Keepmoat core business ‘strong and profitable’

Group chairman Peter Warry said that Keepmoat, an employer of 3,200 people, is “now a very different and much stronger company” than it was at the beginning of its financial year.

On a pro-forma basis, the Doncaster-based group recorded revenues of £1,036.2m, compared to £1,044.3m in 2011, while its Ebitda (earnings before interest, taxes, depreciation, and amortisation) before exceptional costs stood at £56.6m, down from £93.5m in 2011.

The group’s Ebitda post exceptional costs dropped to £19.6m, from £88.3m in 2011, according to accounts filed at Companies House for the year to the end of March 31, 2012.

The company said that the reduction in Ebitda reflects “a number of challenges faced by the business during the year including a significant reduction of work stemming from the Government’s Decent Homes initiative replaced by lower margin, tendered, design and build contracts, a number of which became loss making”. However, the group said that notwithstanding those issues, Keepmoat’s core business remains “strong and profitable”. The Decent Homes initiative aims to improve sub-standard social and private housing for vulnerable people.

Last month, Keepmoat revealed that it had appointed a new chief executive and secured a refinancing agreement.

It was also confirmed that 250 people have been made redundant over the previous four months at Keepmoat, following its merger with Apollo in March. Keepmoat is now owned in a partnership between management and Lloyds Banking Group.

Following the merger, Ian Sutcliffe, the company’s chief executive, decided to step down. Dave Sheridan, previously head of Keepmoat’s northern business and before that CEO of Apollo, became chief executive. Mr Sheridan said that the outlook for the merged company is “much more positive than it would have been for any of our businesses individually”. The group said its debt has been “reduced substantially” following the refinancing.

According to the accounts, compensation for loss of office for the highest paid director in the year was £426,000.