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Barhale profits down after telecoms no-show

FINANCE Contractor's framework deal with BT produces less work than expected in 2004

PROFITS took a tumble at Barhale last year after a civils framework with telecoms giant BT did not provide the utilities contractor with as much work as it expected.

In the year to September 2004 Barhale's pre-tax profits slipped to £543,000 from £730,000 but finance director Geoff Pearson expects an improvement this year.

He said: 'Volumes in the latest accounts were down by around 20 per cent.That's quite a lot when, like us, you've got large fixed costs such as a big, directly employed workforce.

'The volumes picked up again after January, the contract was renewed in July and the work has picked up even more since then.'

Barhale employs nearly 1,200 people and had a £30.9 million wage bill in the latest accounts - up £2 million on the preceding 12 months.

This increase took operating profits down £187,000 to £543,000 and, with turnover up £12.5 million to £119.8 million, margins dipped from 0.7 per cent to 0.5 per cent.

Around 90 per cent of Barhale's workload is in framework deals and the firm bagged work for three water companies - Anglian, Severn Trent and Thames - in the bidding for the new AMP 4 programme.

As turnover has surged from £22.4 million in 2000, Barhale, which is 25 years old in 2005, is not looking for a huge increase in workload this year.

Mr Pearson added: 'We're expecting turnover to plateau out as we're coming to an end of AMP 3 and AMP 4 has yet to ramp up.The margins in utilities are tight and competitive but we are anticipating profits will improve this year, depending on volumes.'

During the year Barhale bought out of administration failed welding contractor Comtake, which turned over about £3 million, and opened an office in Ireland.