.”
Building now makes up 38% of NG Bailey’s work, with civils work 37% and the remaining 25% representing NG Bailey’s services business including facilities management, IT consultancy and offsite manufacturing.
Last year, the services business made up just 17% of the firm’s work and the firm said then that the ambition was to grow it to a third of turnover within five years.
Hurcomb said the relatively poor performance of the building sector had hastened this expansion given that sales across services and civils rose by 26% year-on-year.
“We think building will come back but it will never be like the boom time of the late noughties again,” he said. “We have seen strong growth in several areas, which has unfortunately been offset by a decline in building construction.
“What’s different about us is that our foundations are very solid. We don’t rely on borrowings – instead we have a strong bank balance, considerable net assets, a £700m order book and backing from shareholders.”