Tyneside construction company Meldrum Group has booked a £260m pipeline of orders on top of a strong trading year in which turnover almost doubled.
The Gateshead group of companies, which includes Meldrum Building Services, Meldrum Fire Engineering and Meldrum Plant and Transport, published accounts for 2022 showing turnover rose from £26m to £50m as it returned to a “new normality” after the pandemic. The group had an average of 198 employees last year, up from 165, and now employs over 200 people in the North East with offices in Tyneside and Teesside.
It said macro-economic pressures impacted gross margin, decreasing from 14% to 11%, but the group still grew operating profit from £637,437 to £1.62m. Overall profit for the year was £1.36m, up from £775,980, and looking ahead the group has booked a pipeline of work worth more than £260m.
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Dave Meldrum, the group’s founder and CEO, toasted the strong set of results in challenging conditions and said the group was prepared for continuing pressures on the business. Mr Meldrum said the group has been successful in securing a number of significant contracts, some of which stretch into their 2024/25 pipeline, ensuring the business is robust and sustainable.
He added that the company remains cash positive and has a strong credit rating – scoring 85 out of 100 in its D&B rating – which he said should “provide some comfort to its current and potential clients/suppliers that the company will continue to provide its quality service and construction needs”.
He said: “Detailed business plans and a confident recruitment strategy allowed us to prepare through the period for the anticipated increase in volume through the year to end of 2022. This anticipated increase has been seen to turn into a reality with the group currently being forecasted to deliver circa £57m through 2023 and are indeed already seeing contracts secured into 2024. At the same time, business development initiatives continue to provide results and our pipeline currently stands at approximately £260m in value, with a number of further contracts currently at final stage negotiations.
“2022 continued to be challenging for the whole construction industry with a lack of skilled resources across a number of disciplines continuing to place huge inflationary demands on wages as companies competed for fewer available candidates. The company continued to add initiatives to focus further on staff training and development, flexibility and welfare as well as enhanced remuneration packages to aid with both retention and recruitment.
“As a result of success in this area, staff numbers have been maintained above the 200 mark and we look forward to a future with a stable and motivated workforce. The continued demand for construction activities in 2022 still presented major pressures on availability of goods and materials; compounded by soaring energy and fuel costs 2022, brought about by the Russia-Ukraine war and appears to have fuelled the highest inflationary levels witnessed for 20 years and as such demand greater due diligence in both delivery and pre-construction and estimating activities. 2023 is expected to be a year where this inflationary pressure is reduced and commodities prices stabilise. The board believes that the group is now equipped to underpin the wants and needs of the various operating delivery companies.
“As the financial results show, we have seen really pleasing growth within all of the individual operating companies. The board is completely aware that the challenges outlined above still exist for the year/years ahead.”
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