Sales setback as Fulcrum endured challenging year

UTILITY services firm Fulcrum said its performance over the last year had been slower than anticipated as it reported a five per cent drop in annual revenues.

The Sheffield-based business said revenues for the year to the end of March 2013 were £38.8m, compared to 41m the previous year. But it recorded underlying Ebitda of £1.3m, reversing a loss in earnings of £2.1m the previous year. Its pre-tax loss figure narrowed from £5.6m to £1m.

Phil Holder, chairman of Fulcrum, said “The performance of Fulcrum over the past year has been slower than anticipated against a backdrop of a challenging construction sector and generally constrained demand for utility connections.

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“This is reflected in a disappointing sales performance with the progress of the business having been considerably slower than the board had hoped.”

But he said that the company has achieved “significant progress” in delivering a robust gross profit margin and further efficiencies in the operating cost base.

The company also spoke of “some signs emerging of improvements in the market”. It said the housing development sector is opening up and there are some specific sectors of the market where Fulcrum is well placed to win more business. 

Gross margin improved from 34 per cent to 39 per cent, Fulcrum said. Its operating loss before exceptional items was £900,000, compared to a loss of £3.5m the previous year. Administrative expenses reduced by 19 per cent to £15.9m, while cash balances dropped by £6.4m to £1.9m with an overall closing net debt position of £100,000.

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Martin Donnachie joined Fulcrum as interim chief executive on May 7, following the departure of former chief executive John Spellman.

Mr Holder said: “Martin Donnachie joins the business at a time when the focus must now be on driving revenue growth and his track record of building successful teams and putting customer service at the heart of the business gives me confidence in the future.”

Mr Donnachie will serve as interim chief executive for a minimum of six months whilst Fulcrum seeks the appointment of a full-time chief executive to lead the business in the long term.

Mr Donnachie said: “In the short period since I arrived I have found a business with significant potential and some excellent people.

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“It is clear that Fulcrum is a well-respected brand in the market and it is important that this is reinforced by building an efficient business capable of delivering first class customer service.”

Fulcrum said Mr Donnachie brings to the company “considerable experience” gained from a range of interim leadership roles and, prior to that, 12 years of experience in the house building and construction services sectors, most recently with George Wimpey and Rok.

Fulcrum also said in the year it had signed a new framework contract with npower to provide commercial and industrial utility connections services. It also clinched a £7.6m contract with Chivas Brothers and Angus Dundee Distillers to provide gas infrastructure to four distilleries in the Highlands of Scotland.

The business constructed and managed infrastructure to deliver gas to the London 2012 Olympic flame, the Olympic Park, the Athletes’ Village and nearby Westfield Shopping Centre.

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