Inflation bites into Robertson margin despite turnover hike

Robertson Group has reported a 9 per cent increase in turnover, to £670.9m.

Despite the higher revenue, pre-tax profit at the family-run company fell by 20 per cent to £16.3m in the year to 30 June 2023, according to financial accounts published this week.

This was partly due to a £58m increase in the cost of sales, with the group’s margin narrowing to 2.4 per cent compared with 3.3 per cent in 2021/22.

Robertson Group was the 30th-largest UK contractor by turnover in the CN100 2023 table.

The group ended the financial year with net cash reserves of £58.1m, down slightly on the previous year’s £61m. It took on a higher level of short-term loan debt to be repaid within 12 months (£110.7m versus £73m in 2021/22), but was still able to pay out an interim dividend of £18.8m compared with £5m the year before.

In the strategic report accompany the latest set of accounts, group chairman Sir William Robertson described “unprecedented levels of inflation across materials, labour and energy”.

He added: “Interest rate rises have also squeezed available budgets across both the public and private sectors. Inflation costs across many aspects of the economy have forced both the public and private sectors to reevaluate projects, with a number delayed or cancelled as a result of pressure on both revenue and capital budgets.”

Robertson said these issues had continued into the current financial year but “the group has continued to ensure that it can demonstrate value for money to our client base”.

He added: “One of our key objectives continues to be cost certainty for us and for our clients, despite having to manage the exceptionally high levels of inflation and supply-chain volatility that we are currently experiencing. The front-end, preconstruction phase is critical to that success.”

The group stated that its main contracting business, Robertson Construction Group (RCG), saw its turnover rise by £30m to reach £490m. This was achieved with a “clearly defined regional business model, a continued focus on project selection and strong local supply-chain relationships”.

RCG operated more than 100 construction sites during the year, with a strong presence in the North of England and Scotland.

In the public sector, the group accounts highlighted RCG’s role in the Clear Futures partnership as a strategic delivery partner for Eastbourne and Lewes councils in Sussex, plus Stockport and Bolton councils in the North West.

Other ongoing projects include Robertson’s first job in North Wales, where it is building a multimillion-pound school campus (pictured) in Mynydd, Flintshire, for completion this November. Two months ago, Robertson also won a place on the £1bn North West Construction Hub’s Medium Value Construction Framework, which runs until 2026.

Headcount at Robertson Group increased from 2,551 in 2021/22 to 2,705 the following year but Sir William Robertson recognised that attracting young people into construction and retaining existing staff “is a challenge for all of us”.

Looking ahead, he said that the group was well-positioned to make 2024 “another year of sustained, profitable trading activity”, as it was in a “robust position to manage any economic pressures and support future growth and new investment”.

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