Clugston seeks to plug incinerator project gap

Aaron Morby 8 years ago

North Lincolnshire contractor Clugston saw group profits halve to £2.2m in the year to 30 January 2016 after a previous record year.

Stephen Martin, Clugston chief executive, eyes wider building market
Stephen Martin, Clugston chief executive, eyes wider building market

Stephen Martin, Clugston chief executive, said the result still represented an acceptable return amid still challenging market conditions with the construction arm delivering an operating margin of around 1.5%.

He said that Clugston’s construction business would shortly start work on its twelfth energy from waste project at Kemsley in Kent with its partner CNIM.

The construction business is now seeking to further diversify with water and care home projects as the pipeline of energy from waste projects dries up.

“With the capital investment in energy from waste schemes derived from the EU Landfill Directive coming to an end in the UK, it was clearly going to be a challenge to maintain construction turnover at 2014/15’s record level.

“However, turnover of £126.6m still represents one of the highest levels of activity in our company history, an excellent result in what has been a challenging year for the construction industry as a whole.

“Operating profit, whilst down from £3.0m to £2.0m, represents a margin performance better than many construction businesses.”

He added that the regional business units had a successful year securing projects with Siemens at Green Port Hull as part of the offshore wind manufacturing centre, two schemes for the University of Sunderland, a new exhibition hall at the Yorkshire Showground in Harrogate and two new care homes.

Across the group turnover was down 10% from £160m to £143m for the year.

Clugston Group Results
2016 Profit 2015 Profit
Construction £2.0m £3.0m
Logistics £0.4m (£0.1m)
Property & other activities £0.2m £2.3m
Net interest payable (£0.4m) (£0.1m)
Profit before taxation £2.2m £5.1m

After investment in the facilities management business, the division increased its workload by securing further orders in the chemical, education and industrial sectors.

Clugston has introduced new services in fire prevention, HVAC maintenance and energy management to support existing and new customers on the back of these longterm contracts

The group’s logistics division delivered another year of growth, with turnover increasing by 5% to £16.1m. 

Martin said: “While we continue to face challenging conditions, Clugston Group has achieved another strong set of results, with solid profitability, substantial cash balances of £19.7m and no bank borrowings.

“We appreciate that the economic outlook is now more uncertain following the Brexit decision, however, we already have a substantial forward order book in place for the next two years and remain confident that we can continue to deliver acceptable levels of profitability.”

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