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Scaffolding firms suffer in recession

Latest accounts for scaffolding contractors show the sector suffered a significant drop in turnover during the recession.

The seven largest UK scaffolding contractors to have filed accounts in 2010 show a combined turnover of £296.8 million for financial years ending in 2009.

This is down by 12.5 per cent from a combined figure of £339.1m for years ending in 2008.

The two most recent firms to file results - Brogan Group and Tone Scaffolding - saw drops of 16 and 19 per cent respectively.

The National Access & Scaffolding Confederation said the scaffolding industry was usually considered to be a front-end indicator for how badly the recession would affect main contractors.

The NASC added that its members had responded to the recession by cutting their operating costs as far as possible to protect margins.

Croydon-based Tone’s figures for the year to 30 November 2009 show employee numbers were cut from 145 to 121. The firm’s staff costs were cut by 20 per cent to £4.8m.

Meanwhile, staff numbers at London-based Brogan Group were reduced to 193 from 229, while the wage bill was cut from £9m to £7.9m.

Tone just scraped into the black, making a pre-tax profit of £38,000, compared with £405,000 the previous year. Turnover was down to £10m.

Tone’s directors said the firm had managed its cost base to enable it to reinforce its position in the sector.

Finance director Madhu Ahluwalia said: “The company encountered a difficult year and did not perform as the directors had originally expected.

“Turnover was lower than for 2008 as clients cancelled or postponed the sort of major construction projects with which the company is typically involved.”

Tone’s directors added that the economic conditions since the year end had remained challenging and variable but that the firm had progressed and the directors were satisfied about prospects for the future.

Brogan Group’s figures for the year to 31 December 2009 show turnover of £13.3m, with pre-tax profit down to £96,026 from £1.4m the prior year.

While UK turnover at the firm actually increased marginally from £9.6m to £10.8m, the firm’s overseas interests in Dubai and the Republic of Ireland were hit hard with turnover falling 59 per cent to £2.5m.