Specialist building services group Northern Bear plc managed to boost profits in the six months ended September 30, despite ongoing challenges within the construction industry.
Interim results for the period show that, although group revenue was down slightly at Newcastle-headquartered business compared to 2012, margin improvements across the bulk of its 12 companies meant gross profit rose to £4.2m, compared to £4m last year.
Operating profit also grew from £0.8m to £0.9, despite an increase in administrative costs, while final profit was £560,000, compared to £468,000 for the same period last year.
Non-executive chairman of Northern Bear Howard Gold said: “The group has continued to perform well, despite difficult trading conditions. I am confident that the group’s new management structure is already delivering benefits and will continue to do so going forward.
“Our focus remains on improving earnings and reducing the group’s level of bank debt through operating cash flow generation. I would like to thank all our directors and employees for their contribution during the period.”
The Northern Bear family of businesses, which employs more than 300 people, provides specialist building services to local authorities, housing associations, NHS trusts, universities, construction companies and national house builders throughout the North of England.
The group, which floated on AIM in December 2006, runs a wide range of services, from asbestos management to solar PV installations. Each company operates as an autonomous business, with Northern Bear providing the additional security of group strategic management and financial consolidation. The majority of the firms have been trading for more than 20 years.
According to the latest results, the board’s priority in recent years have been to use operating cash flow to reduce bank debt, currently at £6.6m.
The group is also monitoring opportunities for the use of funds generated, including capital investment, bolt-on acquisitions and capital repurchases.
Despite improved trading performance, and strong order books all round, however, the board thinks it “prudent” not to declare an interim dividend for the period.
Gold added: “We are able to sustain a loyal and dedicated workforce with the skills required to meet the demands of the modern day construction industry.
“The quality and experience of our people and the key customer relationships that they maintain remain fundamental to the group’s success.”