Eric Wright Group has seen revenues increase by a tenth despite profits taking a hit due to a “disappointing” performance from its construction sector.
Latest accounts show that the group generated a £177.4 million turnover in the last calendar year. This is a 10% increase on the previous year. Meanwhile, profits before tax decreased by 14% to £7.8 million over the same time frame.
Eric Wright Group is the holding company behind the Eric Wright group of companies. The group’s activities include facilities management, property development, civil engineering, contracting and building.
Alongside the accounts there was also a report. In this, chairman Eric Wright stated that “the principal reason behind the reduced profitability was the disappointing performance reported by our construction division.”
Wright continued: “Despite the reduced operating profit in construction, its turnover was £17m stronger in 2015 contributing to an overall group turnover of £177m, some £17m higher than the prior year. The other division which saw a significant increase in turnover during 2015 was the water and civil engineering business up at £42m (2014: £28m).”
The chairman also said that the construction division was unable to meet programme commitments on two private finance initiative (PFI) contracts. As a result were liable for “substantial liquidated damages and incurred significant cost overruns.”
The losses incurred from these contracts were “onerous” because of the conditions associated with PFI contracts and had a severe impact on the results for last year.
He added that the resulting £1.7 million loss saw further increase following the resolution of positions on some legacy contracts. As well as this, general market factors resulted in unforeseen delays to secured contracts starting onsite.
Jeremy Hartley, managing director at the Eric Wright Group, said: “The group made some excellent progress across many of its core businesses in 2015, ending the year with another robust set of financial results – a profit before tax of £9.88m.