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Thu December 07 2023

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Stepnell blames operating loss on client variations

2 Dec 19 A six-figure tax reimbursement has turned the bottom line of construction contractor Stepnell’s balance sheet from red to black.

Joint managing director Tom Wakeford
Joint managing director Tom Wakeford

In the year to 31st March 2019 Stepnell made an operating loss of £362,917, compared to a £1.5m operating profit the previous year. But the final profit before tax figure was just the right side of positive, at £50,286. In 2018, by contrast, Stepnell had made £2.1m profit.

While profits were down, turnover was up by 12%, from £146.3m in 2018 to £164.4m this time.

Stepnell is based in Rugby and owned by the Wakeford family.

Joint managing director Tom Wakeford said in the company’s strategic report for the year: “The construction industry continues to experience a highly competitive market evidenced by well publicised difficulties of other national and regional contractors. The company has completed a number of projects with satisfactory outcome, for client and contractor, but the accounts also reflect that significant difficulties have been experienced in closing certain larger projects, where there have been encountered significant client variations resulting in substantial additional works and consequential delays.

“Clients have adopted a strict contractual stance to resolving final accounts, with delays impacting on contractor and subcontractor supply chain positions, and hence a significant work in progress provision. More recent contracts have not been so adversely affected reflecting more carefully analysed contract work terms and conditions during the tender process.”

In a subsequent statement to the press, he added: “Strategically, Stepnell is using 2019/20 as a year of consolidation and looking at our customer base very carefully. We will continue to refine project selectivity this year, being cautious and signing up to the right commercial terms.”

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