North East divison aiming for £40m annual turnover

Aug 11 2009 by Chris Knox, The Journal

THE North East office of a national building company believes it can achieve its target of adding £5m to its £45m turnover by 2010 after securing a stream of contracts in the education sector.

Although London-based Morgan Ashurst has seen its half-year profits drop from £33.1m to £23.9m, its offices in Durham continue to defy the recession after increasing sales to £45m since being established in 2007.

The office, which has 77 staff, has been instrumental in ensuring that the company’s national sales have kept in line with its expectations during the recession, with the North East contributing £13.1m in new contracts during the six months to last June 30.

The Durham site, at Belmont Business Park, recently secured an £11.2m contract to build a four-storey graduate teaching centre for trainee dental technicians and hygienists, as well as sports therapists for the University of Teesside.

It also recently won a £997,000 contract from Stockton on Tees Borough Council to build an extension to Layfield Primary School, which will accommodate a children’s centre.

Projects the firm is already working on in the region include a £21m scheme to improve Stockton Riverside College and Bede Sixth Form in Billingham.

The firm now believes its success in the education sector will allow it to increase its turnover to £50m in the North East by the end of 2010, and said it had already secured £31m of work for the year. Morgan Ashurst director David Smailes said: “Despite challenging market conditions, we remain busy and our order book for next year is looking secure with most of our work coming from public sector projects, repeat clients and long-term construction frameworks.

“The business is financially strong and well placed to take additional market share over the next 12 months as more organisations procuring construction make the flight to quality and security to reduce their risk.” Morgan Ashurst, which is owned by parent group Morgan Sindall, operates through six specialist divisions of fit-out, construction, infrastructure services, affordable housing, urban regeneration and investments, and saw its revenues drop to £1.14bn during the six months from £1.24bn at the same time last year.

While the group’s forward order book is down from £4.2bn to £3.6bn, the board has declared a maintained interim dividend of 12.0p. Mr Smailes said: “Despite the ongoing problems faced by construction companies as a result of the recession, we are quietly confident of being able to grow our operations here in the North East.

“We have built up good relationships with our public sector clients and believe we will start to receive more work in the private sector over the coming months as the economy begins to recover.”