Profit at groundworks firm M&J Evans slipped last year amid a slowdown in housebuilding, according to its latest accounts.
The Walsall-based firm, ranked 49th in the CN100 2023 table of top contractors, posted a pre-tax profit of £2.2m for the 2023 calendar year from turnover of £334.3m.
Both figures represented a steep decrease from revenue of £405.8m and pre-tax profit of £23.4m the year before.
Chief executive Chris Southgate described a “challenging year” marked by “a considerable reduction” in demand for residential groundworks and increased borrowing costs as interest rates rose.
He added that the resulting “operational inefficiencies”, combined with unrecovered “significant” inflation-related costs from clients, caused the firm’s margin to shrink from 5.8 to just 0.7 per cent.
M&J Evans remained free of bank loan debt and had cash at hand of £18.2m at the end of 2023, down slightly from the previous year’s £21.2m. No dividends were paid out.
Headcount increased from a monthly average of 318 staff to 423, meaning that the firm’s annual wage bill grew from £22.3m to £26.2m.
Despite the problems his firm faced last year, Southgate remained optimistic for the future, citing plans for growth and a new Eastern Counties region that was set up in 2023.
The business “remains committed to its plan for growth and efficiency”, he said, adding that the Eastern Counties region will cover an approximate 50-mile radius from a new office in Huntingdon.
“Looking forward, the group remains positive following recent inflation and mortgage rates reductions and together with the continued severe housing shortage seen across the UK, it anticipates improvements in house sales and build rates during 2024 with a more sustained recovery in 2025,” Southgate added.
