Member Article

Esh say profit is difficult but growth is on the cards

North East construction firm, Esh Group, say turnover was flat in 2012 but remains confident that a return to growth is on the horizon and jobs will likely follow.

The firm presented its performance to shareholders, many of whom are employees, yesterday evening and stated turnover had increased only marginally to £174m, while £1m profit was achieved.

Chief executive Brian Manning said conditions were difficult and the firm had been static for five years, but nevertheless remained confident that business is picking up.

Speaking to Bdaily, Brian explained: “The way the market has been, we’ve been looking at the medium to long term, over the last five years. We’ve scrutinised our systems and processes across the group, ready for when things pick up again. There’s certainly signs of that this year.”

Austin Donohoe, chairman of Esh Group, paid particular tribute to staff and shareholders in the business: “Whilst profit has been hard to achieve over the last five years this is robust business with a really strong financial base.

“Much of that strength is attributable to the support of our shareholders and hard-working staff - many of whom are shareholders themselves. We have an extensive and loyal customer base across a wide spectrum of construction and the significant goodwill from the local communities in which we deliver our services and invest our support.”

Earlier this year Esh acquired a majority stake in Remedios, a Scottish environmental consultancy, in a move that was designed to ease them into brownfield site projects.

Brian added: “If you wind the clock back to pre-recession we would have been 90% North East-based business. Now we’re talking about 75% North East and 25% Yorkshire and Cumbria.

“We’re getting strong performance from those areas. We’re now looking to consolidate those areas. We do projects outside of that for key clients, such as KFC or social landlords, but the idea is to do more of what we call our ‘value added’ schemes to help the community in areas such as Yorkshire and Cumbria.”

Esh’s community interests are centred around employability and Brian is particularly keen to make sure skills shortages do not hamper the industry as it gets back on its feet.

He explained: “The industry has cut capacity, and a lot of people have left the industry and decided it was too cyclical for them. We do need to recruit and we’ll be looking to bring more young people and apprentices into the business as we move forward.”

The Government’s Help to Buy scheme has undoubtedly helped the housing industry, Brian says.

He noted: “People have complained about it causing another bubble, but I don’t think that applies to the North East. There are price increases across the housing market, but it’s still quite low.

“From our point of view, as builders for social landlords and sellers through our Dunelm brand, its also our Lumsden and Carroll businesses that benefit via infrastructure works.

“We’ve learnt from the recession that we need to be very diverse as a business.”

Brian explained that Esh have tried to divest their shareholding to employees to complement major shareholdings by founders, Carroll, Lumsden and Hogan.

This was posted in Bdaily's Members' News section by Tom Keighley .