Directors at Durham construction specialist MGL Group have hailed strong trading after boosting revenues despite the pressures of labour and materials shortages.
The Durham based business said it had accrued a record order book across all divisions, resulting in turnover returning to pre-pandemic levels, rising from £56.4m to £70m in the year ended March 31. But it said margins were squeezed by inflationary cost pressures across its supply chain, leading to pre-tax profits falling slightly, from £3.16m to £3.04m. Operating profit also fell, from £3.224m to £3.081m and overall profit for the year was £2.34m, down from £2.56m.
The business – which won five awards from the Civil Engineering Contractors Association North East – is overseen by founder Alan Davison’s son and son-in-law, while his daughter is a group director, and third-generation family members have also recently joined the company to support its future.
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In the accounts, joint CEO Mark Davison says: “Margins have fallen, this is explained by the fall in turnover within the MGL Cable Service business unit and also the significant cost pressures felt across the group across raw materials, fuel and payroll. Despite these challenges, it is encouraging that the business continues to show resilience and produce such strong financial numbers. The board of directors are incredibly grateful to our talented and hard-working workforce for their part in the performance of the MGL Group.”
During the year the company also acquired specific assets of Alnwick based KW Purvis, including Longhoughton Quarry, bringing all 33 members of staff into the group. The firm said it also continues to invest in employees through apprenticeships, on-the-job training and work experience placements, with 29 apprentices currently working across the group.
MGL Group, which had 371 staff in the year and now has more than 400, said it also works hard to reinvest in its local communities, and since it was established in 2016, the MGL Foundation Trust has donated over £100,000 to worthwhile causes, alongside two minibuses for local disabled children.
Looking ahead, Mr Davison said the board and senior management are continuously looking at potential opportunities to expand and further diversify the business.
The company is on the Teesworks Demolition Framework, which is potentially the largest demolition and site clearance project in Europe, which has the potential to generate a consistent flow of works in the next five years. The board has also recently entered into an option agreement for a potential new asphalt plant on the A1 corridor in North Yorkshire
Mr Davison said: “Whilst the board continue to be mindful of uncertainties around material and labour cost pressures, we have had a satisfactory start to the current financial year, we maintain strong order books and cash reserves. We are working hard to integrate the new quarrying operations, assets and employees into our business and hope that this will lead to supporting turnover and profitability throughout the 2023 financial year and beyond.”
He added: “We work with a range of clients and have a fantastic team who are champions for our company, embodying our core values. Rainton Construction is part of the project delivery team for K2 Construction Management, developing the monopile facility for SeAH Wind which will establish the region’s position as an alternative energy powerhouse. MGL Demolition is enabling regeneration in our cities and towns by undertaking a range of exciting demolition projects such as Sunderland Civic Centre, Pilgrim’s Quarter in Newcastle and also the Castlegate Shopping Centre & Swallow Hotel in Stockton.
“This is a really exciting time for the North East and we are proud to be part of the transformation.”
Joint chief executive Dave Elliott added: “After the pandemic we continue to think outside of the box and by working together we are overcoming industry challenges and maintaining operational excellence. Every project, every client, every relationship is nurtured and the passion, commitment and expertise of our people ensures we maintain high standards and deliver what we promise, every time. We are so proud of our achievements, it’s a real testament to teamwork.”
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