Columnist

Owen Pugh celebrates year of growth despite challenges

It’s been another turbulent year for the region’s construction sector, with the collapse of leading industry players having a significant impact on the North East supply chain; but one major civil engineering firm is weathering the storm by maximising its capabilities and through continued investment.

The Owen Pugh Group has recently posted its annual results which demonstrate continued growth with operating profit increasing by 17% to £792,000, while turnover rose 5% to £39.3 million. The strong financial performance was attributed to several prestigious contract wins undertaken between March 2014 and 2015 including work on PD Ports’ rail terminal at Teesport and the restoration of iconic Tyneside structure Dunston Staiths. The momentum has continued throughout 2015 with the group securing work on a string of other high profile projects including the £30m Morpeth Northern Bypass scheme, the redevelopment of the Port of Sunderland and the extension of Dalton Park near Seaham.

Investment in people, leading-edge technology and plant has played a key role in the firm’s growth trajectory, driving both efficiency and productivity. Over the summer the Group took delivery of 34 new trucks following a £3.4million deal with Mercedes Benz dealership Bell Truck and Van representing the company’s largest ever single investment in fleet.

Meanwhile HCS Drain Services, the company’s emergency drain clearing arm, saw DMS Jobflow software installed in each vehicle to alert each driver to their next job in the most efficient way possible.

In addition, the company has continued to maximise its advantage as a vertically integrated business, which means that its supply chain is owned by Owen Pugh, underpinned by the company’s in-house training division. This approach means that it is able to offer a ‘one-stop-shop’ to its clients, retaining more control across all aspects of its work and ultimately retaining more profit.

John Dickson, chairman at the Owen Pugh Group, said: “While it continues to be a challenging time for the sector our latest results highlight that we’re in strong financial health and the investments that we have made will benefit us for the long term. Owen Pugh has continued to make a significant contribution to the local economy through our work on several exciting regeneration schemes which are oiling the wheels of the economy by creating jobs and wealth. Going forward we have some exciting plans in the pipeline and we are predicting further growth in 2015-16.“

But, it’s not all been plain sailing for the Group, and the challenges that the North East construction sector continues to face is something that Mr Dickson is keen to highlight.

Owen Pugh was itself directly impacted by housebuilder Southdale Ltd entering administration earlier this year, and had this not happened, the company’s profit margin would have risen to 46% to top £1.1 million. Dickson, commented: “While robust financial management has enabled us to weather the storm, despite a significant financial hit, others haven’t been so fortunate. The collapse of both Southdale and GB Building Solutions were bitter blows for the construction supply chain and losses like these inevitably slow the pace of growth, reducing our ability to invest and create sustainable jobs. In order to stop this cycle, the public sector in particular needs to ensure financial due diligence when it comes to appointing contractors.“

In spite of this, Owen Pugh is set to see out 2015 on a high, having been recognised within the Fastest 50, an initiative run by Ward Hadaway which highlights and celebrates the achievements of fast-growing, profitable companies in the North East; and Chairman John Dickson has also been recognised among the most influential people in business across the region. Meanwhile work is continuing to ramp up with the company’s construction arm undertaking undertake work on an access road for Swan Hunter, a car park at Quorum Business Park as well as on the Portland Green student village in Newcastle.

The scope of work delivered by Owen Pugh varies from road and bridge construction, ports, harbours and sea defences, industrial facilities and office parks to urban renewal and environmental improvements, land reclamation, remediation and environmentally sensitive schemes. The company employs more than 420 staff across five sites at Dudley near Cramlington, Blaydon, Stockton-on-Tees, Bassington Lane in Cramlington and Marsden Quarry near Sunderland.

To find out more about the Owen Pugh Group visit www.owenpugh.com

This was posted in Bdaily's Members' News section by Owen Pugh Group .