County Durham construction company Esh Group says it has started 2021 with a record order book of £300m, following a year of restructure which saw it withdraw from Scotland and the North West.
The civil engineering and construction group is now focussed purely on the North East and Yorkshire having divested its plant hire business Mechplant North East to the management team and closed its Scottish and North west operations.
It has also simplified to operate through three divisions – civil engineering; living, build and facilities; and private housing.
Despite the three-year reorganisation programme, which incurred restructuring costs of £165,000 and led to a pre-tax loss of £2.9m, the firm posted a 13.4% increase in turnover in 2019, from £186.5m to £212.6m.
The overall loss for the year as a result of the reorganisation was £2.4m - although its continuing operations turned a profit of £288,000. Operating profit from continuing operations also rose from £500,000 to £800,000.
Esh Group’s chief executive Andy Radcliffe said: “Following the reorganisation our business is in a position of considerable financial strength, our liquidity remains very strong with a 2019 balance sheet standing at £33m, of which £15m is cash. We now have a business that is leaner, more customer and market focussed, and which is aligned to resilient and robust sectors of the market.
“We start 2021 in our strongest position in years, with a healthy pipeline of work made up of high-quality contracts for private and public sector clients, and importantly, the financial fire power to deliver our new growth strategy.
“Our £300m order book comprises sectors that appear to be resilient, and in some cases, stimulated, by the impact of the pandemic – as a result we expect to deliver healthy level of profitability throughout 2021.”
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The firm is contracted to build more than 1,700 homes for affordable and private housing providers, including extra care.
Alongside two private residential schemes totalling £21m, in Newcastle city centre and Leeds South Bank, Esh is due to start on £14m of retail and hotel developments in Northumberland and North Tyneside.
Its civil engineering division also recently secured a £75m utilities framework, has contracts for plotworks, roads and sewers orders with housebuilders worth more than £50m and continues to deliver major infrastructure schemes including M181 Northern Roundabout in Scunthorpe and the £40m Sunderland Strategic Transport Corridor.
Mr Radcliffe added: “Whilst undoubtedly the pandemic has had some impact on our operations during 2020, our strategy has served us well and enabled us to very successfully navigate the impact of Covid-19 on our business. We are well placed to support our clients as they recover, and as always we are committed to delivering contracts with a local workforce, a local supply chain and an industry leading social and economic value programme..”
In his report within the accounts, chairman Michael Hogan added: “Whilst the majority of this report Is focused on 2019, it would be remiss not to acknowledge the events of 2020 and the extreme disruption caused by the global pandemic. Undoubtedly the strategy that has been implemented and the corresponding actions undertaken through 2019 have placed Esh Group in a strong position to navigate the term of the crisis.
“However we are extremely grateful to our clients, supply chain, employees and shareholders who have demonstrated strong support to our organisation over the last 12 months.
“We have clear strengths in markets that are resilient to the impact of the Covid-19 pandemic and subsequent economic shock, and we look forward to supporting a loyal clients, supply chains and employees in the months ahead.“