Stepnell curbs growth in profitability push

Aaron Morby 6 months ago
Share

After several years of strong expansion, regional builder Stepnell is easing back on revenue growth in a bid to raise profitability.

Tom Wakeford, joint managing director, says Stepnell will be more selective about the clients it works with
Tom Wakeford, joint managing director, says Stepnell will be more selective about the clients it works with

The firm revealed that revenue was expected to fall this year as it took a more selective approach to securing work with clients in a tougher market that is proving more commercial and contractual.

The 151-year-old family-owned firm, which operates across central and southern England, slipped into a trading loss of £360,000 despite raising revenue 12% to £164m.

After interest, Stepnell managed to just break even with a £50,000 pre-tax profit.

Tom Wakeford, joint managing director of Stepnell, said the firm had appointed a new commercial director, John Green from Bouygues,  to spearhead its new commercial strategy of being selective about the projects it bids.

He added: “A few projects had their challenges, particularly through terms and conditions that proved to be more onerous than expected and subcontractors going out of business.

“We remain cautiously optimistic that our revised business model, with a focus on lower-risk terms and conditions, will hold us in good stead.

“Stepnell has a more diversified range of projects than ever before and this will position us to withstand market risks.”

He added: “Strategically, Stepnell is using 2019/20 as a year of consolidation and looking at our customer base very carefully.

“We will continue to refine project selectivity this year, being cautious and signing up to the right commercial terms.”

Stepnell holds positions on several successful framework projects for National Grid (Civil Engineering), Oxford Brookes University, Reading University, Crown Construction and Procure Partnerships and Dorset County Council.

Stepnell’s parent company, Stepnell Holdings, also  reported a steady 7% rise in turnover for the financial year ending 2018/19 to £168m. But pre-tax profit dived from £10.7m to £1m.

The balance sheets on both Stepnell Limited and Stepnell Holdings remain healthy despite a challenging year, with assets of £20m and £49m respectively.

Wakeford said: “Our underlying performance is improving.

“We have a strong order book going forward and an increased the level of due diligence that we apply to each project that we consider, to enable us to make more robust decisions when choosing whether to bid for or decline individual opportunities.

“This has led to our current projects having had a greater level of scrutiny during the bid stage and before they are signed into contract and therefore more successful now that they are on site.”

Latest news

Arup bags job to re-open Cardiff city centre

Arup plans to improve public spaces, repurposed streets and digital infrastructure
7 hours ago

Offsite system to cut staircase construction times by 80%

New integrated balustrade system added before precast stairs lifted into place on site
5 hours ago

Balfour Beatty to start £355m Hull A63 scheme

All systems go for delayed Castle Street upgrade to transform Hull
13 hours ago

Hard-hat mounted cough guard will help protect site workers

New product from JSP will help keep sites safe
8 hours ago
JSP Ltd

Contractors face data danger fighting covid contract disputes

Redundancies could see project knowledge lost
13 hours ago

Mace bags role on £39bn Northern Powerhouse Rail plan

Firm takes lead on project controls, project, stakeholder and commercial management
1 day ago

Cash flow fears spark call for another delay to VAT changes

Thousands of firms unaware tax change could cut cash flow by 20%
1 day ago

Driver unveils changes at the top

Mark Wheeler takes helm as Gordon Wilkinson steps down as CEO
12 hours ago

ISG mobilises for £17m north London town hall fit-out

First phase of £150m Waltham Forest Town Hall redevelopment starts
12 hours ago

Morrison wins £42m Scottish factory of the future

Work to start this summer on National Manufacturing Institute Scotland.
13 hours ago

London mayor loans Mount Anvil £50m to boost building

New partnership to boost housing and construction in the capital
1 day ago

Henley Construct lands £12m Croydon housing contract

Demolition to start imminently to revamp street market site
13 hours ago

Piling problems force BAM to tear down building frame

Major construction issues delay new £65m Sheffield University faculty building
2 days ago

Keep the industry updated by joining the Enquirer Directory

Membership lets construction know you are open for business now or in the future
2 years ago

Industry leaders draw up roadmap to recovery

Construction able to bounce back stronger and more productive within two years
2 days ago

Leaking diamond synchrotron roof to be replaced

Hunt starts for roofing contractor to strip and replace vast circular roof
2 days ago

ISG director leaves to head-up Structure Tone London division

Danny Blakeston joins rival as London managing director
2 days ago

Balfour sets-up “New Normal” Covid-19 taskforce

Contractor focuses on cash discipline and improving productivity on sites
2 days ago

Hinkley C team hits key target despite Covid-19 curbs

BYLOR delivers record pour on second reactor base with reduced workforce
2 days ago

Seven win new highways geotechnical framework

Highways England's new geotechnical framework worth £91m over four years
2 days ago

Plans lodged for £120m Nottingham hotel scheme

Grade II listed Guildhall to become 162-bed luxury hotel
1 day ago

Fit-out firm fined £1.1m after ladder fall

Engineer needs transfusion after massive blood loss caused by fall injury
4 days ago

SIG management blunders rack-up £112.7m loss

New boss promises growth strategy after PwC called in to investigate divisional forecasts
5 days ago

Union calls for construction workers to wear masks

Unite demands revisions to Construction Leadership Council guidelines
5 days ago

Robertson approved to start major Blackpool hotel

Site clearance to start next week on phase 2 of £100m Talbot Gateway regeneration
5 days ago

Failed NHS Nightingale joinery firm sold in pre-pack deal

J&P Carpentry and Joinery went into administration after working on Birmingham NEC hospital
5 days ago

Steel erection starts on first HS2 bridges

Cleveland Bridge starts erecting 65m bridge to span M42
4 days ago

Scotland’s builders begin return to work preparations

Firms hope to be cleared to return to work from mid-June
5 days ago

£61m infra loan to pave way for 6,500-home scheme

Local contractors to sign first deals this summer to transform Cambridgeshire site
5 days ago

Vistry asks subcontractors to cut rates

House builder warns trade packages could be retendered
6 days ago

Contractor services