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Tue June 18 2024

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Lee Marley takes care after inflation erodes profits

4 Oct 22 Bricklaying entrepreneur Lee Marley learned a valuable lesson last year after getting stung by inflation.

Lee Marley Brickwork, which does scaffolding as well as brickwork, saw its turnover rise by a third in 2021 to reach nearly £57m, a new high for the company, but profits were down by the same proportion because contract prices were fixed before inflation pushed up costs.

Pre-tax profit in 2021 was £1.06m, down from £1.56m in 2020. The operating profit margin was down from 4.1% in 2020 to 2.3% in 2021.

Owner-director Lee Marley said: “Whilst the group recorded record turn over in 2021 of £56.88m, a rise of 32% over 2020, it was a difficult year in terms of financial performance. As with most other construction businesses a significant proportion of our work rolled over from 2020 due to delays cause by Covid-19 lockdowns. This, combined with significant inflationary pressures in the second half of the year and the fixed price nature of most construction contracts, left the group’s margins to be significantly reduced. However, a strong market presence and high levels of management have assisted in mitigating these pressures.”

He is not making that mistake again.

“Looking forward to 2022, the group has secure a record order book and has also negotiated clauses with clients to ensure that material price increases are mitigated either by forward purchases or price re-negotiation with our clients,” he said.

During 2021 Lee Marley Brickwork, noted for its training programme, reached a peak of 59 apprentices, with 49 brickwork apprentices and 10 scaffolding apprentices.

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