Clark Contracts reports further dip in pre-tax profit

Clark Contracts has suffered a further fall in pre-tax profit to just £93,000, almost half the figure of £160,000 in the previous year.

Two years ago Clark’s profit ran to £740,000.

Clark’s latest figures cover the 12 months to 31 October 2007. They show that turnover was down, at £36m, after running to £45m in the previous year.

Steve Clark, executive chairman, said in a statement accompanying the figures that 2007 was one of the most significant in the company’s 30-year history.

“We took the decision to focus more on better margins,” he said. “This has contributed to a short-term reduction in sales.”

Backing this up, Gordon Cunningham, managing director, said the construction business had an average of 16 contracts live at any one time in 2007, compared with an average figure of 24 in the previous year.

Cunningham added that the pre-tax profit fell because Clark used its own cash to finance a new headquarters building.

The legacy of two under-performing contracts handled in 2006 by Clark Construction also ate into profits. The issues have now been resolved.

When judging Clark group’s results in terms of profit margins achieved, an already-low figure of 0.35% in 2006 slipped closer to break-even last year by running out at just 0.25%.

The changes to the group’s structure have involved splitting the construction division into three:

• Construction West
• Construction East
• Fit-Out

The percentage of work won through negotiated and framework deals is at a three-year high while repeat business now accounts for 80% of annual turnover.

Clark says that its work includes construction, building refurbishment and property maintenance throughout the UK.

The highest-paid director received a pay of £108,000 which was £15,000 higher than Clark’s latest pre-tax profit figure.

The bill for wages and salaries ran to £6.2m.

Last year the group had 243 employees, this total being made up of two elements: staff (102) and tradesmen (141).

Clark was a one-man business when founded in 1978. It now undertakes contracts worth up to £7m and is particularly active in the leisure, retail, office and public sectors.