Wrekin Construction: back in profit at £1.7m

Wrekin Construction’s promise that its new ownership would waste no time in putting the business back on its feet has been delivered – Wrekin’s latest financial figures show the group to be back in profit.

Turnover of £60m in the nine months to 31 December 2007 (a move to bring the year-end back to normal) generated a pre-tax profit of £1.7m.

In the previous 12 months Wrekin suffered a loss of £9m on turnover of £100m.

Last year, when David Unwin stepped in and bought Wrekin from its former owners, the Frain family, he poured in £11m of cash, ended its “expand at any cost” policy and said that once loss-making legacy projects were complete the group would turn the corner.

Wrekin has delivered on that expectation.

“The whole board is working as a team,” said Peter Greenwood, joint managing director. “Today, we can see that what we are doing is of value. The brighter approach flows right through the business so that the sites are happier and when your people are happy they produce more work and that results in extra profits.

“The board are all people who you can talk to. Not only that, but we are on sites, living and breathing with our teams. With being on sites so often, if there is a problem we can get involved; can help to sort it out, while if things are going well we can offer a pat on the back.

“When senior managers are down a hole in their wellies, on the platform that your site staff feel that they ‘own’, they’re really pleased that their boss has come in person and seen for himself that they’re doing a good job.”

Wrekin has 650 staff. “The green shoots of recovery has already had an effect,” said Greenwood. “Eight good people who had left in those harder times have now come back.”

Wrekin’s average contract value is around £4m with the price range runs from £500,000 up to £10m.

Mark Breen, director, said: “We are bidding work at margins 0.5% down on 12 months ago. That’s because of the greater competition as a result of the credit crunch. The work available out there is tightening up and it will get tighter. People are keen to build their orderbook up already so they have a good horizon when tougher times come.

“At Wrekin, we’re unique in having David with us. Through Tamar, his other business, he’s looking to become a developer in his own right.”

The annual turnover of Wrekin’s main operations in 2008 is expected to be:

• Wrekin Rail - £25m
• Wrekin Construction (West) - £50m
• Wrekin Construction (East) - £25m

Asked what would constitute a success a further 12 months down the line, Greenwood said:

• Between £100m and  £110m turnover
• £4m pre-tax profit
• £10m in the bank

“We’ve been happy to hit a 1.6% margin this year,” said Greenwood, “so 4% would be a diamond result for us.”