From the past to the future, results see group on right path

Shepherd Group '‹is looking to expand its Portakabin portable buildings business in the UK and overseas following strong results.

The York-based group​​ said that Portakabin currently operates in the UK, France, Ireland, Belgium, Luxembourg and Holland.

It said that UK growth will come through expansion of its 50 existing depots while European growth will come through extending its footprint in France and Germany, both through organic growth and acquisitions.

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A spokesman said: “We are also looking closely at the Scandinavian market for possible future expansion. Our most recent acquisition was in Germany - in 2013 Portakabin Ltd acquired Oecon Mobilraum and its subsidiary companies.”

Net profits from continuing operations rose to £36.7m in the 18 months to December 31 and Shepherd said it has seen strong trading in the first half of 2016. In the year to June 2014 it made net profits of £10.1m on continuing operations.

Demand from the health and education sectors has driven growth, although Portakabin said it enjoys a broad market spanning the public and private sectors in offices and retail.

“The demand for modular buildings is rising and, as market leader, Portakabin is at the forefront of this growth,” said the spokesman.

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“Traditional construction can be unreliable with regard to budget and deadlines whereas Portakabin has completed 99.7 per cent of its projects on time and on budget every year since 2003. Contrast this with the latest construction industry data which shows that 60 per cent of projects were delivered to clients late in the past year.

“Off-site construction is highly predictable, which helps construction clients reduce risk with far greater assurance of completion on time and on budget – often to extremely challenging deadlines and on complex, fully operational sites.”

Portakabin’s recent contract wins include the largest ever off-site contract in the education sector– a £44m project to deliver an innovative, three-school campus for the London Borough of Barking and Dagenham.

Portakabin has also been awarded the £14m design and build contract for the UK’s first university technical college to be built off site. Opening in September, the Global Academy in the London Borough of Hillingdon will provide academic and vocational training for 14 to 19 year olds who want to work in the broadcast and digital media industries.

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Portakabin Hire recently won a £13.5m contract, the largest in Portakabin Hire’s 53-year history, for the provision of a complex, 4,200sqm, two-storey building at Royal Stoke University Hospital.

Shepherd, one of Yorkshire’s biggest family-owned businesses, sold a large chunk of its non-core operations to ​Wates Group​ last year to allow it to focus on its core Portakabin business.

Shepherd ​sold its Built Environment businesses​,​ Shepherd Engineering Services (SES) and Shepherd FM, together with a significant​ ​number of contracts and strategic frameworks from Shepherd Construction Limited, to Wates Group​. The Shepherd Homes business was sold to​ ​Galliford Try’s house building arm, Linden Homes.

The ​disposals were in line with the ​b​oard’s strategy to improve the quality of​ ​earnings by growing the profitable, lower risk businesses and reducing exposure to​ ​less profitable, higher risk operations.

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​The group’s former Built Environment businesses recorded a loss which, along with disposal and restructure costs, resulted in an overall loss after taxation of £28.1m for the group as a whole.

​Shepherd said the results for the Built Environment activities reflect a number of challenging contracts. The group, which made a turnover of £879.5m during the 18 month period, said it has a strong balance sheet.

Shepherd Group’s chairman David Williams said: “These diverse results illustrate both the recent past and the promising future of the Shepherd Group.

“The past is reflected in the losses arising out of a small number of very challenging​ ​legacy contracts experienced by the divested contracting businesses. We​ ​recognised these operations needed greater scale to deliver the full potential offered​ ​by their exceptional technical capability and they were successfully transferred to​ ​Wates Group who are well positioned to strategically exploit these businesses.”

Shepherd Group Engineering​ ​moved from a loss making position to break even towards the end of the reporting​ ​period​ after changes to the management team.