Sweett bounces back into profit after difficult year

Consultant Sweett Group has hailed a “significantly improved” performance after rebounding from last year’s loss to post a £1.8m pre-tax profit.

In its preliminary results for the year to 31 March 2013, the firm also posted growth in revenue of 11% to £80.6m, up from £72.8m the previous year.

The positive results come after a tough 12 months for Sweett, which successfully fended off an attempted management coup by former chairman Francis Ives in May - costing the firm £170,000. Last month Sweett launched an investigation into historic bribery allegations made in the Wall Street Journal, while last year it posted a pre-tax loss of £1m, breached its banking covenants, and made losses on foreign exchange instruments.

In its latest financial year, all three of the firm’s international divisions grew (see box), while operating profit improved significantly, up to £2.3m from a £162,000 loss the previous year.

Sweett said its operating profit would have been higher still at £4.3m, but was brought down by £1.5m of exceptional administrative costs, including £812,000 of restructuring costs, £117,000 for closure of operations in France and £170,000 to fend off Ives’ attempted management coup.

Pre-tax profit held up better than the previous year partly due to a reduction in finance costs, down to £565,000 from £859,000 the previous year.

Sweett identified Asia Pacific as its main growth market. The firm said one of its key focuses in the region was to diversify away from cost management and dispute resolution into project management, and the firm will recruit a head of project management in the region to lead this.

The firm said its European business benefited from increased activity in the commercial, retail and infrastructure sectors.

Major wins included the £1bn Westfield and Hammerson shopping mall in Croydon, south London – where the firm is acting as cost consultant on the design stage – and the roll-out of Primark stores in France.

Sweett confirmed all banking covenants were met during the latest full financial year, with the firm granted a waiver on cash flow cover and gearing covenants by lender Bank of Scotland last year.

The firm’s order book stood at £100m at 31 May.

Chief executive Dean Webster said 2013 was a year of “significantly improved financial performance”.

“We have a lean and diverse business which is well placed to benefit from some of the green shoots we are seeing in the construction industry in some of our markets.”Sweett at a glance