An upturn in the property and construction markets enabled a North East firm to overturn losses and make a healthy profit last year.
Killingworth-based Metnor Group saw revenues rise almost 32% to £49.6 million in the twelve months to 31st December 2013, while pre-tax profits totalled £863,000 - a far cry from the £872,000 loss posted in 2012.
The upturn in the company’s fortunes was attributed to a strong performance by its construction and property divisions, which were boosted by lucrative contract wins in the care home and student accommodation sectors.
An 80-bed care home in Poole was let to a care operator on a 30-year lease and a 275-bed student accommodation block that was opened in Newcastle last September is now fully let. Activity has continued into 2014, with the company currently working on another care home scheme, a hotel development and a student accommodation project.
Metnor’s mechanical and electrical contracting division also contributed to the company’s growth in 2013, more than doubling turnover from £11.8 million to £26.1 million.
The company said it had a healthy order book for 2014, with a £20 million-plus pipeline of work for the contracting division alone.
In a statement which accompanies the annual results, Metnor said: “Whilst the construction sector is looking towards recovery it is still tentative and we will continue to concentrate on what we do best. We believe we have a strong base across the group from which to grow the business as and when the economy improves further.
The company sited several potential risks to the business going forward, including future economic turbulence that could de-rail the construction and property market recovery.
It said: “Market conditions continue to be the single biggest risk factor across the group. The property sector was hit hardest at the start of the recession and has continued to struggle over this elongated economic recovery. The construction sector is reported in the various economic bulletins as improving but activity levels are still patchy and geographically unbalanced.
“Customers and potential customers of large construction projects and property developments continue to find it difficult to secure the funding needed to complete projects and are still deferring projects which would otherwise be commercially viable.”
The Metnor Group has four divisions which focus on property development and investment, general building and construction, mechanical and electrical contracting services, and the sale and rental of pressure testing equipment for the oil and gas industry.
It struggled in the years following the financial crash of 2008 as some of its larger customers scaled back investment in the face of market uncertainty and falling confidence. However, the last two years have seen a rise in property and construction-related activity, particularly in the number of new-build projects coming on stream.
Earlier this year Metnor secured a £20m funding package to kick-start work on the Portland Green Student Village, a major student development on a former brownfield site near Portland Road, Shieldfield.