Bosses' pay cut as Esh Group goes into red

Nov 11 2009 by Chris Knox, The Journal

In 2008 Esh posted a 3% sales rise to £156.5m, but the group, which is made up of over 21 companies, was forced to write down the value of some of its land bank in its Dunelm Homes division by £8.31m.

However, the company said it had “succeeded in delivering a creditable set of results, notwithstanding the unprecedented events of 2008”.

Mr Manning added: “Like a number of lager building firms in the region, our housebuilding operations have taken a serious hit.

“However, there are other sides to the business that are making up for the losses and that are showing potential for growth over the coming year.

“Although we are not expecting this to be reflected on our next full year financial report, we do believe that the figure will begin to look a lot healthier in two years time.

“This year has been a test of the groups mixed asset business model, and it is certainly holding its own in that respect.”

Despite profits taking a tumble, the group was able to improve turnover with its infrastructure business Lumsden and Carroll, as well as social housing arm Dunelm Property Services.

Existing Decent Homes contracts, as well as a new contracts with South Tyneside Homes and Broadacres Housing Association, have bolstered the firm’s portfolio.

The firm, which employs more than 1,140 staff, was forced to axe 200 construction jobs in preparation for its last financial year, and, although it said further writedowns may be needed, it is not expecting to make further cuts to staff.

It has also reorganised its financial position after breaking previous banking covenants, and said that the new agreements were more “realistic” and based on cashflows rather than pre-recession profit targets.

Esh Group
Turnover: 2007, £152m. 2008, 156.5m
Profit (loss) before tax: 2007, £10.2m. 2008 (£6.4m) inc £8.3m land writedowns