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Mon June 21 2021

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Construction loss pulls on Eric Wright

30 Sep 20 Lancashire-based Eric Wright Group has filed its 2019 financial results, showing turnover up but profits down.

Eric Wright converted New Little Mill in Ancoats, Manchester, into 68 apartments for the Manchester Life Development Company
Eric Wright converted New Little Mill in Ancoats, Manchester, into 68 apartments for the Manchester Life Development Company

Overall turnover increased 31% to £223.2m for the year ended 31st December 2019 (2018: £170.4m), thanks to the busier civil engineering, water and construction divisions.

But pre-tax profit was down 23% to £7.7m (2018: £10.0m), with a loss being booked by Eric Wright Construction.

Eric Wright Group finance director Gill Chadwick said: “Although we have seen a drop in overall profit, underlying trading remained strong with improved profitability in a number of key divisions.  We continue to make good progress in meeting our group targets and expanding our customer bases whilst at the same time developing the existing relationships which have underpinned many of our successes.

“The group has also benefited from the commercial strength provided by the diversity of its core activities.  Whilst general economic conditions during 2019 continued to create challenges, the  stability afforded by our diversity and the strength of performance from our investment property portfolio provided us with substantial resilience and gives us confidence for the future, notwithstanding the unprecedented place we all found ourselves in as 2020 began to unfold.”

She continued: “The property portfolio again performed well with a number of new lettings and positive rent reviews, contributing to an improved rent roll.  In addition to net acquisitions in the year of £6.3m, there was a revaluation gain of £1.5m bringing the total value of investment property to £72.0m, which was an increase of £7.8m on the previous year.”

Eric Wright Civil Engineering returned to profit in 2019 after a strategy shift to expand the customer base and take on bigger projects. 

Eric Wright Water saw an increase in turnover to £50.0m (2018: £41.8m), with profit before tax of £700,000 (2018: £200,000).

Construction turnover increased in 2019 to £105.8m (2018: £74.1m), principally as a result of start dates on a number of projects being delayed from previous years.  Despite the increase in turnover, the challenging environment within the sector and the completion of two underperforming contracts resulted in a loss. Construction ended the year with an order book of more than £100m.

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Maple Grove Developments continued to make good progress developing commercial property across the north, with profit before tax up to £1.8m from £1.1m in 2018.  The team continue to focus on key sectors where occupier demand is high and working in partnership with both the public and private sector have established a healthy pipeline of projects.

The Health and Care arm of the business expanded its activities by entering into a joint venture to facilitate the delivery and operation of care homes.

The Facilities Management business delivered hard and soft FM services to a range of public and private sector clients in over 100 locations across the northwest. 

The residential development business, Applethwaite Homes, is becoming “an increasingly reliable income stream”.

Eric Wright Group managing director Jeremy Hartley said: “The group ended 2019 with excellent progress across all of its core business activities resulting in another strong financial performance and a robust balance sheet despite some obvious market challenges.

 “The focus for 2020 will be to maintain an active, ongoing response to the changing environments within each business area and to prioritise the safety and wellbeing of our staff.

 “Given the unforeseen and far reaching difficulties presented in 2020 by Covid-19, each division is faced with its own unique challenges as we trade into a very changed world.  We are fortunate to operate in a number of sectors where the demand has proved resilient and we have a strong financial position which will support us as we adjust to the requirements of trading safely and successfully in the months ahead.”

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