“We’re strong, we’re well placed in the market and, as we move forward, we recognise the need to simplify the Group structure.”
Brian Manning, Chief Executive
Tuesday 6th September 2011
Esh Group, one of the largest construction companies in the north of England, has announced annual results showing turnover up 26% to £169 million, a rise of £35 million on the previous year and operating profits increasing to £5.9 million.
Also announced was the streamlining of the Group’s brands and sub-companies aimed at supporting better recognition of the Group as it continues to expand its operations.
Esh Group further increased its strong cash position throughout 2010 and into 2011; at the year-end bank cash balances stood at over £28 million.
The core contracting business performed well despite tough trading conditions and the heavy snowfalls and prolonged freezing conditions which badly disrupted operations at both the beginning and end of 2010.
The speculative house building division, Dunelm Homes, has continued to have a negative impact on overall results but this effect was substantially lessened as a result of downsizing these operations. Brian Manning, Chief Executive of Esh Group, explained:
“Turnover has increased, we are profitable, we have a strong balance sheet and cash in the bank; our cash balances have further improved and were £28m at the year-end.
“Whilst our house building operations are still affecting profit before tax, the situation is contained.
“So, whilst there’s not much opportunity for a big celebration there is certainly much to be proud of in announcing these results, they’re a real credit to our hard working staff across all Esh companies.”
He went on to explain that during 2011 Esh Group would streamline its operating company brands in order to simplify the Group structure and present a clearer message to the market:
“We have formed Esh Construction Limited which becomes our main contracting business.
“Esh Construction incorporates Esh Build (previously Lumsden & Carroll Construction), Esh Property Services, Stephen Easten Building, lumsden & Carroll Civil Engineering and Esh Facility Solutions.
“That said – the famous green livery of Lumsden & Carroll will still be seen; we are keeping the name as our civil engineering brand within the new subsidiary.
“Esh Construction is central to our growth ambitions and we believe this rationalisation will bring clarity to the marketplace as we continue to expand further afield.”
The simplified corporate structure shows Esh Construction as the principal trading company flanked by ‘development businesses’ and ‘specialist businesses’.
Esh Construction will occupy a pivotal role in the new structure; 2010 results reported in the revised context show turnover split as 79% Esh Construction, 17% development businesses and 4% specialist businesses.
Notwithstanding the strong results reported, Brian Manning expressed concern at the ongoing market conditions:
“The economic downturn is having a powerful effect on the sector – and the situation could well get worse before we get any improvements, so securing sustainable profitable workload is the key issue for all construction companies at present.
“We are working hard to secure workload and, importantly, we need more procurers to support hard working, community conscious companies, like ourselves, that add value to the areas in which they work.
“Fortunately, at Esh Group, we have been prudent in the good times and have some ‘fat on our bellies’ to see us through the next two to three years. However, we are still exercising extreme cost control and we will make further cuts in order to conserve reserves if and when necessary. It is only by being this pragmatic that we’ll get through these extremely tough times for construction companies.”
Describing Esh Group’s commitment to supporting communities and young people into employment, he added:
“We continue to work to develop an effective workforce of the future through innovative employment training schemes such as ‘Esh Connexts’ and ‘Esh Employability’ programmes.
“Through Esh Charitable Trust we support thousands and thousands of school children, their families and communities through our home-grown, award-winning scheme ‘Grow with Esh’ and many local causes including Durham County Cricket Club and Newcastle Eagles.
Esh Group is a multi-award winning construction company, directly employing over 1,000 people, with an annual turnover in excess of £169 million and operations across the UK.
