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Loss-making Homeseeker business blamed for York-based Shepherd's £9m profit drop
FAMILY-run construction group Shepherd has reported turnover of £748 million as profits drop by £9 million from last year.
The York business, which owns Portakabin, achieved an 11 per cent growth for the year to June 30, from £672 million in 2012. Each division in the group, which is made up of Shepherd Group Built Environment, Shepherd Group Engineering and Portakabin Group, achieved a higher turnover for the year.
However, operating profits dipped from £25 million to £16 million, with bosses putting the fall down to the Group taking action to exit the loss making Homeseeker business, with this unit incurring an operating loss of £2.1m in the year and the disposal having a one-off impact of £3.7m on Group profits.
Commenting on the results, the Group chairman, Alan Fletcher, said: "Despite the challenges that contributed to lower profit performance in the year, the Group Board remains confident in the execution of its strategy which focuses on improving the quality and mix of Group earnings, with each division taking actions to broaden their markets in sectors with attractive margins.”
“At Portakabin, for example, an important strategic step was taken by acquiring Oecon Mobilraum GmbH in Germany just after the year end. This acquisition is a key part of expanding the presence of Portakabin in Europe in countries with high GDP.
“Strong management, quality products and services and the decisive actions taken to improve efficiencies and control cash continue to give a high level of confidence in the Group’s resilience in the current economic and market conditions and in its potential for growth.”
The results showed Portakabin Group has posted a level of turnover and gross margin consistent with the previous year against what Shepherd described as a market struggling for volume, and without the margin contribution of prior years from the London Olympics.
Shepherd Construction saw a strong focus on quality of earnings, management data and controls and strategic positioning lead to a 15 per cent increase in profits, a third successive annual increase.
Following the year end Shepherd Group Engineering, which is made up of the Portastor and Portasilo businesses, has seen a number of staff redundancies due a restructure of the business. Shepherd Group's cash position at the year end showed net cash of £111 million compared to £89 million in 2012.
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