Building services contractor TClarke has reported a pre-tax loss of £1.7m for 2014 despite making record revenues.
Chief executive Mark Lawrence
Above: Chief executive Mark Lawrence
Group revenue was up nearly 5% to £227.5m (2013: £217.1m) although underlying operating profit slumped to £1.4m (2013: £3.2m) representing a margin of just 0.6%.
Revenue from operations in the south was down 2.7% year on year at £167.6m (2013: £172.2m). The region reported an operating loss of £2.2m (2013: profit £0.5m).
Revenue from operations in the north increased by 38% to £43.4m (2013: £31.4m) but operating profit was reduced to £1.4m (2013: £1.5m).
Group profits were hit by two issues that the company says it has now resolved. One was a damages claim relating to a contract carried out by a subsidiary before TClarke acquired it, and the other was a protracted final account settlement in the Mission Critical division.
“However, if you set their costs aside and look at the overall performance of the group, then it was a successful year,” said chairman David Henderson. “In the second half of the year, you could say 'the decks were cleared for action' – and we saw action in the shape of a series of significant contract wins in London and also, though less widely reported at the time, across the rest of the UK.”
Forward order book at the end of the year was £300m and chief executive Mark Lawrence said the company was now well positioned for growth.
"Two issues impacted profitability last year; they are fully resolved and so, with improving markets, we are free to focus on rebuilding the profitability of the group,” he said.
“TClarke has weathered the storm well. Although remaining cautious and prudent in our planning, we can see clearly now that the market is increasingly less price-driven and increasingly more resource-focused. In plain terms, developers and principal contractors are looking to secure and lock in high quality teams for their projects in order to deliver them on time and on budget.”
He added: “From a strategic perspective, TClarke now has the opportunity to grow in all of its markets and to become, during the years of upturn, a more significant player in a range of specialist sectors and markets.”