M&E specialist Lorne Stewart has reported a loss in profits following a challenging trading period marred by subcontractor insolvencies and soaring inflation.
Turnover for the year ended 31 December 2023 was £118.7 million, down from £149.3 million in the previous financial period, generating a pre-tax loss of £2.3 million (FY2022: £612,000 pre-tax profit).
The Greenford-headquartered business also reported an operating loss of £2.6 million last year, compared to a £783,000 profit in the prior financial period.
Lorne Stewart’s balance sheet showed net assets for the period valued at £15.6 million, down from £17.6 million in the year before, with cash reserves of £10 million, down from £14 million in FY2022.
At 31 December, however, the company was fully funded internally, and it reported no external borrowings.
The contractor declared a loss for the financial year of £1.8 million, compared to a £377,000 profit in FY2022.
The wider Lorne Stewart Group comprises Lorne Stewart Engineering, Lorne Stewart Facilities, Rotary Building Services, and Modular Designed Solutions.
“Though we sought to engage with clients to manage the impacts of higher cost due to inflationary pressures, our efforts to finding a solution in a difficult environment have not always been accepted and has resulted in increased built cost,” said the business.
“This complex situation was further aggravated by supply chain insolvencies fuelled by difficult market conditions and difficulty in recruiting and retaining skilled workforce.”
The industry continues to be the worst-hit in England and Wales, with 12.67 per cent more companies folding than the next highest sector: wholesale and retail trade; repair of motor vehicles and motorcycles.
Construction accounts for 18 per cent of insolvency cases, with 4,401 in the 12 months to April 2024, according to the most recent findings.
The last time construction fell below the highest number of insolvencies was the year ending Q3 2017.
Was this interesting? Try Ainscough returns to profit in strong set of results
If you have a tip or story idea that fits with our publication, please contact the news editor rory@wavenews.co.uk
Get industry news in 5 minutes!
A daily email that makes industry news enjoyable. It’s completely free.