Esh Group restructuring after trading loss

Aaron Morby 6 years ago
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Durham-based Esh Group is set on simplifying its business after suffering a trading loss last year.

Andy Radcliffe, group CEO, is leading the transformation plan
Andy Radcliffe, group CEO, is leading the transformation plan

After several years of rapid growth in pursuit of a £300m turnover target, the business is now set on downsizing and focusing on core strengths.

The rationalising process and more selective bidding saw revenues slide from £243m down to £220m, with operating profit slipping £400,000 into the red.

Sales of development investments helped to lift the pre-tax profit line up to £400,000 compared with £3.8m back in 2016.

Last month as part of the ongoing streamlining programme Nixon Plant took over Esh’s Mechplant equipment in a hire back deal.

Chairman Micheal Hogan said: “We admit we are probably coming off a very tough couple of years, when the group probably grew too quickly.

“We didn’t have the appropriate level of control while trying to manage our business on multiple fronts.

“We also acknowledge that we didn’t have the right skills in place as well as having very outdated systems and technology.”

He added that Esh still has a strong balance sheet at nearly £42m, and was advancing an ambitious turnaround plan that saw the senior management team restructured late last year.

The group is also set to roll out a new management and technology computer system in the next few months, known as Project Gateway.

It hopes this will be transformational, helping to model jobs from inception to winning tender, construction and maintaining a profit margin and them closing out final account, with all associated financial transactions and management information.

Group CEO Andy Radcliffe said: “We continue to monitor our level of overheads, specifically in light of market uncertainty created by Brexit, and are ready to manage our cost base as market conditions demand.”

The Lumsden & Carroll civil engineering business will now begin bidding larger contracts, like the £30m Strategic Transport Corridor Phase (SSTC3) project to supplement housing infrastructure and local authority work.

Radcliffe said the firm’s Yorkshire region had experienced a challenging year, but he predicted growth in commercial building and affordable housing would see Esh report growth in revenue in the region during 2018.

He said that both the North east region and Scotland had reported reasonable years with steady growth expected.

During the year the private housing arm, Homes  by Esh, was launched as a self-sustaining division.

Where Esh Construction was formerly responsible for building houses, the business has reverted back to procuring its own construction from the market.

 

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