Esh Group admits it ‘grew too quickly’ following trading loss

Michael Hogan

Esh Group has admitted that it “grew too quickly” and is working to simplifying its business after making a trading loss over the last year.

The Durham-based company, which Scottish Construction Now revealed is to reduce its construction activities in Scotland at the loss of 17 jobs, has posted an operating loss of £475,000 for the year ending December 31 2017, after its revenue fell by £22 million to £220m.

Describing the results as “disappointing”, Esh’s management team is now set on downsizing and focusing on core strengths.

Non-executive chairman Michael Hogan said: “We admit that we are coming through a very tough couple of years when the group probably grew too quickly.

“We didn’t have the appropriate level of control, while trying to manage our business on multiple fronts. We also acknowledge that we didn’t have the right skills in place, nor up-to-date systems and technology.”

Earlier this month told Scottish Construction Now that a “comprehensive strategic review” of its operations in Scotland will see a “restructuring of activities” carried out by its Livingston and Galashiels offices.

The review has led to 17 people leaving the company, which employs approximately 450 people across all of its offices.

Esh said at the time that it remains “fully committed” to its projects in Scotland and has offered support to colleagues affected by the changes.

Across the group restructuring exercise, a new business strategy has been introduced with six key points, including simplifying the group’s structure and operations to maximise returns for shareholders.

Esh Group’s headcount also fell during the year, from 1,097 in 2016 to 1,038 in 2017. The production team shrunk by 40 members of staff to 425, while the admin team decreased from 632 workers to 613.

Chief executive Andy Radcliffe said: “Here at Esh Group, we have embarked on a major restructuring of the way that we operate and go to market. While this restructuring has resulted in selected withdrawal from certain types of businesses, it has also enabled us to focus our efforts on our core competencies, and so, drive operational improvements for the benefits of our clients.

“Periods of adjustment in any business inevitably lead to an impact on both the top and bottom line. At Esh Group, this has been compounded with the heavy investment that has been made in developing and implementing new technology throughout the business, as well as a degree of ‘Brexit’ uncertainty challenging some of our market segments.

“However, everything we are doing to transform Esh is aligned to a core strategy of simplification and improved competitiveness. We continue to make good progress along this journey.”

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