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Sisk returns to profit as revenue drops

John Sisk & Son returned to profit in 2017 after losing £29m over the previous two years.

Pre-tax profit at the company stood at £428,000 for the year to 31 December 2017, compared with a £10.9m pre-tax loss in 2016.

Chief executive Stephen Bowcott said the business had stopped focusing on growth and was targeting productivity and profit.

”The results of this approach are clear across the business where I’m very happy to report that in a very competitive environment, we continued to have no loss-making projects in 2017,” he said.

Finance director Maura Toles added that a restructuring of the business, which included consolidating its southern operations, and the delivery of key projects in 2017 had helped the firm return to profitability after “several challenging years”.

Problem projects for its southern division, which emerged in 2015 and added to losses in 2016, had been the root of John Sisk & Son’s previous losses.

Restructuring and slimming down the business saw turnover tumble from £419.4m in 2015 to £239.3m in 2016.

The contractor’s latest full-year results revealed that revenue fell a further £51m to £188.5m in 2017.

Cash reserves at the firm fell marginally in the year to £11.6m, but significant intercompany loans of around £30m left its balance sheet showing net liabilities of £4.3m.

However, the company does not pay interest on these loans, which are owed to its parent company.

In its financial statement, the business also disclosed that John Sisk group had injected funds to help the UK subsidiary meet its working capital needs.

The Irish parent company reported a €24.7m (£21.7m) pre-tax profit on turnover of €792.2m (£697.1m) for 2017.

John Sisk & Son recently won a £30m contract to carry out transport improvements in Leeds city centre.

Earlier in the year the firm was awarded its second contract on the Circle Square development in Manchester, taking its total order book on the job to £236m.

Its joint venture partner on Highways England’s Collaborative Delivery Framework, Lagan Construction, entered administration in February.

The company decided not to find a replacement partner, choosing to work alone to complete contracts in progress.

Mr Bowcott said: “There is a strong order book for 2019 and well into 2020 and combined with our focus on value creation for our key stakeholders, and sustainable profits, the business looks to the future with renewed confidence.”

 

 

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