NG Bailey falls into £10.8m loss

M&E giant NG Bailey has warned that 2009/10 will be a "difficult" year, as it unveiled a £10.8m pre-tax loss.

The loss came despite a 14% rise in turnover to £600m for the year to 27 February 2009.

"The tightening market conditions will make 2009/10 a difficult year for the group, with the downturn in activity resulting in margins being squeezed," the company said in its directors' report.

It added that it saw a "significant proportion" of its future work in the public sector, but warned that this could be affected by a change in government policy.

The past year has seen mixed fortunes for the business, as some areas of the group saw "significant" growth, while others were hard-hit by the downturn.

NG Bailey said that its Building Services arm saw particularly strong growth. But it said that an increased volume contracts at an early stage of completion within the division was in part to blame for falling profit margins.

Meanwhile the group's bottom line also suffered as a result of having to make a net write-down of its assets of £12.1m. It also saw its pension fund slip into a £20.9m deficit, from a £6.3m surplus in the previous year.

But the firm stressed that the net balance of group deposits and investments still stands at £76.2m, compared with £88.6m in the previous year.

NG Bailey's highest-paid director took a 20% cut in their pay packet. Pay including long-term incentive plans not yet payable fell from £831,000 to £659,000.

The average number of people employed during the year increased slightly to 3,898, from 3,884 in the previous year.