Discontinued businesses rack up 拢8m in losses
Careys said the impact of the covid-19 pandemic and delays in awarding contracts sent the firm鈥檚 income tumbling to below 拢350m last year in its latest accounts filed at Companies House.
The Wembley-based civils and concrete specialist said income in the 12 months to September was 拢344m 鈥� down from the 拢749m it posted in the 18 months to September 2020. Its pro rata turnover for 2020 was 拢499m, down from the 拢575m it recorded in 2019.
The firm had already pulled the plug on three non-core businesses, including demolition firm TE Scudder and Carey New Homes, but said its discontinued operations racked up losses of 拢7.9m on a combined turnover of 拢23m.
Pre-tax profit for the year was 拢9m but losses from the three discontinued businesses meant the figure slumped to just over 拢1m from 拢15m last time.
It added that the firm鈥檚 Irish business, which is also being wound down, is expected to complete its final remaining contract in the second quarter of this year.
Careys, whose business also includes dry lining firm BDL, which worked on Mace鈥檚 Paddington Square scheme in west London, added that it claimed a further 拢600,000 from the government鈥檚 Coronavirus Job Retention Scheme initiative on top of the 拢9.1m it was paid last time. It said the cost of paying furloughed staff during the period was 拢700,000.
It said it had deferred a 拢2.1m VAT payment in line with HMRC guidance with the sum due to be paid by the end of next month. It has already repaid 拢3.1m of the original deferred amount.
The firm said: 鈥淭he impacts of Brexit and the continuing effects of the covid-19 pandemic have maintained uncertainty ad volatility within the UK construction sector and wider economy which has resulted in a highly competitive tendering environment, extreme cost pressures and delays in new contract awards. This has in tune led to lower revenues and leaner margins than would have otherwise be expected. The outlook for the next 12 months is similarly uncertain and challenging with material price and labour rate inflation set to remain at unusually high levels.鈥�
The group鈥檚 order book stood at 拢667m at the end of September, while it ended the period with net debt of 拢2.4m, compared with a net cash of 拢3.4m in 2020. The number of employees at the group was 994 last year compared to 1,462 in 2020.
The firm also said it had increased to 拢9m, from 拢3m last time, a provision on 鈥渁 regulatory matter relating to historical breaches due to the behaviour of a former management team鈥�.
It added: 鈥淭he directors are fully cooperating with the relevant parties in relation to these investigations. The potential liability ranges from 拢6m to 拢16m. Legal advice indicates that this upper limit is likely to reduce to around 拢11m subject to the compliance of certain formalities.鈥�
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