Profits rise at Eric Wright
Lancashire-based Eric Wright Group has announced a rise in pre-tax profits to £10m despite ‘challenging’ conditions in the construction sector.
That figure, for the year ending December 31, 2018, compares to £7.2m in 2017. The property and construction firm also saw its overall turnover rise to £170.4m – up from £159.1m the previous year.
It said the increase was “principally driven” by Applethwaite Homes, its residential division and Eric Wright Civil Engineering.
Group managing director Jeremy Hartley said: “We have made excellent progress in meeting many of the targets we set out to achieve during 2018 which has allowed the group to deliver another strong set of financial results in sectors which, particularly in the case of construction, continue to present challenges.
“This outcome has been made possible through the commitment of all our senior management teams who continue to challenge, review and improve all aspects of our activities.”
The last financial year saw the group’s property investment activities perform particularly well, with a number of new lettings, positive rent reviews, and a revaluation gain of £3.7m.
A city centre office block was also disposed of generating a profit of £1.34m and the group is in the process of reinvesting the proceeds in other suitable property assets.
Applethwaite turned over £13.5m in the year, up from £8.1m in 2017, which was due to an upturn in unit sales from 25 in 2017 to 60 last year. The division also made “significant progress” on other schemes and future land bank opportunities.
Turnover in the civil engineering part of the business rose from £14.2m in 2017 to £21.7m. The group says the division ended the year with a “consistent pipeline of work” meeting its targets to deliver critical mass to the business and increased average contract size.
Maple Grove Developments continued to make “good progress” on a varied pipeline of projects including a forward funded student scheme in York, an industrial scheme at Deeside and a significant town centre regeneration scheme in Burnley.
Its health and care division is also set to grow further following a joint venture entered into with Glenholme Healthcare in May 2019.
The group said: “The partnership will progress a programme to develop and operate care homes across the North West region, the first of which is already operating successfully.”
Eric Wright’s facilities management business continued to operate successfully, working with clients in more than 100 locations and welcoming a new managing director and an operations director.
And Eric Wright Water’s focus on securing positions across a wider range of frameworks saw some “notable successes” in key areas such as Severn Trent, Yorkshire and United Utilities.
The group said the construction sector continued to be challenging in 2018. A reduction in turnover to £74.6m from £79.4m the previous year, together with an underperforming contract materially impacted the division’s financial performance.
The project suffered design-related issues and two supply chain members entering administration, contributing to significant cost over-runs.
However, despite “disappointing losses”, the group said the division’s client base expanded and existing relationships, including with Muse Developments and Manchester Life, continued to strengthen.
Gill Chadwick, finance director, said: “A strong balance sheet leaves us well-placed in the market and gives us the capacity and flexibility to support further expansion of Eric Wright Group in 2019 and beyond.
“A key strategic objective continues to be the investment in our portfolio of investment properties.”
Jeremy added: “The group is looking to continue to consolidate its underlying financial stability as focus shifts into 2020 with realistic growth targets across all our businesses activities.
“The wider outlook has some fundamental uncertainties, but the business is well placed to mitigate the impact of these through careful management of risk and focus on core principles.
“Alongside our business activities, the group also continues to work in partnership with Eric Wright Trust supporting a charitable giving strategy across the region that is making real improvements to people’s lives.
“On the back of another successful year we have been able to donate £2.35m to the trust. This demonstrates our commitment to being a commercially focused business with a social purpose, giving back to the communities in which we work.”