T Clarke: seven loss-making subsidiaries identified

Seven of T Clarke’s regional operations lost money last year, with the three biggest hits being taken by Anglia Electrical Services, Mitchell & Hewitt and SCS Building Services.

In total, these three accounted for losses running to £1.6m made up of:

• Mitchell & Hewitt – loss of £600,000
• SCS Building Services – loss of £570,000
• Anglia Electrical Services – loss of £460,000

At the other extreme, there were stunning profit margins in other areas of T Clarke’s regional operations:

• T Clarke (Midlands) led the way with a figure of 14%
• Veale-Nixon was close behind with a margin of 12.4%
• H & C Moore also sparked with a 7% return.
• In the case of SCS Building Services, when the business was acquired close to two years ago it was carrying work won at negative margins.

Much of the latest loss (12 months to the end of December) relates to legal costs uncured when Allan Smith brought a case before an Employment Tribunal. Smith was dismissed as managing director of SCS Building Services shortly after it was acquired by the T Clarke group in 2005.

SCS previously traded under the name of Smith Contracting Services.

Smith was dismissed for gross misconduct and tax evasion. He appealed to an Employment Tribunal but withdrew his unfair dismissal application at the half-way stage of the hearing.

SCS Building Services is now on much firmer ground and in the current year is reported to be one of the group’s best-performing subsidiaries.

A round-up of the other regions shows:

• A G Aylward Electrical & Mechanical Services went into the red to the tune of £260,000 after being hit by a bad debt
• Anglia Electrical Services’ £460,000 loss has resulted in a change to the management team.
• Mitchell &  Hewitt has also been tidied up by management changes as a result of its £600,000 loss
• JJ Cross might only have lost £19,000 on a turnover of £5.6m but this has  also triggered the arrival of new management
• T Clarke looks to be sailing into brighter waters, three City analysts having issued forecasts for both 2007 (the current year) and 2008 which show a steady rise in the group’s pre-tax profit figure, over and above the £6.6m profit achieved in 2006.

An anticipated profit of £8m in 2007 has been pencilled in while there is the further expectation of T Clarke hitting between £10m and £11m in 2008.

The group appointed a new finance director, Victoria Friend, in April.

The results: