Consolidated accounts released today by The Metnor Group show a reduction in turnover for 2020 due to the pandemic but record growth is forecast thanks to a strong order pipeline and prestigious new contracts.
Based in Newcastle, The Metnor Group comprises three main trading divisions which operate in the construction, mechanical and electrical services and pressure testing sectors. Each division is a specialist in its own field and this individual expertise combined with the strength of the Group’s resources enables the company to deliver first class products and services to their customers and clients.
Like many other firms in the construction industry, the effect of COVID-19 has been seen across the Group. The impact of site closures – as provisions were made to operate safely and within Government guidelines – together with additional costs as sites were re-mobilised at reduced capacity, has resulted in both decreased turnover and margins. Turnover achieved in 2019 was £92 million whilst it was £68 million in 2020 and gross profit has been squeezed from 8.5% to 5.7%.
Chris Cant, CEO of Metnor Group said:
“2020 was undoubtedly a very challenging year for the Metnor Group. The pandemic threw a number of challenges at us, but we have managed to come out of it stronger than we went in.
I’m really proud that we’ve managed to keep our staff safe while delivering such prestigious projects to an exceptionally high standard of quality. Going forward, we’re looking to recruit a number of roles across all of our divisions to help us achieve our ambitious growth plans on some really exciting projects.
Over the past two years, we’ve made significant changes to the business, bringing in a new team with a real commercial and collaborative focus. These changes are now bearing fruit. While it’s been a challenging time for all businesses, it’s important we continue to plan for tomorrow and invest in our people. Recent senior director promotions are testament to this and ensuring we develop future leadership signals the confidence and commitment we have in the market
We’ve got a strong order book ahead and although 2020 was a difficult year for us, we have more targeted and profitable work secured in the pipeline as we head into the second half of 2021 and beyond and I’m optimistic about the year ahead.
We’re forecasting record turnover next year and then again the year after and it’s thanks to our fantastic team and supportive clients and suppliers that we’re tracking such ambitious growth.”
During these unprecedented times, the Group has placed increased focus on cash management and the consolidated cash balance has been increased by £5.3 million to the year position of £7.8 million.
The impact of delayed projects together with a significant number of prestigious contract wins and a reduced cost base means the Group is well placed for strong performance throughout 2021 and beyond with record growth forecast for all divisions.
As a main contractor Metnor Construction has had to lead on the implementation of COVID safe working across all its sites. With the resultant delays and increased costs, turnover in 2020 was £48.3 million compared to £62.8 million in the previous year.
The focus of the division continues to be on those markets where the Group has considerable experience, namely:
- Five leisure centres from Hampshire through to North Norfolk
- Data halls in Welwyn Garden City
- Care homes in Cheshire and Bromley
- A hotel in Sunderland (The Seaburn Inn)
In addition to these defined markets the division commenced work in 2020 on two Private Rented Sector (PRS) schemes in Sheffield and Birmingham. This is a sector which is particularly vibrant and a third PRS scheme – in Rugby – has started in 2021 and further projects are in the pipeline.
With work continuing on a number of the projects named above, the division has also already secured three more hotels in Northern England as well as a data hall in Wembley and prospects through 2021 and beyond are extremely positive.
Norstead, the mechanical and electrical contracting business, also suffered a reduction in turnover to £17.5 million from 23.5 million in 2019. Despite suffering delays to jobs and additional costs the division has managed to reduce its operating loss and is set to return to profit in 2021. With gross margins maintained on most contracts.
The division operates across all segments of the M&E market with a strong emphasis on the healthcare, leisure, PRS and student accommodation sectors. Changes in senior management have facilitated closer working relationships with Metnor Construction, and Norstead is providing the M&E services to several of the projects listed above.
The activities of Metnor (Great Yarmouth) Limited, the company’s specialist pressure testing business, are totally reliant on the oil price and associated confidence in the oil and gas sector. The results of 2020 were affected by the lack of air travel during the pandemic which led to a considerable reduction in the oil price. However, the division is well financed and able to manage costs to enable it to continue to trade profitably, albeit from a reduced level.