Construction firm Esh Group says it bounces back with £ 300million backlog after pandemic plunged it into the red in “toughest year in group history “.

The Durham-based company, which operates in the North East and Yorkshire, has published accounts for 2020 which show how the previous year’s £ 800,000 operating profit was converted into an operating loss of £ 3.7 million.

At least three months of downtime were followed by delays in starting contracts, production constraints due to repeated isolation requirements and material shortages, all combined to have a major impact on the group. Gross profit margins fell to 2.4% from 4% comparable the previous year.

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Despite the drop in profits, revenue fell from £ 212.6million to £ 236million, with the growth coming from previously announced organizational changes and the company’s revised growth strategy. He also ended the year with £ 15.4million in cash and went through the year without drawing any down on his £ 7million credit facility.

Andy Radcliffe, the group’s chief executive – which employs 750 people and supports four times as many throughout its supply chain – said that while the challenges of the pandemic are far from over, the company entered 2021 with a solid foundation for growth in liquidity and profitability.

He said: “We started the year with a record order book approaching £ 300million, a level of liquidity not seen in many years and a business strategy which by all accounts is working well.

“The group recorded strong profitability through the end of the third quarter, and the board expects this to continue for the remainder of the year and beyond.

“Going forward we are very profitable this year, we put the major impact of Covid behind us and our business strategy was well placed before Covid hit, but it had a big impact on the income statement for obvious reasons.

“Our business plan is now back on track, we have generated good profits and everything is looking good. The main headwinds are on supply and availability of materials, and it’s volatile right now – we see it swinging from product to product and it depends on who can get capacity and who can get capacity. drivers for the wagons, to ship the product.

“For the moment, we are managing it. We juggle, like everyone else, and we get by with it, keeping our programs online. Frankly, we have some very loyal and supportive supply chains looking after us, and it’s always nice to be able to call on these favors when you need them.

“I would say it is not easy but it is manageable and in terms of our business plan we are definitely on track with what we plan to achieve for this year.”

Esh Group is currently involved in a series of contracts covering commercial property, housing and infrastructure programs, including the £ 40million Sunderland Strategic Transport Corridor, and the joint venture it has with the office of Stantec studies on a Northumbrian water infrastructure framework contract.

Mr Radcliffe said the group continued to struggle with chronic levels of material shortages and cost inflation, but was being realigned to be simpler, lighter and focused on segments of the market that continue to do so. proof of incredible resilience.

He added: “We have a number of housing programs in the North East and Yorkshire region. This market is booming right now, so we have positioned ourselves very well with a few land opportunities, bringing land to our clients, which is driving solid growth in this space.

“In terms of commercial construction, we have a number of projects going on – the Travelodge and the retail project at Hexham bunker, which are going well, and in Yorkshire we have the Ironworks Holbeck’s Urban Village project. .

“We are active in all of these areas and our business strategy has been to rationalize the Esh Group, from what was previously a very sprawling conglomerate of largely disconnected business units into something much more confined, much more focused on the elements of the markets we want to pursue. Frankly it paid dividends and without Covid we would have entered the second year of our business strategy and achieved exceptional results.

“Covid has given us a foothold but we are back on the right track and 2021 is going to be a strong year for us.”

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