Northern Bear cheered after £6m of new orders

Oct 14 2009 By Peter McCusker, The Journal

BUILDING services firm Northern Bear has announced over £6m of contract wins but says trading remains tough in a sector that is still to show any signs of sustained recovery.

The new orders are primarily with public sector housing providers and have been secured by four of the firm’s 13 companies.

Graham Forrest, chief executive of the Chester-le-Street-based firm, remains cautiously optimistic despite conceding the market is very challenging.

He believes that it is better placed than some of its competitors with it benefiting from its wide spread of businesses, many still operated by former owners with experience of previous downturns.

Mr Forrest said: "It’s very tough out there. We are currently enjoying a good spell. However, like many businesses we are experiencing challenging trading conditions as a result of the depressed economic climate.

"One of our strengths is that we have a good spread of businesses, many of which have been run by the same people for the last 25 years. They all know how to make money and are the ideal people to have in place during times like these."

Northern Bear was floated on the stock market in December 2006 and now employs 500 people in its Durham headquarters and its 13 businesses across the building services sector.

In the 12 months to March this year it posted record sales of £42m and pre-tax profits of £2.9m.

At the time the company also announced it had cleared almost £2m of debt, bringing bank borrowing down to £9.3m, a level of borrowing which is currently costing the company about £1m a year in interest charges.

Northern Bear is still in discussions with its bankers in respect of some of its banking facilities and says it hopes to make a further announcement at the time of its half-year results next month.

The contracts wins announced yesterday include £2m by Jennings Roofing for reroofing work for a North West housing association and Springs Roofing has been awarded a £1m contract for reroofing works via a North East consortium of social housing providers.

A company statement concluded: "The new contracts described above, totalling in excess of £6m, will contribute significantly to revenues and profitability during the second half of the financial year."

Bear also announced yesterday that David Jay will step down as finance director but will remain on the board as a non-executive director.

He has been replaced by Steve Roberts, currently a non-executive director, who was the finance director of the company at the time of its flotation.