East Yorkshire off-site construction specialist Premier Modular has recorded a further increase in sales despite huge Covid-19 testing contracts coming to a close.
The Brandesburton business recorded a 3.8 per cent uplift in turnover, from £108.4 million to £112.5 million, in the year to June 2022. Despite challenging conditions, operating profits were up from £14.1 million to £16.4 million too.
A major spike in rental activity during the pandemic, as well as strong growth in other areas, had seen the company pass the £100 million milestone way quicker than chief executive David Harris had anticipated when taking the top role back in the summer of 2020. Now it enters the year in which he hoped to achieve it with a record project pipeline, with further investment pumped in following a recent equity injection by MML Capital Partners.
In his strategic report accompanying the results, Mr Harris said: “Premier Modular’s order pipeline for both permanent and rental contracts is at unprecedented levels. Exposure to and successful delivery of projects into new sectors and at greater project size has continued to raise the profile and reputation of the business. The company is now seen as having the capability and capacity to deliver schemes of all sizes underpinning our growth plans for the business.
“Premier modular is performing ahead of forecast and is expecting to perform in line with the years ended 2021 and 2022, despite the ending of the contracts to provide Covid-19 testing centres which contributed sizable revenue and profit into the two previous years.”
A Dutch subsidiary has been established to facilitate the winning of work on the continent, having already served contracts there through a UK customer. “This will increase our presence and provide an opportunity to expand into foreign markets,” Mr Harris said.
Reflecting on the buy-in, completed in August, following on from Cabot Square’s buy-out from South African Waco International Group in 2001, he added: “The financial effect of the new investment makes available a new source of capital to accelerate the growth of the business which is in all other respects expected to continue with a consistent business model and product line in future years.”
Rental utilisation fell from 82 per cent to 67 per cent as Covid-19 contracts came to an end, having been seen as one of the halo organisations in the pandemic. Permanent solutions continued to grow market share in healthcare, education and residential.
Mr Harris added: “The business inhabits a space in the market that few other companies do. It has a significant rental business with infrastructure-type revenue streams, predictable cash flows into the future and a highly profitable sales business that offers genuinely superior solutions against traditional construction solutions.The group is in a position where it is able to grow both through market sector growth and through gaining a bigger proportion of that sector through its high quality solutions.”
Staff numbers were up from 280 to 299 in the period, with the position “at the heart of the modular building, cabin and caravan construction industry” one where it can “recruit from a labour pool steeped in the skillset required in our factory,” Mr Harris said.
Original artice – https://business-live.co.uk/all-about/yorkshire-humber