Meldrum Construction says it delivered an "excellent" set of results given the impact of Covid on its market last year.
The Gateshead-based group posted operating profit of £637,437 in 2021, down from £1.16m the year previously, as the pandemic wrought havoc with building projects and many customers put plans on ice. In newly published accounts, Meldrum said nervousness among clients to commit to spending hit its turnover, which fell from £29.1m to £26.5m.
Gross profit margin at the 200-strong business held firm at 14% thanks, it said, to greater efficiencies. That was despite significant materials price rises driven by supplier shutdowns and low stocks, and later compounded by "unprecedented" demand as the pandemic eased.
Read more: go here for more construction business news
Writing in a report accompanying the accounts, director David Meldrum said: "Cash at bank held steady through the reporting period, so the accounts can be seen to represent a year of consolidation whilst preparing for the rather inevitable explosion in volume that was to come as soon as the pandemic was deemed to have come to an end. Detailed business plans and a confident recruitment strategy allowed us to prepare through the period for an anticipated increase in volume through this current trading year.
"This anticipated increase has been seen to turn into a reality with the group currently being contracted to deliver circa £52m through 2022 and are indeed already contracted to deliver a further £14m in 2023. At the same time, business development initiatives and the growth of our recently opened Middlesbrough office have seen our pipeline grow to £200m in value with a number of further contracts currently at final stage negotiations."
Mr Meldrum went on to say that that uptick in demand for building services as restrictions eased was also experienced by a number of the firm's competitors - bringing further inflationary pressures on wages as a smaller number of companies with increased turnover competed for fewer available candidates. He said Meldrum put in place new initiatives to train and develop staff, and offer flexibility and enhanced pay to boost retention and recruitment.
He added: "The board is completely aware that the challenges outlined above still exist for the year/years ahead and will no doubt be magnified by further macro-economic turbulence. However given the results recorded over the last two financial years, the growth in both turnover and profitability forecasted for this current year and the relationships forged with many clients looking to place repeat business; we believe we are well placed and equipped to look to the future with great confidence."
READ NEXT:
Britishvolt outlines supplier cluster plans and huge interest in jobs at forthcoming gigafactory
Newcastle's iamproperty group buys portfolio from Nottinghamshire firm SDL Auctions
Carr's agrees £44.5m deal to sell agricultural supplies division
The Protector Group sees profits rise on the back of UK infrastructure contracts
