North-east builder Bancon Group said yesterday it was “on track” with a three-year plan aimed at overcoming challenging trading conditions across the region.
Reporting “robust” results, the Banchory-based company said its Bancon Homes operation was profitable and well-positioned for future growth, while its Deeside Timberframe business also enjoyed “an excellent trading period”.
But Bancon Construction had a “disappointing” time during the 16 months to March 31, incurring losses on several contracts.
In July, the group secured a £25.2million banking facility with existing lender Santander to support its new business plan.
The independent housebuilder and construction firm grew turnover to £110.2million during the 16-month accounting period, from £81.9million in the previous year.
But hefty one-off costs and poor trading at Bancon Construction saw the parent, which has changed its financial year since 2013/14, plunge into the red, with pre-tax losses of £4.8million, after profits of more than £1million last time.
Exceptional items wiping nearly £2.1million off the balance sheet included £1.26million of restructuring costs, which were mostly for redundancies and senior management changes, amid a major reorganisation within the group.
A bad debt of nearly £200,000 was written off after the customer crashed into administration.
Despite difficult market conditions as the north-east continued to suffer the impact of the oil price slump, Bancon Homes launched three developments and made “significant investments in people and products to position the business for future growth”.
The group said Deeside Timberframe benefited from its wider geographical spread and increased housing activity, while fresh investment went into broadening its reach and market penetration.
Chief executive John Irvine added: “Overall these are robust results, given the considerable investment in reshaping the business in the last 18 months.
“Our homes business continues to perform well in a tough market and our timberframe division is performing strongly across the country, however, the construction business had a disappointing period.”
Mr Irvine said market conditions and the loss-making construction contracts “necessitated a transition for the group to a more efficient and effective structure”.
He added: “The reorganisation implemented changes which the directors are confident have now addressed the historic issues and we currently have a strong order book.
“This was achieved in a short space of time and the current year already shows significant improvements.
“We are well on track and well-positioned to deliver our plan. This confidence was recently underlined by a new £25.5million facility with Santander.”
The group trades mostly within the north-east, although its timber frame business, which manufactures in Stonehaven and Stirling, operates throughout the UK.
Workforce numbers averaged 357 in the latest accounting period, a jump from 320 in 2013/14
