Osborne has reported “record” pre-tax profit of £12.6m as turnover dipped amid Brexit-driven delays and a major rail job winding down.
Sale of a development property that generated a “higher-than-expected” return saw pre-tax profit increase almost four-fold for the year to 31 March 2018 compared with the £3.6m reported in the previous 12 months.
Chief executive Andy Steele (pictured) said: “The excellent results were very substantially due to profits generated by our specialist development business, but all our contracting businesses have continued to make a contribution as well.”
All construction operations were profitable for the financial year with the exception of Osborne Homes, which started work on its first construction contract during the year.
Turnover for the group fell to £318.3m from £348.1m, with the group stating that several projects were delayed due to Brexit uncertainty and that a major rail contract was nearing completion.
This left Osborne Group with a pre-tax margin of 4 per cent for the year.
Cash reserves for the group increased from £24.6m to £31.9m, which allowed it to pay off just over £4m in outstanding intercompany loans, buy out several minority shareholders, and reorganise its operations into three main businesses.
The construction business that traded as Geoffrey Osborne will now operate as Osborne Construction.
Its infrastructure operations are currently being hived off as Osborne Infrastructure, a process that will be completed by the end of March 2019.
Osborne’s offsite construction business Innovare Systems, which was previously a subsidiary of the construction division Geoffrey Osborne, will now come directly under the Osborne Group parent company.
The firm said the restructuring aimed to give the businesses “greater clarity” in its trading while reducing the risk to the overall group.
Costs associated with the restructuring, along with higher bonuses for staff, saw the group make an operating loss of £494,000, down from a £3.63m operating profit in the previous year.
However, Osborne said a number of delayed projects started on site towards the end of its financial year, boosting its order book from £249.2m at the end of the previous year to £330.6m as of 31 March 2018.
Profit for the current year was expected to reduce to “more historic levels”, according to chairman Andrew Osborne.
The group’s pension deficit fell from £2m to £1.5m over the year, with Osborne stating that extra payments to speed up the deficit recovery were planned.