One of the North East’s largest construction companies has pointed to growing “uncertainty” in the North East economy after reporting a near 30% drop in turnover.
Sunderland’s Brims Construction – which was responsible for building the Newcastle Stack development and a number of student housing blocks in the region – saw revenues tumble from £35.5m a year earlier to £25.2m in the year to March 31 2019, while operating proft dropped by 26% to £1.17m.
In the accounts, Brims’ construction director Ian Clift said the slowdown in the economy noted in previous accounts had continued “and we have seen a number of projects being deferred due to clients’ macro-economic uncertainty.
“We have also seen a reduction in the size of projects as we as the time required from receiving a project to tender to a commencement on site lengthen and as a consequence a number of projects have moved into 2019-20 as opposed to 2018-19.”
Mr Clift said the company had improved its margin as a result of being more selective in its bids for work, but also noted shortages in some parts of its supply chain.
Work that Brims was involved in during the accounts year included the £9.5m building of the new headquarters for Sunderland online gambling company tombola, students accommodation work in Newcastle and Sunderland, a bus depot for Go-Ahead in Consett and the Stack shipping container development in Newcastle.
Following publication of the accounts, Mr Clift said: “As you will have picked up from our accounts our turnover did reduce in the year following delays to some of the projects that we were due to undertake (some of which still show no signs of progressing). However, pleasingly we were able to quickly adapt, identify and secure sufficient suitable work to keep all of our excellent staff busy.
“As a result the business has continued to trade and perform well and we have still managed to maintain a reasonable profit margin and indeed increase this as a percentage compared to previous years.
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“Despite the continuing uncertainties we continue to identify opportunities where we can utilise our experience to deliver quality projects for our clients.”
Mr Clift said work on schemes including the refurbishment of Neville Hall in Newcastle, an extension to Nissan’s battery plant and the building of a sixth-form centre for Newcastle’s Royal Grammar School were among projects under way.
“We therefore, despite a challenging market place, look ahead with confidence and that we can continue to build on Brims solid financial base,” he added.
The company’s workforce remained almost the same, dropping slightly from 76 to 74, though Brims’ wage bill rose from £3.6m to £3.9m and directors’ renumeration rose from £353,562 to £512,011.