Paul Hodgkinson confident of recovery in retail sector as results show slim margin of 0.2%
Paul Hodgkinson, chief executive of Simons Group, has said turnover at the retail specialist will bounce back after falling by almost a third in 2009 from £188m to £135.7m.
Speaking after the group released its results for the 12 months to 31 March 2009, Hodgkinson said the decline was caused by retail clients delaying or scrapping projects.
But he predicted turnover this year would be closer to the 2008 figure. “We’re feeling quite confident about work flow. Winning the Cheshire Oaks Marks and Spencer flagship scheme [in Merseyside, pictured] was very good news.”
Pre-tax profit at Simons fell from £9m to £296,000 over the period, producing a slim 0.2% net profit margin. Hodgkinson said next year’s margin would be closer to 1.5%, adding: “It will be a long time before we get back to the 2008 level of 5%.”
A statement accompanying the financial results said: “Although disappointing, these results compare favourably against other property and construction companies and reflect our relatively low risk profile and our determination to preserve the quality of earnings though maintaining strict contract selection criteria.”
Asked about the outlook for the retail sector in 2010, Hodgkinson said construction spend would vary depending on whether retailers decided to invest in the UK or overseas.
As part of a drive for greater efficiency, the group has reduced staff numbers from 450 to 350.
It ended the year with cash of £28m, down from £38.7m in the previous year, which Hodgkinson said gave the group the benefit of “operating without the banks breathing down our necks”.