NG Bailey has slashed its workforce by 7 per cent and closed its final salary pension scheme as the recession bites.
Its turnover dropped by 23 per cent last year, it said today revealing its annual numbers, down to £464m.
The one bright spot in the numbers is that it is back in the black. It made a pre-tax profit of £19.9m, compared to a £10.9m loss last year.
The results are for the year to 26th February 2010.
Chairman Nimble Thompson said; “Although the results are extremely pleasing, this level of profit is unlikely to be repeated in the near future and indeed we approach the market with caution, as the recession continues to bite.
“There are two very clear-cut reasons to explain the profit figure. Firstly, some of our most successful longer-term projects came to a financial close, resulting in us being able to take profit on these in accordance with our recognised accounting policies. Secondly, we saw a welcome revaluation in our investment portfolio, which returned to a £6.7m profit compared to a £6.7m loss the previous year – a swing we weren’t expecting quite so soon.
“Despite such rewarding results, which reflect the Group’s earlier efforts, we have not been immune from the downturn, which is evident from the 23 per cent fall in sales. We expect that our sales volume will remain at a similar level for at least the next couple of years and for that reason we have unfortunately had to take the necessary steps to reduce our workforce by seven per cent.
“Regrettably, we also took the decision to close the Group’s final salary pension scheme. Although at the year end the statutory deficit had reduced substantially, the long-term volatility of the scheme presented us with too big a risk to the business and our employees to allow it to continue.”
Cal Bailey, grandson of NG Bailey founder Noel Grimshaw Bailey and a member of the current board, said: “Speaking on behalf of the family, I’d like to say that we are delighted with the results, but continue to operate with an air of caution, in what is a challenging environment.
“I’d also like to take this opportunity to thank our employees for their commitment and dedication to our business. Our strength, longevity in the marketplace and our reputation make us one of the strongest players in the construction industry and we, as a family, wholeheartedly support the direction and future aspirations of the Group.”
In June, NG Bailey announced the appointment of David Hurcomb as its new CEO, who will take up his post in September.