Sales soar as job-cut builder goes green

Aug 5 2008 by Chris Knox, The Journal

ONE of the region’s biggest construction groups has increased its turnover by almost a third despite shedding jobs at its housebuilding business.

County Durham’s Esh Group saw sales increase from £115m to £152m in 2007 and believes it can continue this ascent despite the downturn affecting the North East construction market.

The firm made similar gains in annual profits, which grew from £7.3m to £10.2m.

However, its housebuilding arm Dunelm has suffered as a result of the stagnant housing market. It recently cut its 190-strong workforce by 40 and is considering further job losses.

The losses at Dunelm, which accounts for £30m of Esh’s revenues, mirrors the wider picture in the North East housebuilding market.

Newcastle groups Barratt Developments and Bellway have recently announced plans to cut 1,200 and 250 jobs respectively after delivering a series of profit warnings.

Esh chief executive Brian Manning said: “Although we have seen growth in most area of the business, Dunelm has not been immune to the current market.

“Unfortunately we have been shedding jobs at the operation as a result and expect its sales to drop over the coming months. We are in consultation over further job losses.”

Despite the housing gloom, Mr Manning is still optimistic about the future of the group after the recent acquisition of wind farm constructor Pure Renewable Energies and Green Energies, which designs and installs green energy equipment for the home.

He believes they will help replace some of the group’s housing losses and could provide jobs for the redundant workers.

“Although the two companies have yet to come on stream in terms of sales, there is a lot of opportunity there for cross-over into the housebuilding market.

“We try to repatriate those that have lost jobs back into the business if we can.”

The group, which employs 1,100 staff in its 14 businesses, is confident of sustaining a healthy order book.

This includes maintenance work with Yorkshire Water and Northumbria Water through its civil engineering arm Lumsden & Carroll and house construction on behalf of four councils in the region.

Mr Manning said: “It’s because we have such a wide range of projects on the go at any one time that we have been able to make a profit.

“Adding to the size of the group over recent years has helped us achieve this. However, with the market the way it is, we are now looking to consolidate what we have.”