Esh aims to pick up more university contracts

CONSTRUCTION firm Esh Group hopes to win more contracts to provide round-the-clock maintenance work at Yorkshire’s universities after suffering a fall in full-year profits.

The company was firing on all cylinders this summer, as it worked to keep drains clear for Yorkshire Water during the torrential rain.

Yesterday, the Durham-based firm revealed that it achieved a turnover of £170m in 2011, compared with £169m the year before. Operating profits fell to £2.1m from £5.9m as the company absorbed costs linked to setting up operations in Yorkshire and Cumbria.

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The Yorkshire operation, which was founded in 2007, accounts for £30m of the company’s turnover, and employs around 120 staff, including 20 at its regional office in Leeds.

Recently, the firm was involved in creating a £2.6m customer centre at the Stolzle Flacconage glass making facility at Knottingley, in West Yorkshire.

Brian Manning, the chief executive of Esh Group, said the company had been carrying out a civil works contract with Yorkshire Water for three years, which involved unblocking drains. The contract is worth between £4m to £6m a year.

He added: “It could involve a main sewer or a 100-millilitre diameter household drain.

“We’ve got about 20 to 30 gangs working on the Yorkshire Water contract. We were working flat out during the heavy rainfall over the summer, but the workload tends to even itself out over the course of a year. The move into Yorkshire and Cumbria was a natural progression for the business.”

Commenting on the financial results, Mr Manning said: “These figures come as no surprise; the market is weak.

“Although we are pleased to have maintained overall turnover at Esh Group we live by the saying, ‘turnover is vanity, profit is sanity and cash is king’.

“That’s our focus, we are managing costs, we are profitable, we have a strong balance sheet and a healthy cash position.

“Although house building is still affecting profits, the team is doing very well, their sales are ahead of target and the finances of the business are contained. So, in short, we’re strong and we’re working hard for our clients.”

Mr Manning said the firm believed in having a diverse range of products and was committed to community engagement.

He added: “We go into schools and give advice about the skills pupils will need to get on the employment ladder.

“We’d like to expand into the care market and take on more school and university projects. We would like to offer more round-the-clock maintenance work in universities – we already provide these services at Leeds University.

“I would like to see the turnover in Yorkshire go up to £35m, but in the current climate I will be happy with £30m next year.

“It’s very tough at the moment, with a lot of schemes still on hold.”

Austin Donohoe, the company’s chairman, announced the results last night at the company’s annual general meeting, which was held at Durham County Cricket Club.

The major shareholders are North east businessmen Michael Hogan, Jack Lumsden and Tony Carroll. A large number of the firm’s 1,000 staff also own shares in the business.

The firm opened its office in Thorpe Park, Leeds in 2007 with the support of the late football manager Sir Bobby Robson.

Mr Donohoe said last night: “Esh Group is in a strong position to ride out the construction market downturn. We’re committed to a clear strategy which is working. We will continue to look outside the North East, which is being hit harder than most as far as construction goes, to develop our business.”

Success of cost cut drive

THE Esh Group’s overhead costs have been cut by £1.2m in the first six months of 2012, and its turnover and operating profit are both ahead of plan, according to Brian Manning, the company’s chief executive.

He added: “Although we’re ahead of plan for 2012 the lack of visibility of forward workload is a real problem; it’s very difficult to project beyond six to eight months.

“One thing we won’t be doing is moaning; we’ll keep working hard and exploring all means to move the business forward. In the main, we are happy that we are doing all we can and we’re very proud and pleased that our people are responding to the challenges.”