Reduced activity and contract bid failures hit Muir Group profits
Construction firm Muir Group has cited a reduction in Aberdeen property activity and a failure to win sufficient contracts from the tender market for a fall in both revenue and profit.
The Fife based group saw revenue fall to £54 million from £111m.
Group chairman John Muir described profitability before tax as a “healthy” £4.38m, although this was down from £13m in 2015 which included three major property developments in Aberdeen.
The reduction in Aberdeen activity and a loss making contract saw Muir Construction generate a loss in the year of £900,000 from a turnover which fell to £25.2m in 2015/16 from £58.3m in 2014/15.
The group’s Muir Homes company suffered a drop in turnover to £25,000,000 from £31,000,000 previous year with delays in starting new sites, the main reason. Profitability reduced by £1m to £3.1m on the lower volume although margins and average prices remained slightly ahead.
Muir Timber Systems continued its improvement with an increase in profits to £246,000 from £185,000 albeit on a slightly lower turnover. The company continues to focus on quality delivering to a select number of clients.
Deer Park Golf and Country Club, which recently hosted another successful Deer Park Masters, continued to improve revenues although not yet to the scale to fully cover costs. Losses reduced to £216,000 from £241,000.
Property Development – which includes both Hermiston Securities and Muir Aberdeen – had combined turnover of just under £12m compared to £58,000,000 last year. The prior year had three major property developments at Gateway Aberdeen compared to one in 2015/16. Overall profits of £2.4m was achieved, although this was well down on last year’s £9.8m.
Mr Muir said overall it was “a very creditable performance in a period of political uncertainty”.
The company continues to invest with stocks of housing and land up nearly £9m in the year. Employee numbers were down only marginally to 270 from 286.
It is anticipated that revenues will increase in 2016 particularly in construction, although development activity, particularly in Aberdeen, will be reduced.