Profits have increased by 80% in the latest financial results posted by North of England contractor, Esh Group.
Operating profits jumped to £5.2 million for 2024, up from £2.9 million in the previous year, and the privately-owned firm more than doubled its cash balance to £36 million by the year end – the highest ever on record.
Driven by a strategically designed business model which targets sectors that are underpinned by strong and sustainable demand drivers, Esh Group has over £2 billion worth of visibility in its forward order book, which gives rise to long-term confidence in future revenues for the business, according to Chief Executive Andy Radcliffe.
He said: “We’ve made real progress as a business over the past few years as we fundamentally repositioned our group to target the most attractive segments of the market, and we’re in a really good place right now – which, many would argue is at odds with the broader industry narrative that suggests challenging trading conditions are persisting.
“During the first half of 2024, we closed out the majority of contracts that had been impacted by the aggressive rise in cost inflation over the previous two years, and in the second half of the year, every division of the group performed exceptionally well. With liquidity at an all-time-high, expanding gross profit margins, and a business plan delivering as intended, our group is well-positioned for continued success, with 2025 set to show an even greater improvement in profitability.
“That being said, we are certainly not being complacent – we must continue the relentless execution of our group strategy – a strategy that saw us through the challenging times during and after the pandemic. This, coupled with our prudent approach to working capital management, sensible work winning strategies, and quality and safe delivery, will provide a solid foundation for a prosperous future.”
The Group continues to benefit from an undrawn £6 million credit facility and made a capital investment of £2 million during the year to purchase new, more sustainable plant and equipment to support its strategic growth and carbon reduction plans.
Turnover was up by £4 million to £265 million, with delivery improvements in both its contracting and development divisions driving the increase in gross profit margins to 8%.
Esh maintains a finely balanced portfolio of work covering local authorities, utility and environmental companies, registered affordable housing providers, as well as the private housing sector, which enables the firm to ‘even out the peaks and troughs of the construction industry’s demand profile over the economic cycle,’ explained Radcliffe.
He added: “Our strategy of focusing on resilient market segments has served us well in recent years, culminating in a headline order book exceeding £2 billion. Building on this momentum, we are actively pursuing additional opportunities within our core markets and anticipate continued growth in both turnover and margins into the future.”
The 800-strong contractor was recently appointed as sole delivery partner for Northumbrian Water Group’s (NWG) wastewater networks planned and reactive repairs and maintenance framework, further strengthening its forward order book by £160 million. The new contract, combined with existing frameworks for the AMP 8 programme, has primed Esh for significant growth in the wastewater and environmental sector.
Flagship schemes such as the Tyne Bridge Restoration, Stockton Waterfront Urban Park, and the 750-home Seaham Garden Village highlight Esh’s trusted capabilities in delivering complex major investment projects.
Meanwhile the redevelopment of Eston Precinct, an education hub at Newton Aycliffe’s Greenfield Academy, and the new Bishop Auckland Bus Station, will see Esh provide improved facilities for local communities alongside delivering one of the most comprehensive social value offerings within the industry.
Responding to the rising demand for new and improved affordable housing, Esh has significantly expanded its delivery across the North East and Tees Valley through both competitive tenders and its land-led route to market. Being chosen as a key delivery partner for Gentoo Group’s new £170 million ‘Gentogether’ programme has provided a 10-year pipeline of work for Esh’s refurbishment delivery teams, and, with a bustling pipeline of projects underway or set to begin in all corners of the region, Esh is on track for a 45% uplift in new build homes delivered by the end of 2025.
This year, Esh Group was named by Deloitte as one of the UK’s Best Managed Companies for 2025 which Radcliffe attributed to the skill and dedication of the vast array of talented people in the business.
He concluded: “Our long-term vision is clear and we are strongly positioned to navigate the ups, downs and challenges that all businesses face, particularly in the construction industry. I’m genuinely proud of the dedication shown by everyone in the business – their incredible hard work, technical brilliance and laser focus on delighting our clients has helped shape the strong position we are in today. And, as ever, we are enormously grateful to our valued clients and our loyal supply chains for their continued support.”
www.eshgroup.co.uk
