Construction company Stepnell posted an operating loss of £ 5m last year after a so-called “tough” 2020.
The company says the loss through March 2020 was due to issues with legacy contracts but will return to a profit of £ 1m this year on sales of just over £ 100m.
The 154-year-old family business, operating in central and southern England, has a bright future ahead of it, despite suffering an operating loss through March 2020.
Tom Wakeford, joint managing director of Stepnell Ltd, stated that the operating loss of £ 5 million had been offset with support from parent company Stepnell Holdings, resulting in an annual profit.
Wakeford said: “It goes without saying that 2020 was a challenging year for the construction industry. Many in the industry were grappling with the Covid pandemic, and while Stepnell worked continuously on the various shutdowns, he wasn’t immune to the increased labor costs and delays in getting projects off the ground.
“In 2019, we were affected by difficult ground conditions on our largest project, which has proven to be expensive to fix. We have taken a prudent position in our accounts so our team can focus on the financial recovery of the project. In March 2020, old contracts were written off due to Covid-19, which had a profound impact on our customers and our entire industry.
“Therefore, 2019 and 2020 were difficult years for various reasons. The losses in 2019 are now more than two years old and Stepnell looks very different in a very positive way in 2021, with profits expected to surge to around £ 1million. “
Looking ahead, Stepnell has secured orders that will enable it to achieve sales of more than £ 100m in 2020/21, in line with its business plan. A “good order level” was also ensured in all regions for 2021/22.
“Our balance sheet is over £ 15m, which is really strong. Our group has a real estate portfolio in excess of £ 40m, which gives us a strong base. We are in a good position and have invested over £ 10million developing our new business park on Lawford Road, Rugby, which has rented well. We have a good workload for the new fiscal year through March 2022, ”said Wakeford.
He added, “We believe this assessment partly reflects how quickly we have adapted to the new way of working that all of our sites have been operating as a result of COVID19. Our employees have adapted well to new ways of working on site, in our offices and at home.
“We remain cautiously optimistic that we will benefit from our revised business model, which focuses on early engagement and customer and supply chain partnerships, as well as lower risk conditions. Stepnell has a wider range of projects than ever and this enables us to withstand market risks. “
“Strategically, Stepnell views 2019/20 as a year of consolidation where our customer base is carefully scrutinized to be in line with our resources and the capabilities of our supply chain. We’re further refining project selectivity this year, we’re careful and only sign on the right terms and conditions.
Mark Wakeford added, “With the stability of Stepnell and the parent company, we know that despite the difficult climate, we have a robust future. Our underlying performance is improving and our future is bright. “