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Fresh focus at Simons rewarded as profits soar

FINANCE - Contractor's pre-tax profits hit £4.5 million as turnover rises to £250 million

TURNOVER has revived at Simons as a change in strategy and embracing partnering paid off for the Lincoln-based contractor and developer.

Turnover had slipped £48 million to £180 million in 2004 but surged up to £250 million in the year to March 2005.

Chief executive Paul Hodgkinson said: 'In the past 10 years we've taken the partnering ethos and really driven it into our business.' Mr Hodgkinson, who, along with his brother Philip, owns 90 per cent of the shares in Simons, has changed the strategy of the business in recent years.

Around 90 per cent of Simons' workload comes from a handful of 20 key blue chip clients such as Asda, Debenhams, B&Q, property firm Gazeley and developer Capital & Regional.

This has paid off and profits also boomed as better-organised projects provide better margins.

Pre-tax profits at the firm had slumped to just £770,000 last year from £1.3 million in 2003 but then boomed up to £4.5 million in 2005.

Mr Hodgkinson said: 'We have seen a huge improvement in our productivity.

Every time you double the volume you should be able to get a 10 per cent saving.

That's a manufacturing statistic but it does apply to construction too.

'A few years ago we were building a McDonald's drive-in at a cost of £1 million and it took 26 weeks.

'Now we're building a drive-in in three weeks and it's costing £350,000.' The majority of the firm's workload comes from the private sector, which provided all but 7.5 per cent of the latest turnover.

Construction provided about £220 million of the turnover in 2005, with development work contributing over £30 million and the remaining workload coming from consultancy.