Eric Wright sees 'pause' in NHS projects

NHS Primary Care Trusts (PCTs) are already reviewing their spending on health projects in anticipation of a change in government, Eric Wright Group's financial director has indicated.

The comments came shortly after the company unveiled its financial results for the year to 31 December 2008. Turnover at the group fell almost 29% to £117.2m, while the company made its first-ever pre-tax loss of £1.6m after £4.9m of writedowns in commercial property and residential development schemes.

The picture in the company's construction division was more positive - it made a profit of £2.2m, up from £1.8m, despite a fall in profit to £96m (£125.4m).

The firm is on the £1bn NHS Express LIFT framework, and has recently won a spot on the £4bn Academies framework in partnership with Shepherd Construction.

Eric Wright financial director Jeremy Hartley said: "There has been a decline in volumes driven by the market, but the group iself has been quite fortunate to have a number of public sector clients' workstreams which have provided a degree of a buffer against the sharp downturn that the builders of purely commercial developments have experienced."

But he warned that the future for public sector construction was less certain, although there was not currently evidence of workloads falling significantly. "I think it is slightly more difficult on the construction side. A lot of the NHS healthcare work may be susceptible to a change in policy or indeed a change of government. So you are seeing PCT bodies pause for breath and look at what their commitments are," he said.

Meanwhile, the company's civil engineering division, which increased turnover to £25.1m (£19.9m), is expected to continue to make steady progress as it continues to win work through framework agreements with United Utilities, the Highways Agency and the Environment Agency.

Hartley said that he expected Eric Wright's 2009 results to remain broadly in line with those it recorded in 2008. "We don't see the construction work bouncing back particularly quickly, so we are just looking to maintain modest growth and focus on consolidating the key business streams. That is what has happened in 2009 and it is what we hope to do in 2010," he said.