Newspaper article The Journal (Newcastle, England)

Going outside Region to Keep Roof over Our Heads

Newspaper article The Journal (Newcastle, England)

Going outside Region to Keep Roof over Our Heads

Article excerpt

CONSTRUCTION Iain Laing ? 0191 201 6429 ? ONE of the North East's largest construction groups held on to its PS170m revenues last year after winning more business outside the region.

Esh Group said it hopes to maintain its income again this year but is still suffering from public spending cuts and a stagnant housing market.

The County Durham firm brought in more than PS25m from its new businesses in Yorkshire, Cumbria and the North West after seeing its North East business fall by 10% last year.

Chief executive Brian Manning said: "The market is tough and it's not getting any better.

"The only reason we kept up revenues was because of what was coming in from outside the North East. Business in this region is down about 5% this year and we are having to work hard to keep up the sales. I'm not sure if we will do as well this year.

"Although we're ahead of plan for 2012, the lack of visibility of forward workload is a real problem; it's very difficult to project beyond six to eight months."

The company, along with most of the sector, has been hit hard by the UK economic downturn. Its revenues fell to PS134m in 2009 from PS157m the year before.

But it re-entered the black and saw revenues bounce back to PS169m in 2010 as business started to roll in from the Leeds office it opened five years ago and from Kendal two years ago.

"It takes a while to build up contacts and grow the business, but they are working well and we expect PS30m this year," said Manning.

Manning said the business was also being hit by competition from the UK's biggest builders, who are bidding for smaller contracts in the region.

"It is difficult as a medium sized business to compete against nationals in public procurement contests. We are though seeing signs that procurers are becoming more receptive and starting to understand the value of having businesses of Esh Group's technical and financial strength, which commit to local investment and employment, as an alternative to the nationals," he said. …

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