Esh Group runs up £7m loss after restructure

Aaron Morby 5 years ago

Durham-based Esh Group has suffered a £7m loss after cutting overheads and simplifying its business.

Chief executive Andy Radcliffe forecasts Esh will be debt-free by next year end
Chief executive Andy Radcliffe forecasts Esh will be debt-free by next year end

Last year the firm took the strategic decision to reduce its operating divisions from 17 to six, focusing on its core competencies.

This review also resulted in the withdrawal of activities in Scotland and Cumbria to allow it to concentrate on opportunities in the North East, Teesside and Yorkshire.

Chief executive Andy Radcliffe said that all of the losses were borne in operations that had now been discontinued.

He said: “Following many years of largely uninterrupted growth, the group reached a size and scale that was becoming a challenge to manage in its existing form.

“Processes and technology were creaking, our management structures were cumbersome, and our customer proposition became confused and difficult to articulate.

“We had to change, creating a more balanced business model with a leaner cost base.

“We now have a more focused management team with clearer accountabilities and have reduced the amount of cash absorbed in working capital and on long-term strategic land projects.”

Radcliffe added that over the past three years, Esh had invested £8m in information management system upgrades, providing the business with greater control and improved efficiency.

Despite the business shake-up, it maintained a strong balance sheet at £36m, with £13m in cash.

Radcliffe said: “Our continuing operations remain profitable, and with recent contract awards, an increase in volume in our core geographies and greater operational efficiencies, we are already seeing improved profitability through 2019.

“We are also benefiting from the largest and most high-quality order book in our history which is a testament to our new strategic focus.”

He forecast that the group would to be debt-free by year-end.

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