North East construction group Northern Bear says it expects to return to more normal trading and profitability as it is buoyed by a strong forward order book.
The Newcastle AIM-listed group of companies, which provide specialist building and support services, saw shares rise more than 7% to 59p in early trading, after publishing a trading update for its full year, ended March 2021, as well as a look ahead to the coming year.
Despite seeing substantial disruption to half year activity levels from Covid-19, which continued into the second half of the year, it said it expects profitability from underlying trading to be in line with H2 FY20 for the group as a whole.
It said that its roofing division performed well in the second half of the year despite on-site restrictions. While it saw weather-related disruption in a very wet February, in general there was no repeat of the severe winter weather from the previous year.
The group reported net cash of £600,000 at September 30, up on the £200,000 it had six months earlier and said its cash position has remained strong. At the year end it said it had a substantial net cash position of £2.1m.
It said it had made limited use of its £1m overdraft and £3.5m revolving credit facility in the second half of the year, which it said provides it with ample cash resources for the group’s strategic and operational requirements “as we look ahead to the coming financial year and beyond with renewed optimism”.
In the trading update the group said Keith Muldoon has been appointed to oversee the group’s roofing division as part of longer-term succession planning, and that Matty Rowley has replaced Mr Muldoon as managing director at Springs Roofing Limited.
Assuming no further significant disruption or margin impact from the pandemic or supply chain pressures, the group’s statement concluded that its current expectation is for a resumption of more ‘normal’ trading and profitability levels, closer to those seen in financial years prior to the 2021 financial year.
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Steve Roberts, executive chairman of Northern Bear, said: “FY21 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 H2 FY21, given the backdrop against which they have had to, and continue to, operate.
“I would like to congratulate Keith Muldoon and Matty Rowley on their new roles and wish them every success. The work of the executive team and all subsidiary management teams has been outstanding during this period.
“All businesses managed to control costs, preserve cash and maximise the opportunities which were available during these unprecedented times and the resulting difficulties in working conditions.”