CHAP Group unveils 27% turnover boost

Aberdeenshire construction group CHAP (Holdings) Limited has hailed a 27% increase in turnover as an important step towards fulfilling its long-term strategy.

The Westhill-based firm recorded turnover of £51.5 million in its accounts ending 30th September 2018, up from £40.5m the previous year.

CHAP Group unveils 27% turnover boost

(from left) Douglas Thomson, joint managing director; Shona Gee, finance director; and Hugh Craigie, joint managing director

The privately owned company saw pre-tax profits increase to £193k from a loss of £276k in the previous period. Last year’s figures were affected by a write-down in investment property value of over £800k. A revaluation of the company’s final salary pension scheme saw an improvement of £677k and a total comprehensive income of £748k for the year.

CHAP’s Construction division saw a marked increase in turnover and whilst profit margin also improved, market pressures continue to suppress progress on this front. The division successfully completed Aberdeen City Council’s Smithfield housing development of 99 new affordable homes in addition to Peterhead Port Authority’s new fish market in Peterhead.

New contracts underway include: Aberdeen City Council’s new build Tillydrone Community Hub, the construction of Scalloway Fish Market on behalf of Shetland Islands Council, Moray Council’s Moycroft Recycling Centre Refurbishment and Extension and a new care home for the elderly in Fortrose on behalf of Parklands Group.

CHAP’s Civil Engineering division also saw an increase in turnover compared to 2017 and recorded a welcome return to profit. In 2018 the division successfully completed two electricity infrastructure strengthening projects on the Fair Isle and the Isle of Canna. Current contracts include site servicing for the CHAP Homes division, various works on the Moray East Wind Farm Project and bridge re-decking works on the A96 near Keith.

The CHAP Homes division now has three live housing developments underway: Marchstone Point is development of new build flats in the heart of Aberdeen, Crest of Lochter in Inverurie, a mix of 53 two, three & four bedroom detached and semi-detached homes and finally Countesswells, consisting of 30 three and four bedroom family homes. The Homes division is still in a period of regeneration following a brief fallow period but growth of the Homes division is a key component of CHAP’s long-term strategy.

CHAP Quarries’ turnover dipped in 2018 with the conclusion of the AWPR, which saw competitors aggressively return to the local marketplace. The resulting margin pressure saw the Quarries division return a small loss for the year. A significant contract win - supply of sand and aggregate to the Aberdeen Harbour Expansion Project - is expected to provide a base workload for the division for the next two to three years. A planning application for a new sand resource to the north of Ellon was rejected.

The division is currently reviewing the application position following an appeal and anticipates making a revised bid in the summer. The division continues to actively seek additional quarry resources across Aberdeenshire.

Hugh Craigie, joint managing director of CHAP Group, said: “Trading continues to be highly competitive; however the increase in the group’s turnover during the past year is an important step towards fulfilling the group’s long-term strategy. We are excited that our Homes division now has three new live developments, and beyond the direct benefit to the group this brings, the internal workload that has been driven to the other divisions is already benefiting the group as a whole.

“The economic impact of Brexit is a concern and whilst the apparent lack of confidence is stifling much needed investment, we are confident that we are well placed to ride this out. The supply contract for the Harbour expansion project will provide our Quarries division with valuable turnover for several years and the outlook for our Construction arm is positive with a number of strong contract leads currently under negotiation.” 

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