Esh Group has brushed off problem jobs to return to profit, saying its local focus had allowed it to buck national slowdowns in housing and public sector work.
The North-focused contractor reported a £600,000 pre-tax profit for the 2023 calendar year, up from a £400,000 loss in 2022. Turnover remained steady, increasing slightly from £286.8m to £292.5m, while cash reserves jumped from £12.4m to £16.9m.
The firm also celebrated a strong order book, which topped £1bn for the first time. Esh grew its share of the new-build affordable housing market following “the demise of a range of competitors”, wrote chief executive Andy Radcliffe in its accounts. It also racked up lucrative civil engineering jobs, including a spot on Northumbrian Water’s £3.6bn framework.
Radcliffe described the year as a “game of two halves”, with problem jobs early in the year counterbalanced by contract wins later on.
He said the rocky first half was down to the impact of inflation on ongoing jobs, delays, and “quality issues” resulting from supply chain failures. He added that disposing of the firm’s facilities management business and reducing the amount of commercial building work it took on also hit earnings.
Earnings increased later in the year, as the firm racked up new contracts, which he claimed were “free of inflation challenges”. Alongside the Northumbrian Water framework role, Esh picked up the £35m Tyne Bridge restoration and £36m Stockton Waterfront scheme.
Following a business restructure, the 25-year-old group now focuses on utilities, local authority work and housing.
Utilities proved a boon in 2023 for Esh Group, which it said was “poised to see considerable growth in revenues” following pressure on water companies to invest in wastewater- and flood-management infrastructure.
Despite private housing demand slumping after former prime minister Liz Truss’s doomed mini-budget in September 2022, the company said its Homes by Esh division had weathered the worst of the turmoil, in part because house prices in the North had not fluctuated as much as in the South and Home Counties.
Affordable housing fared worse, with social housing schemes “falling away”, as landlords’ profits fell, and calls grew to improve the standard of their existing stock. The firm also reported that schemes had stalled due to new nutrient-neutrality and biodiversity regulations.
Esh’s local authority work made gains but also faced challenges. Despite pressure on council finances, the company said it had benefitted from the Conservative government’s “levelling up” agenda, which directed investment towards its northern heartland.
