T Clarke reports 41% rise in profit

Building services contractor T Clarke has reported a 42% rise in pre-tax profit in the year to 31 December 2013.

In its full-year results the firm posted a pre-tax profit of £1.7m, up from £1.2m in 2012, with a 12% rise in revenue to £217m in 2013, up from £194m in 2012.

Writing in the results, group chief executive Mark Lawrence said the UK’s “slow recovery” had not led to “any major change in business conditions in the construction industry”.

He said: “Price-driven competition retained its grip across our markets and we continued to see some competitors exit our markets and many competitors continued to make non-economic bids in order to keep going.”

He added: “T Clarke, throughout these challenging times, has worked incredibly hard to find and win opportunities where our combination of advantages allows us to tender for and win work at realistic rates.

“Margins remain under severe pressure; but nonetheless, with our commitment only to tender for work at commercially viable rates, we still managed to increase the value of our order book during the period from £230m to £250m.”

He said the firm hoped for some uplift in the market in 2014 but did not anticipate any “meaningful recovery” until 2015.

However, the firm warned it was still awaiting payments of £6.5m on a major contract where “the principal contractor is continuing to frustrate the account settlement process”.

It said further applications for payment had also been made on the job - which has reached practical completion - in 2014 but these had also not yet been paid.

It said: “The board, having reviewed an independently produced assessment of our account, consider that it is appropriate to continue to recognise the contract on the basis that full recovery of our costs up to and after the year end is probable. 

“At this stage we continue to recognise no profit or loss on this contract.”

T Clarke also said it was appealing damages awarded against one of its “subsidiary companies” for work carried out in 2007.

It said: “Damages were awarded against the company, which were settled by the company’s insurers during the year.

“The award is subject to appeal and the apportionment of costs, which are believed to be substantial, has not yet been determined.

 “Although there is considerable uncertainty with regard to this claim it is considered unlikely that a liability will ultimately fall to the group and no provision has been made in respect of this claim in the financial statements.”