Benson reveals loss of £700,000

Benson Group has unveiled a pre-tax loss of £700,000. All four of the start-up divisions created since the management buy-in (mbi) five years ago are running profitably, but during 2002 the company's original Reigate-based operations ran into difficulties.
Latest annual financial figures (12 months to 31 December 2002) show Benson's turnover ahead at £108m (£101m). But after a pre-tax profit of £600,000 last year, the group went into the red as a result of £2.5m losses in the original part of the business.
Benson had an annual turnover of £14m at the time of the mbi led by Alistair Sloane, managing director, in 1998. He has subsequently formed three start-up regional construction divisions based in Southampton, Hatfield and Birmingham, as well as a new fit-out division in London.
"All the start-ups are profitable," said Sloane. "The only drawback was the original business which has more than doubled to a £33m turnover. We bought a relatively clean business and expanded with the existing guys, but while the management was fine for the £14m turnover it struggled with the greater size."
Sloane has solved the problem by bringing in Rob Leitch, formerly with Wates, as the new managing director and adding Ashley Ward, from Willmott Dixon, as commercial director.
"We closed the original team in July 2001. It wasn't so much the projects or the bidding process, rather it all revolved round the people. The difficulties were both among senior management and individuals lower down - the reality of life is that if you have good guys at the top they attract better people to work for them.
"Effectively we've closed down the business that we bought and have started up afresh in Reigate. In fact that part of the Reigate business is doing well - so you had one part at Reigate achieving an operating profit of £1.5m while the other ran up the £2.5m loss."
Benson has given a larger swath of its top employees a share in the company. Apart from the 22.5% holding by venture capital group 3i, the balance is now shared by 13 senior managers - previously the number was eight. Funding for the extra shares called for an injection of £820,000 of new equity.