Pochin decided to sell its loss-making concrete pumping subsidiary earlier this year to focus on its original core businesses of construction and property development.
Concrete pumping revenues fell to £8.8m in the year to 31 May 2011, down from £9.1m the year before. Further cost cutting measures were introduced, reducing the operating loss for the year to £1.2m (2010: £2.9m loss). This was slightly worse than anticipated due to the severe winter weather, when a loss of £300,000 was suffered in the month of December 2010 alone. The company said that “every effort has been made to increase both job price and utilisation and significant progress has been achieved in moving from historic lows”. Average job price for the year rose to £581 from £570 in the previous year and utilisation rose from 72% to 73%. “Unfortunately, over capacity in the market has restricted further improvement, although the current financial year is showing better progress as more infrastructure and utility work is commenced.,” it added.
“Despite the considerable efforts made to improve operating performance, the concrete pumping division continues to be a cash drain on the group's limited resources.”
The concrete pumping division has therefore been treated as a discontinued operation in the group’s results for the year to 31 May 2011. These showed a profit on continuing activities before taxation of £700,000 (2010 re-presented: £13.7m loss). Discontinued activities showed a pre-tax loss of £4.8m (2010: £2.9m loss).
Overall group revenue was down 10% to £59.3m. Turnover in the construction division fell by 32% to £41.6m (2010: £61.0m), although the firm order book now stands at £53.0m.
As well as the concrete pumping division, several non-core properties in Pochin’s portfolio are also being sold to reduce the £23m net debt.