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Harry Neal sees turnover rise despite margin freeze
00:00 05 Aug 1998
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Harry Neal (City)'s turnover in 1998 is roaring ahead, yet margins
are frozen at barely sustainable levels, director Roger More said
this week.
"There's no difference in margins," he said. "If you add one per cent you don't win the job. The period where people were buying work came to an end, but now it's gone back a bit because there is not enough work."
More puts the blame on the switch of tradesmen who were formerly self-employed but are now company employees: "Once you have more of your own labour you need to win work," said More. He estimates on-site labour to be 7.5 per cent more costly than 12 months ago.
Harry Neal (City) employs a total of 100 staff and on-site employees, double the number 12 months ago. Senior staff were taken on in anticipation of a greater workload. Last year's turnover of £9 million is expected to jump to £15 million this time, partly as a result of the company winning more large contracts.
"We've noticed an upturn of workload in London," said More, adding that the turnover splits between refurbishment (75 per cent) and new build (25 per cent), virtually all being within London.
The biggest is the £5.5 million conversion of a property in Portman Square to a private members' club.
Neal is also undertaking a £4 million conversion of a former bottling plant at Three Mills Island to dance and record studios. Repaving and refurbishing the external area at St Katherine's Dock has a £2.5 million value.
The Harry Neal Group had a turnover of £30 million at peak, before hitting problems at the end of the 1980s. After developing properties it found that it couldn't sell them, while other properties it was sitting on fell in value. The group went into liquidation with debts of over £100 million.
"The main company went down but Harry Neal (City), a subsidiary, kept going," said More. "Turnover has grown from £3 million and we've been in the black ever since, making a pre-tax profit of £150,000 last year."
"There's no difference in margins," he said. "If you add one per cent you don't win the job. The period where people were buying work came to an end, but now it's gone back a bit because there is not enough work."
More puts the blame on the switch of tradesmen who were formerly self-employed but are now company employees: "Once you have more of your own labour you need to win work," said More. He estimates on-site labour to be 7.5 per cent more costly than 12 months ago.
Harry Neal (City) employs a total of 100 staff and on-site employees, double the number 12 months ago. Senior staff were taken on in anticipation of a greater workload. Last year's turnover of £9 million is expected to jump to £15 million this time, partly as a result of the company winning more large contracts.
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"We've noticed an upturn of workload in London," said More, adding that the turnover splits between refurbishment (75 per cent) and new build (25 per cent), virtually all being within London.
The biggest is the £5.5 million conversion of a property in Portman Square to a private members' club.
Neal is also undertaking a £4 million conversion of a former bottling plant at Three Mills Island to dance and record studios. Repaving and refurbishing the external area at St Katherine's Dock has a £2.5 million value.
The Harry Neal Group had a turnover of £30 million at peak, before hitting problems at the end of the 1980s. After developing properties it found that it couldn't sell them, while other properties it was sitting on fell in value. The group went into liquidation with debts of over £100 million.
"The main company went down but Harry Neal (City), a subsidiary, kept going," said More. "Turnover has grown from £3 million and we've been in the black ever since, making a pre-tax profit of £150,000 last year."
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