Owen Pugh bucks the trend with turnover rise
Sep 21 2010 by John Hill, The Journal
CONSTRUCTION and demolition firm Owen Pugh said its turnover rose slightly to £20.4m in the year to the end of March, compared to £20.3m the year before but saw its earnings slip.
The Northumberland company said profit after tax fall to less than half of the £803,000 recorded in 2009, hitting £350,000 in the latest financial period.
Chairman John Dickson said he was “delighted” with the results, which were achieved as the industry battled a collapse in demand followed by a fall in contract prices last year.
He said the company prioritised the retention of staff over profit margins during this time. Owen Pugh bucked an industry trend by increasing its workforce slightly from 245 to 248 in the last financial year, and Mr Dickson said it has continued hiring to bring its staff levels up towards the 300 mark.
He said: “We did everything we could to avoid redundancies, and we were prepared to sacrifice profits to hold the team together and keep the volume of business going.
“It’s been tough because of the economic circumstances, but we’ve come through and been able to hold onto the team, the turnover’s up and we’ve made a profit as well. As far as we can tell, we’ve outperformed the marketplace. It’s a very good time to take people on because there’s a lot of people out there looking for work. Most of our competitors have shed employees like mad.” Owen Pugh worked on projects at Nissan’s battery plant and the BAE Systems site in Washington over the winter, and has completed the acquisition of HCS Drain Services since the turn of the financial year, while working on further organic growth.
It claims turnover above £25m is “achievable” this year, as well as future growth sparked by its investments in new staff, processes, plant and business. Mr Dickson said: “We’ve seen some recovery in the market, but we’re now back in very fragile territory and we’re waiting to see what happens after the spending review in October.
“Personally, I believe the economy is strong enough to handle whatever cuts may come but it depends how the industry reacts. I just needs one or two jobs to pause to give others cause for concern, and before you know it everything comes to a standstill for a little while until people realise it’s okay to start building again.
“We do anticipate further expansion in future. We have a long term plan to develop the business over the next five to 10 years and assuming we get through the next few months okay, we want to be a full-scale civil engineering contractor for the North East region from Berwick to the Humber.”
