GB Group chief executive Martin Smout has insisted that the firm has “successfully dealt with the downturn” as it revealed healthy results.
The group’s pre-tax profit, before exceptional items, for the year ended 30 June 2009 totalled £2.14 million, up from £1.16m the previous year.
Its increased focus on developing relationships with existing clients resulted in a rise in repeat business to 69 per cent from 60 per cent the previous year.
Mr Smout – also chairman of the group – said: “The board has successfully dealt with the downturn.
“As a privately owned group which is debt free and strongly cash positive, we are well positioned as the economy improves to maintain secure, profitable long-term growth.”
He said action was taken at the beginning of the financial year to prepare the business for the contraction of the industry.
As a result, staff numbers have reduced from 446 to 316 over the course of the year, and the business has been consolidated into two operational units, North and South.
However, the reorganisation resulted in exceptional costs of about £1m, meaning the firm actually made a similar amount of pre-tax profit as in the previous year.
The recession also hit the firm’s turnover, which fell by 5.8 per cent to £195.2m.
But Mr Smout said: “The board identified this downturn early and has taken action over the last 18 months to significantly reduce the cost base of the business.
“The cost base is now at a level appropriate with current and anticipated activity levels, without impacting on our delivery or work-winning capabilities.”
The restructuring has led to greater efficiencies and significantly lower overheads, which bosses expect to result in an annualised saving of £4m.
In addition, the privately owned firm has £17.4m cash in the bank, although this is a 15 per cent reduction on the previous year’s £20.6m.
Mr Smout said the cash put the firm in a strong position to operate over the coming years and to look at potential acquisitions, despite economic conditions that continue to be challenging.
He said: “Options are created by having the cash and we can invest where appropriate. It allows us to drive the business forward in a sensible manner.
“Conditions in the sector are likely to remain challenging with current indications that recovery will be within the next two years.”
Mr Smout said GB would continue to focus on building long-term relationships and increasing the number of frameworks it was on.
Over the past year, he said GB Building Solutions had achieved a strong performance on its education framework for Northumberland County Council, and for Manchester City Council under its Housing Improvement Framework.
Among other significant projects, GB is constructing its fifth scheme for St Andrews Hospital in Northampton, valued at £46m.
The group has completed £65m-worth of care homes in the PFI sector for Avantage and its client Cheshire County Council.
GB is also expanding further into development work through its subsidiary GB Development Solutions.
Recent success has included having plans approved for a care home site in Congleton, Cheshire, and its subsequent sale to an operator.
Planning has also been secured and construction started on a new 11,000-seater stadium for Chesterfield Football Club.
GB’s joint venture company, Oxford GB – the final part of the group – also continues to operate solidly.