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Seddon Group has returned to profit after imposing tighter cost control and limiting its exposure to new long-term contracts.
Turnover rose by 4.4 per cent from £153.9m in 2022 to £160.7m the following year, the Bolton-based firm’s latest accounts show.
This generated a pre-tax profit of £1.6m compared with a loss of £13m the year before, and a positive margin of 1 per cent.
The main trading business, Seddon Construction Ltd, saw its revenue grow from £149.8m to £155.3m, which was 97 per cent of the group total.
Seddon was the 74th-biggest UK contractor by turnover in 2023, according to the CN100 2023 table.
Jonathan Seddon, managing director of the family-run group, said the turnover increase was intentionally “modest” and resulted from a “high degree of selectivity around projects in order to manage our risk exposure and to focus on opportunities that we are best equipped to deliver”.
In his strategic report accompanying the accounts, Seddon added that the construction business continues to target “a diverse workload” with a stronger focus in 2023 on property services, decarbonisation, painting and maintenance work.
The shorter duration of these contracts means they are “far less affected by the inflationary pressures seen elsewhere in the business”, he added.
Wins for Seddon in 2023 included a place on Pagabo’s £1bn framework for medium-sized projects, Fusion21’s £125m decorating framework and the £8bn framework from Procure Partnerships.
Seddon described a “strong” pipeline of contracting work last year, adding that the firm was “able to convert a number of projects to site that had previously stalled due to the rising cost base caused by inflation”.
Inflation clauses have been negotiated with clients where possible, he said, adding: “The perennial challenge in converting projects from the preconstruction stage is made ever more challenging by the expectations gap around building costs that the high inflationary environment has created.”
Administrative costs fell by £200,000 to £11.9m in 2023, reflecting what Seddon described as “strong overhead control”.
Headcount across the group fell by 34 to a monthly average of 487 staff. Seddon Group was able to increase the number of apprentices as a proportion of its workforce from 9 per cent in 2022 to 11 per cent last year, however.
The firm held no bank loan debt and it was able to almost double its net cash position from £11.6m to £20.4m in 2023.
“The increase in cash was driven by a reduction in amounts due from related parties and was particularly pleasing as we also saw a large cash outflow on a number of loss-making construction contracts, which had been severely impacted by significant inflation in 2022,” Seddon said.
He added that Seddon had already secured about 80 per cent of its 2024 order book, with “other projects identified which we are confident can also be secured and taken to site in the coming months”.
In the year to date, the firm has gained a place on frameworks from the North West Construction Hub, Fusion 21, the Communities and Housing Investment Consortium and Efficiency North.
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