Eric Wright Group has announced its latest set of financial results, with a profit before tax of £7.7m for the year ended 31 December 2019 (2018: £10.0m).
Overall turnover increased to £223.2m up from £170.4m the previous year, which was principally driven by greater levels of activity in the Civil Engineering, Water and Construction businesses.
Speaking about the results, Gill Chadwick, Eric Wright Group finance director, commented: “Although we have seen a drop in overall profit, underlying trading remained strong with improved profitability in a number of key divisions. We continue to make good progress in meeting our Group targets and expanding our customer bases whilst at the same time developing the existing relationships which have underpinned many of our successes.”
“The Group has also benefited from the commercial strength provided by the diversity of its core activities. Whilst general economic conditions during 2019 continued to create challenges, the stability afforded by our diversity and the strength of performance from our investment property portfolio provided us with substantial resilience and gives us confidence for the future, notwithstanding the unprecedented place we all found ourselves in as 2020 began to unfold.”
She continued: “The property portfolio again performed well with a number of new lettings and positive rent reviews, contributing to an improved rent roll. In addition to net acquisitions in the year of £6.3m, there was a revaluation gain of £1.5m bringing the total value of investment property to £72.0m, which was an increase of £7.8m on the previous year.”
Eric Wright Civil Engineering has returned to profit as a result of the board’s strategy to improve turnover levels by expanding the customer base and increasing average project size. The division has secured and delivered a number of high profile projects which are critical to the country’s infrastructure.
Eric Wright Water also saw an increase in turnover to £50.0m (2018: £41.8m), with profit before tax of £0.7m (2018: £0.2m) reflecting continued expansion of the businesses geographical reach and presence on key frameworks.
Some sectors such as construction continue to face industry-wide challenges. Despite this, activity levels were sustained and the senior team made some significant progress towards exiting some of the more problematic contracts. Turnover increased in 2019 to £105.8m (2018: £74.1m), principally as a result of start dates on a number of projects being delayed from previous years. Despite the increase in turnover, the challenging environment within the sector and the completion of two underperforming contracts resulted in a loss. Whilst this is disappointing, it does not reflect the underlying performance of the majority of the business which delivered many complex projects in 2019 on time and to an exacting quality. Construction ended the year with an order book in excess of £100m.
Maple Grove Developments continued to make good progress developing commercial property across the North, with profit before tax up to £1.8m from £1.1m in 2018. The team continues to focus on key sectors where occupier demand is high and working in partnership with both the public and private sector have established a healthy pipeline of projects.
The Health and Care arm of the business also continued to perform well having successfully delivered a comprehensive range of partnering services to the NHS under existing Local Improvement Finance Trusts. In addition, the division expanded its activities by entering into a joint venture to facilitate the delivery and operation of a portfolio of care homes, alongside the ongoing development of health related investment properties.
The Facilities Management business has continued to invest in its operations across the North West, delivering hard and soft FM services to a wide range of public and private sector clients in over 100 locations. The business has also made a significant investment in resources to enable continued growth including the appointment of a new management team and a programme of digitisation across the business.
The residential development business, Applethwaite Homes, had another successful year, generating a consistent profit and steady delivery of units creating an increasingly reliable income stream for the Group. The land bank to support its product type also grew as the Group maintained its commitment to invest in growth in this sector.
Jeremy Hartley, managing director of Eric Wright Group, continued: “The Group ended 2019 with excellent progress across all of its core business activities resulting in another strong financial performance and a robust balance sheet despite some obvious market challenges.
“The focus for 2020 will be to maintain an active, ongoing response to the changing environments within each business area and to prioritise the safety and wellbeing of our staff.
“Given the unforeseen and far reaching difficulties presented in 2020 by Covid-19, each division is faced with its own unique challenges as we trade into a very changed world. We are fortunate to operate in a number of sectors where the demand has proved resilient and we have a strong financial position which will support us as we adjust to the requirements of trading safely and successfully in the months ahead.”