Employee-owned Neilcott staff share £250,000 payout

Aaron Morby 1 month ago

Orpington-based regional contractor Neilcott Construction paid out another £250,000 to staff last year as part of its commitment to employee ownership.

Managing director David Huxley keen to continue low-risk expansion of business
Managing director David Huxley keen to continue low-risk expansion of business

The windfall came as the south east contractor lifted revenue by 38% to a record £139m in the year to December 2023.

The latest payout means eligible staff have received nearly £600,000 since the firm switched to employee-ownership in March 2021.

Operating profit remained stable at around £3.5m, but down on the pre-pandemic average of around £7m.

Net cash is steadily recovering since the former management buyout team sold to an Employee Ownership Trust seeing net cash fall from £30.7m in 2020 to £12.4m in 2021.

Since the deal, the firm has made two additional annual payments of £2.5m in 2023 and 2022 relating to the EOT.

Last year’s improved trading helped to restore net cash which rose by over £5m last year to just under £18m.

Further progress was made in the progressive reconstruction of the new board when former Graham South east regional director David Huxley joined last August.

Further board appointments are planned this year to enable the departure of senior directors Malcolm Elster, Joe Gissane and Neil Harrison who aim to retire from the board.

Huxley said: “The level of cash maintained enabled the business to successfully weather ongoing inflationary pressures which we expect to ease in2024 and the increased risk, both direct or indirect, of companies falling within our sphere of operation going into administration.

“Our good cash levels also enable bonds to continue to be procured at competitive rates despite prevailing market conditions.”

He added: “Current planning for 2024 indicates a similar turnover to 2023.

“With overall gross margin expected to begin to recover towards historic levels, during 2024 capital contributions arising from the move to employee ownership have been accelerated.”

“The company’s turnover represents a small percentage of the pipeline of work which is potentially available within our immediate market.

“Provided flexibility is retained to allow the company to continue to respond proactively and standards of delivery are maintained, the company will continue to robustly address cyclical market trends.”

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