PROPENCITY has more than halved its debts since the management bought the Yorkshire-based building group from Peterhouse at the start of last year.
Propencity's management borrowed £18 million from the Bank of Scotland to buy the business but reduced this debt to just £7.5 million in the first 18 months of trading and still has £11 million of cash in the bank.
Propencity chief executive Phil Brierley said: 'The cash position has been the success of the year.We made the effort to be realistic on some old recoverable contracts so we got the money in.We also sold some old development sites that came as part of the deal.We want to do development but these sites were not right for us.'
In its first year of trading, Propencity, which comprises Jackson Building, Totty and fit-out firm Dean & Bowes, made a £1.3 million pre-tax profit on a turnover of £206.8 million.With a turnover of £100 million, Totty produced the bulk of the income. Jackson brought in £70 million-worth of work and the remainder came from Dean & Bowes.
Turnover is expected to remain at similar levels this year.
Propencity made an operating profit of £4 million, which translates into a margin of 1.9 per cent.
Mr Brierley added: 'We are not intending to grow the turnover a lot.
'If we can get a sensible margin of 3 per cent from contracting in a few years, then we will be happy and we will then bring that up with development work.
'But we are not going to do that over the next couple of years as we have still got debts to pay to the bank and we want to clear that before we start to invest in the development side.'
Mr Brierley is remodelling the business and does not want the average job size to be larger than between £5 million and £7 million, with only a handful of larger projects exceeding this value.
In the last set of results, while part of Peterhouse, Propencity made a £400,000 pre-tax profit on £53.2 million turnover.