The lingering effect of historical fixed-price contracts hit Clegg Holdings’ bottom line last year.
The contractor’s annual accounts for the 2023 calendar year, filed on Monday (23 September) on the Companies House website, showed that pre-tax profit fell by 61 per cent to £520,200, down from £1.4m in 2022.
Revenue dropped by 3.7 per cent from £165.6m to £159.3m in the year to 31 December 2023.
As a result, the firm’s margin narrowed from 0.8 per cent in 2022 to 0.3 per cent the following year.
In the group accounts, company directors said “strong trading” for Clegg Construction last year was “held back by the completion of remaining fixed-price contracts secured in earlier years”.
These contracts, which were entered into in 2020, “had been affected by external factors that exerted unavoidable pressures on the cost of work and supply chain resources”, they added.
Problem projects included student accommodation, care and residential projects that had been affected by market pressures “including subcontractor failures”, the directors said.
Clegg Holdings entered the CN100 2024 ranking of top contractors in 97th place. The contractor operates predominantly in East Anglia, the Midlands and Yorkshire.
It comprises two divisions: Clegg Construction Ltd and Clegg Food Projects Ltd, which specialises in building facilities for food manufacturers.
The group ended 2023 with £3.8m of cash at hand, down from £6.8m the year before. Its short-term bank loans remained the same at £159,300, although longer-term debt reduced from £1.2m to £1m.
Clegg Holdings paid no dividends. It employed a monthly average of 120 staff last year and its wage bill stood at £7.8m.
Looking ahead, the firm said that 95 per cent of the 2024 forecast group revenue had been secured. A focus on “selective supply-chain procurement” and winning repeat business has generated a pipeline of “well-performing” contracts lasting until 2025.
These jobs are in the defence, education, residential, care, leisure and commercial sectors with values from £5m to £35m, the group accounts stated.
They added that improved trading conditions for Clegg Construction had allowed “new work to be secured and delivered at increased profitability into 2024 and 2025”.
In January this year, after the period covered by the latest accounts, Clegg Construction’s managing director Simon Blackburn announced his retirement after 20 years in the post.
He was replaced by Michael Sims, who stepped up from his previous role as commercial director.
Ongoing projects for Clegg Construction include a 402-bed purpose-built student accommodation scheme (pictured) in Leeds worth £35m, for client PPG Leeds.
