Building services group Northern Bear PLC says it is poised to grow further, both organically and through bolt-on acquisitions, after a year of strong trading.
In 2012/13, the Newcastle’s business’ sales were hit by the wettest summer in England and Wales for a century, with turnover dropping 3.6% to £35.1m. The company likewise reported a drop in profit before tax, from £1m to £682,000, having been hit by a “significant loss” on a care home project run by a subsidiary.
However, in a trading update for the year ended March 31, 2014, Northern Bear - which operates 12 firms in roofing, building services and materials handling activities - said it had exceeded expectations in trading.
Performance in the second half - often adversely affected by the weather - had been particularly strong and the group, which employs over 300 people, was well set for the future.
“Current order book levels are very encouraging and point to the likelihood that the upward trend in performance should continue during the rest of the current financial year,” the update said.
“The strong pipeline of orders, coupled with a brighter outlook for both the national and local construction sectors bode well for our specialist building and support services business.”
Historically, despite challenging traditions, Northern Bear has consistently managed to reduce its debt - an accomplishment it puts down to tight control of costs and maximising the performance of its larger divisions.
The update said: “Given the apparent upturn in the sector and a continuing, strong trading performance by the company on an ongoing basis, a larger debt reduction should be possible on a annual basis in future.
“In view of the solid performance of the business, the board is pleased to announce that it is planning, subject to business opportunities which may present themselves or any unforeseen circumstances, to reintroduce the payment of a modest final dividend in respect of the year ended March 31, 2014.”
Executive chairman of Northern Bear, Steve Roberts, said: “The last year has seen a marked improvement in the performance of our business, which I believe is a response to the hard work of our staff and the careful prioritisation of our resources during a period of bleak economic conditions.
“The group is now well placed to take advantage of opportunities as and when they arise both through organic growth and bolt-on acquisitions.
“With brighter macro-economic and local economic conditions, I hope to be able to announce further progress in due course.”