Spade Oak Construction makes 7.9% profit margin

Spade Oak, the asphalt surfacing contractor, has unveiled a sparkling profit margin of 7.9% as pre-tax profit lifted to £2.0m.

The previous year’s performance also bubbled over, with profit margin in 2006 running to 8.2%, after profit ran to £1.6m.

Spade Oak’s latest financial year covered the 12 months to 31 December 2007, during which period turnover ran to £26m (previous year: £19m).

In a statement, the directors said: “The markets in which Spade Oak operates allowed little opportunity for expansion, with profit margins continually under pressure.

“Maintained efficiencies and the control of overheads produced a 2007 result to match [the one] targeted.”

One key performance indicator used by Spade Oak is LTIFR (lost time injury frequency rate) which is the number of lost time incidents per one million hours worked. The latest figure of 3.54 was 32% lower than the previous one of 5.18.

Spade Oak’s latest £2m profit triggered the payment of a £4.5m dividend to shareholders.

The group said that one competitive risk it faces is the poaching of experienced, time-served personnel.

2008 represents an opportunity to push turnover higher, said Spade Oak, given the growing momentum of the Olympics and other major publicly-funded construction projects.

The group has made an “above average” start, giving it a “solid foundation” for the year.

The group has 139 employees divided between administration (34) and roadmen (105).

The bill for wages and salaries was strongly ahead at £4.8m, a rise of 25%.

Spade Oak’s ultimate parent company is Holcim.