Labour supply firm, Danny Sullivan Group, has blamed “significant pressure on margins from government infrastructure projects” after profits plunged by more than two-thirds.
In an extended 17 month period to 31 December 2024, pre-tax profit fell 67.6 per cent to £3.6 million from £11.3 million, while operating profit dropped 71.6 per cent to £3.2 million from £11.3 million.
The London-headquartered firm reported revenue of £240.7 million for the extended period, up from £143.8 million in the previous 12-months, following a change to its financial year-end requested in April 2024.
Profit for the year was £2.7 million, down from £9.2 million in 2023, with profit margin falling to 1.1 per cent – the lowest in 10 years – from 6.4 per cent in 2023.
Net assets dipped slightly to £22.3 million (FY2023: £25.8 million), but was supported by an increased cash position of nearly £14 million, compared to £10.1 million in 2023.
The company said performance was in line with directors’ expectations but confirmed it faced “significant pressure on margins” from government infrastructure projects, prompting actions to adapt the business.
In June, Danny Sullivan Group concluded a review of its labour contracts and tax records, assuring compliance and overhauling its governance – including a “major reorganisation” of its executive team – but the following month was dropped from all Balfour Beatty contracts and some BAM projects amid ‘compliance concerns’.
The firm denies wrongdoing and has said improvements have been made, with its post balance sheet statement stating there were “no events since the period end which materially affected the company”.
SPONSORED CONTENT by CHIME
“Having an electronic platform has improved timekeeping across the workforce and provided real-time accurate reporting.” Russell O’Dwyer – Engineering Director, Timeless Building Services. Read More
Looking ahead, directors plan to expand services to existing customers and attract new ones.
“The key performance indicators show a consistent and growing business,” bosses said.
“The company has a strong balance sheet with strong liquidity, a healthy order book from long standing blue chip customers and no third party borrowing.
“The directors are confident that the company can continue to trade successfully for the foreseeable future and meet its obligations as they fall due.”
Headcount rose by 117 to 1,555.
Interim dividends of £6.2 million were paid during the year, but no final dividend was recommended.
Was this interesting? Try: Another year of strong growth as OCU Group diversifies across UK infrastructure markets
If you have a tip or story idea that fits with our publication, please contact danielle@wavenews.co.uk
Get industry news in 5 minutes!
A daily email that makes industry news enjoyable. It’s completely free.
