Chap Group boost turnover but warns about impact of external pressures
Chap Group has warned of external pressures impacting growth ambitions as the construction firm posted a large increase in turnover and narrower losses.
The north east firm saw turnover increase to £39.4 million during the year to September 30 2021, from £29.6m in 2019-20.
Pre-tax losses for the same period came in at £705,000, down from £934,000 previously.
However, in light of material and labour cost inflation caused by the “unprecedented combination” of Brexit, Covid and, more recently, the Ukraine conflict restricted margin growth, the company warned that meeting client budget expectations has become “increasingly difficult” and winning work “more challenging”.
Managing director Hugh Craigie said: “I am pleased at the improvements achieved in the period, albeit it remains frustrating that external factors continue to hinder progress.
“It has been satisfying to see our focus on debt reduction programme bear fruit and for this to be recognised by our banking partner Santander, who have granted us a two-year extension to our facilities.”
Mr Craigie said: “The group faces a number of market-driven pressures, including material availability and inflationary cost increases.
“These market factors increase the pressure on trading margins and could make winning new work more challenging in an ever-competitive market.
“The group, however, have taken steps to mitigate the risks of supply shortages and price increases by maintaining strong relationships with its supply chain.”