Northern Bear hails performance despite seeing profits and sales fall in turbulent year

The construction group's figures were hit by the Covid-19 pandemic, Brexit uncertainty and issues in the supply chain

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Coreena FordChronicle and Journal business writer

11:03, 21 JUL 2021

Northern Bear's headquarters in Prestwick Park, Newcastle (Image: unknown)

The chairman of North East construction group has hailed its “pleasing” performance after dealing with the impacts of Covid-19, Brexit and supply chain issues.

The Newcastle AIM-listed group of companies, which provide specialist building and support services, said its results for the year ended March 31 were significantly impacted by Covid-19, taking 10% off revenues to £49.2m.

Adjusted operating profit came in at £1.365m, down 37% from £2.2m, while adjusted basic earnings per share dropped from 8.7p to 5.5p.

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After impact of impairments, amortisation, transaction and other one-off costs, the group’s operating loss was £1.455m, compared to the previous year’s profit of £2.077m.

During the year it also furloughed some staff, receiving £1.46m from the Coronavirus Job Retention Scheme.

Steve Roberts, executive chairman of Northern Bear, said: “This has been a turbulent year for all companies in our sectors.

"Whilst we have obviously experienced severe difficulties within certain businesses within the group, others have performed exceptionally well, particularly in the second half of the financial year, given the backdrop against which they have had, and continue, to operate.”

“The work of the executive team and subsidiary management teams has been outstanding. All of the businesses have managed to control costs, preserve cash, and maximise the opportunities which were available during these unprecedented times and despite the resulting difficulties in working conditions.”

Mr Roberts said the directors were pleased with the results, given it had been an exceptionally challenging year, tackling the impact of the pandemic, uncertainty surrounding Brexit, and issues which continue to affect construction industry supply chains.

He said the performance was “testament to the hard work and commitment of all our employees”.

Its roofing division performed well in the second half of the year, despite on-site restrictions and some weather-related disruption in February.

The construction division saw a more mixed performance in the last six months, with specialist construction and refurbishment business MGM performing “exceptionally well”.

However, H Peel & Sons Limited, its Dewsbury based fit-out and interiors business, had tougher times as the pandemic affected its core hospitality and leisure markets. It recorded a £2.8m impairment of goodwill and intangible assets related to H Peel in its interim results but said it is cautiously hopeful of an improvement in the firm’s core market.

Meanwhile, J Lister, its York-based electrical contractor, traded well over the autumn period but has since experienced pandemic-related disruption because of the indoor nature of works, which has impacted profitability. However, the firm said trading is expected to lift significantly thanks to its order book levels.

Materials handling business, A1 Industrial Trucks Limited also saw disruption to new truck sales, as well as its ability to deliver maintenance and service works on site during the second half of the year, but is hopeful of an improvement in trading as restrictions ease.

After receiving support from the Government’s Coronavirus Job Retention Scheme and asking non-furloughed staff to take temporary pay reductions across the group, the board said it doesn’t consider it appropriate to pay out a final dividend.

Should trading continue to improve, the group plans to resume dividend payments next year.