North East construction group MGL has seen profits rise despite a drop in turnover, in part thanks to a new subsidiary.
In accounts for the year ending March 31 2020, the Durham-based business, which also has sites in Newcastle and North Yorkshire, saw turnover fall by £5m to £65.3m, but operating profits increased slightly to £3.4m.
The company said that the principal reason for the fall in turnover was the completion of two unusually large contracts towards the end of the financial year.
It said that a new subsidiary providing specialist cable support services to the offshore wind farm industry had helped improve profitability, though it added that profit levels were likely to fall in the current year due to the Covid-19 pandemic.
Chief executive Gary Smith said: “With respect to results in the current financial year, despite a difficult start to the period in April and May when losses were incurred, the company has recovered and has remained profitable in its first six months of this financial year.
“Such an achievement would not have been possible without the commitment, loyalty and resolve of our dedicated employees across the whole group.”
MGL said that it had used the Government’s furlough scheme in the early weeks of the pandemic when sites were closed down under Government guidelines.
It added that plans to move to a new head office - planned because of a lack of space in the current premises - had been put on hold after new working practices in the pandemic had led the company to question the need for it.
But the company has started work on a new workshop and garage facility, a £2m investment that which result in the creation of at least six new jobs and allowed the company to expand its fleet of plant and vehicles. It has also taken an option on a site on the outskirts of York to develop an asphalt site.
Mr Smith added: “Looking ahead to 2021 the group feels it is well placed to have a successful year with a strong order book across all divisions and strong liquidity to make it resilient to any obstacles which may occur during these challenging times.”
