NG Bailey turnover hits £520m - but profit halves to £8m

N G Bailey has broken through the £500m-a-year barrier for the first time, its latest annual turnover having reached a figure of £520m.

Turnover in the previous year was £470m.

However pre-tax profit went in the other direction, dropping from £18m in 2007 to £8m in the latest set of financial results which cover the 12 months to 29 February 2008.

The directors of the private M&E group report that the success of the 10% growth was “impacted by rising cost of sales and some challenging contracts particularly in the rail sector”. These ate away at expected profit margins.

The report continued: “The application of good procurement practices and supply chain management and efficiencies in installation methods continue, but these cannot completely counteract the increase of cost in some commodities used.”

Bailey said that the outlook for the coming year is positive and the group’s orderbook is the strongest-ever.

Despite profits falling by more than a half, the highest-paid director enjoyed the comfort of a pay rise, taking home £831,000 which was £127,000 more than in the previous year.

His latest figure comprises £509,000 of direct pay and another £322,000 by way of the long-term incentive plan.

The number of employees rose to 3,900 and of this number 1,900 are hourly paid.

Bailey’s wage bill rose to £128m.

Details of the state of the group’s pension scheme show a startling transformation of fortune, moving from a yawning deficit of £19m back in 2007 to a surplus of £6m in just the space of 12 months.

That change is not the result of the group feeding in a massive sum of new money but rather that the scheme’s stated liabilities were cut back from a figure of £180m a year ago to a much lower latest figure of £151m. Assets went in the opposite direction, climbing from a value to £153m in 2007 to a stronger figure of £160m now.