Utilities pay dividends at Wrekin

Wrekin has bounced back into profit at the same time as turnover broke through the £100m-a-year barrier. Chief executive John Evans said he was delighted with the latest results.

Wrekin's figures (12 months to December 2002) show a pre-tax profit of £2m following a loss of £880,000 in 2001 as turnover climbed to £102m (£80m). Gross margins rose from 7% to 10.2%.

Evans would not give details of overheads, but said: "They had been too large for us to run a sustainable business." It was restructuring costs that took Wrekin into loss last year.

Wrekin has five operating divisions: civil engineering; design and build; utilities; rail; and plant hire.

The utilities' turnover jumped to £18m as a result of the Filcom acquisition, now rebranded Wrekin Cable Services. "It will generate £10m of turnover in a full year and was on the market because the owner was 63 and needed a tax-effective exit," said Evans.

"We've always been a serious BT contractor, but beforehand this was only in building and civils, but now, with Filcom on board, we can offer the lot."

Good news in utilities was shaded by a squeeze on opportunities in rail. Evans said: "The Strategic Rail Authority has put its hands on the pulse. We're committed to rail but wanted a lot more volume.

"We worked exclusively as a subcontractor in the past, but now having achieved our Contractors Assurance Case from Railtrack, we can compete in our own right.

"We did a fifth of our rail work directly for the client last year. I'd like to see that figure hit 50% in 2003 and jump to 100% in two years time. Recruitment for growth in rail shouldn't be a problem as we've been training in advance."

Wrekin is involved in station refurbishments and has track widening projects on the West Coast Main Line for Nuttall and Carillion. It will be bidding for work in its own right for contracts within the £250,000 to £10m range.