Esh Group returns to profit after reducing risks

Grant Prior 2 months ago

North of England contractor Esh Group has reported a return to profitability for 2021 with a major turnaround from the previous year’s covid-hit results.

Esh has undergone a comprehensive programme of simplifying and refocusing the business over the past four years which has seen pre-tax profits hit £3m in 2021 from a £5.1m loss last time as turnover hit £255m.

Staff numbers fell to 756 from 837 but Esh is now actively recruiting to support its growing order book.

Group chief executive, Andy Radcliffe, said: “We are delighted to report a remarkable improvement in profitability, particularly during another year which was marred by the impact of the global pandemic.

“This achievement is no mean feat and is underpinned by the cumulative efforts over the last four years to reposition the group to target resilient sectors of the construction industry which demonstrate long-term stable fundamentals.

“Despite continued pressures emanating from supply chain constraints and elevated levels of cost inflation, our efforts to deliberately design a business model that allows the smoothing of positive and negative factors across our operations has paid dividends, allowing us to insulate a large part of the business from levels of inflation not seen in our generation.”

The privately-owned firm ended 2021 with £21m in cash and remains debt free, without drawing on its £7m credit facility at any point in the year. Gross profit margins climbed to 6.7% from a comparable 4.9% the previous year – the highest it has been in six years.

Radcliffe added: “While we continue to face headwinds, along with the wider industry, our focus on increasing turnover via routes to market which present reduced risk provides us with a stable footing on which to continue our growth plans.”

Esh Group has focused on developing a balanced portfolio across its civil engineering, affordable housing, commercial build, and private housebuilding divisions.

Radcliffe said: “I am incredibly proud of the team at Esh. Their resilience, commitment and ingenuity in dealing with the many challenges we have faced as we worked to fundamentally reposition the group is nothing short of amazing.

“Our gratitude, as always, goes out to our clients, our supply chain and wider stakeholders – we are who we are due to the determination of a large group of people who believe that we only succeed, if we all succeed.”

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