Framework start-up costs dent Clancy Docwra profits

Civil engineering contractor Clancy Docwra blamed a fall in pre-tax profits of over a quarter to £2.2m on first year start-up costs on a raft of new long term frameworks.

Revenue also slipped 7% to £256m as competitive market conditions also took their toll on the firm’s performance in the year to March 2016.

Operating margins slid from 1.5% in the previous year to 1.2% in the 12 months.

Clancy strengthen its management over the year with the number of staff classified as managers in its account rising from 81 to 218.

Some of this rise was partially offset by a slight fall in operative numbers, leading to a 3% rise in overall headcount to 2,150.

Joint chairman Kevin Clancy said the firm had made good progress developing from its core water business into the energy and to a lesser extent rail sector.

He said: “2015/16 represented the first year for a number of key longterm frameworks secured previously amd while results in some areas have been challenging, it is expected that these will improve in 2016/17.”

He added that the business would now have a strong focus on enhancing the overall performance of its framework contracts while developing further opportunities within key target utility markets.

Clancy had entered into three major framework contracts with energy distribution network operators which had the potential to span the regulatory period up to 2023.

In the water sector, Clancy secured new framework contracts for mains renewals with Sutton and EastWater, which is worth around £9m a year and could run for 10 years.

In the energy sector, the firm has also secured a framework with Northern Powergrid in the North East and Yorkshire for new scopes of work.

Long term frameworks have also been signed with UK Power Networks in an alliance called Ed1son, and with Scottish Power to deliver services across the Scottish areas of its operation.

from Construction Enquirer http://www.constructionenquirer.com/2016/10/25/framework-start-up-costs-dent-clancy-docwra-profits/

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