Newcastle construction group Northern Bear says it has made significant investment in its operations in a bid to generate more growth.
The listed firm has relocated its Isoler Limited building integrity business to larger premises in Belmont, County Durham, equipping it with an expanded training facility. And it has set up a southern delivery hub for the brand to support national expansion.
It also launched a new division of its Gateshead-based business MGM Limited. Callisto Glass Facades has recruited a team to provide design, manufacture and installation of architectural glass facades. Northern Bear bosses said the move has required up front investment in staff and overheads within the first year before the division is expected to be profitable from financial year 2025 onwards.
Elsewhere the group pointed to investment in a turnaround of Arcas Building Solutions Limited, which it said had endured a challenging 2023 financial year. Changes to its management team and internal systems include the appointment of managing director Michael Nesbit, who has helped secure new contracts including work on an historic, Grade-II listed building in Newcastle city centre.
The autumn Budget brought concerns about the impact of reduced national insurance thresholds and minimum wage changes on the group's H Peel & Sons Limited refurbishment and fit-out business which had suffered reduced demand in the wake of Covid due to its focus on the hospitality and leisure sector. The firm's long-term future is now "under review".
The update came as Northern Bear published half-year results for the six months to the end of September in which it said revenue and profits were ahead of management expectations. Across the group, revenue was £37.6m, up from £36.9m in the same period last year, while operating profit fell from £1.8m to £1.7m, owing to the investments. Gross margin improved to 23.8%, from 22%.
In April, Northern Bear appointed John Davies as CEO, replacing Keith Soulsby who retired in March. In July the group recruited Simon Carr, former managing director of Henry Boot Construction, as non-executive chairman.
Mr Carr said: "I am pleased to report that we remain in a strong financial position and have continued to make good progress against our medium-term objectives. This has been possible in the main by a combination of continued investment, organic growth and focus on cash generation, which has underpinned the results in the period.
"I was delighted to be appointed non-executive chairman of Northern Bear plc in the summer of this year. Since then, I have been working very closely with the board of Northern Bear plc and have also now met with all the senior management teams of all the trading subsidiaries. I have been very impressed by their enthusiasm, talent and dedication to the business. I would also like to join our CEO in thanking all the employees for their hard work and commitment, and our shareholders for their continued support."
