Turnover at the Gloucestershire-based group rose 15% to £118m in the year to December 2025 from £103m, while pre-tax profit fell to £3.3m from £5.1m.

Operating profit dropped to £2.7m from £4.7m, cutting operating margin to 2.3% from 4.5%.

Despite the squeeze, Barnwood doubled its annual contribution to the Barnwood Group Employee Ownership Trust to £2m from £1m.

The group said that it had now distributed more than £1.6m in dividends to employees through the trust since 2020 and said employee ownership continued to support staff retention and long-term stability.

Staff turnover remained at 8%, with total headcount steady at around 230.

Directors said demand remained strong through much of 2025 but market sentiment became more cautious towards the end of the year.

Barnwood now expects competition to intensify over the next 18 months and has been driving efficiencies across the business ahead of tougher trading conditions.

Despite the challenging market, Barnwork expects turnover to grow again in 2026, supported by a strong 12-month order book and framework positions.

Its strategy this year will put renewed emphasis on larger frameworks alongside developing existing customer and supply chain relationships.

Cash remains a major strength, with year-end balances doubling to £19m from £9.5m.

The results come as Barnwood enters a new management era under former finance director Matthew Williams, who was recently promoted to group chief executive.

Williams took over from Simon Carey, who moved up to group chairman after leading the business since 2004.

Barnwood said the acquisition of Ambrose House new offices during 2026 would also bring its Construction and General Works teams together under one roof as part of its next phase of growth.