Osborne has been enduring financial losses from 'a small number' of construction projects in London, but these have now been completed and the slate is clear.
Osborne Group Holdings posted a £45.6m pre-tax loss on continuing operations for the year to 30th September 2021.
However, with a £46.3m profit from the highways business that it sold at the end of the year – including a profit on disposal of £39.4m – it came out narrowly ahead, making group profit before tax of £675,000 on turnover of £337.2m.
The previous accounts were for the 18-month period to 30th September 2020, in which the group made a £15m loss on £560m turnover.
The Osborne Construction business is still in the process of rebuilding but is making good progress having won places on several public sector frameworks.
As well as the London losses, Covid continues to cited as a major cause of business difficulties. “Whilst the group was able to make adjustments to allow covid secure working and enable our teams to continue to work as quickly and as safely as possible, the restricted working practices did impact volumes and productivity,” chief executive Dave Smith wrote in the annual report. “The impact of the covid-19 pandemic will continue to be felt for some time.”
The 2021 results include Osborne Infrastructure Ltd, which was sold to Sullivan Street Partners in September 2021 (and subsequently rebranded as Octavius Infrastructure). It is hence treated as a discontinued business it the accounts. The infrastructure business accounted for about a third of group turnover.
The sale of Osborne Infrastructure has provided funds for other parts of the business, including development opportunities and the offsite business, Innovaré, which has invested in new plant and equipment and has broadened its factory-built product offering to include cladding and windows.
The Osborne Developments business has entered into a £250m investment joint venture with PGIM to deliver and operate new build to rent homes, homes that are being built by Osborne.
Osborne Property Services has been appointed to the Greater London Authority retrofit innovation partnership, which is anticipated to be worth £4bn to the four suppliers. Winchester City Council has awarded Osborne Property Services a five-year housing maintenance contract extension.
Chief executive Dave Smith, previously a director of Wates, McLaren Construction and Balfour Beatty, joined the Osborne board initially as a non-executive director in October 2021. A month later he was appointed chief executive (initially on an interim basis) on the departure of Andy Steele.
Dave Smith said: “I am delighted with the progress being made in transforming the Osborne business and I am confident that we will continue to increase our profitability through the application of our in-house expertise in low carbon design, offsite manufacturing and delivery, along with increasing volumes of self-build development opportunities.
“As we embark on this next phase of our business plan to 2025/26 I also recognise that the industry faces the significant external challenges of escalating inflation, economic and political uncertainty. My priorities, above all else will be the safety and wellbeing of people working on and impacted by our projects, delivering the promises we make to our customers and investors and carefully managing risks that balance business resilience with the speed of growth.
“I anticipate that with our unique positioning and offerings in our key markets we will see revenues return to, and exceed, the levels achieved prior to the sale of Infrastructure. I am really excited by the huge opportunity in front of us as we continue our journey to providing a zero-carbon future for our customers.”
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