Careys profit falls to £1m after £8m discontinued business hit

Aaron Morby 2 years ago

Extensive restructuring of the Carey Group saw it book £8m losses on discontinued business leaving the group with a £1m pre-tax profit last year.

The Wembley-based firm blamed Covid and its focus away from non-core business for a sharp fall in revenue to £344m from a pro-rata sum of £500m, based on an 18-month reporting period.

The weakened performance in the year to September 2021 compared to a pre-tax profit of £15m booked during the 18 months ending September 2020.

Chief executive Jason Carey said that reduced revenue from non-core business and reduced margins from raw material price inflation and labour rate inflation had impacted the business.

But he pointed to a better year ahead based on a strong order book at £667m.

The group is now focused on civil engineering through Careys and its dry lining BDL businesses.

Restructuring saw the headcount drop from 1,079 to 814 as Carey New Homes, Carey’s Irish business and demolition contractor TE Scudder were wound down.

Latest published accounts at Companies House also revealed Carey has upped its provision from £3m to £9m for what it described as “a regulatory matter relating to historical breaches due to the behaviour of a former management team”.

The accounts state: “The directors are fully cooperating with the relevant parties in relation to these investigations. The potential liability ranges from £6m to £16m.

“Legal advice indicates that this upper limit is likely to reduce to around £11m subject to the compliance of certain formalities.

“From legal advice received and various discussions with related parties, the directors have prudently estimated that a provision of £9m is appropriate.”

The group ended the year with £6m cash, down from £18.5m previously, and net debt of £2.4m.

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