Robertson Construction takes the pandemic blow on the chin

Construction group Robertson has reported a sharp decline in profits after amending its reporting period to take the bulk of the impact of pandemic disruptions in a single financial year.

In accounts now filed with Companies House, the family-owned group extended its financial year to the 15 months to the end of June 2020 to absorb the three-month closure of the majority of its 100 construction sites in March of last year. Chairman Bill Robertson said that with the first lockdown starting two weeks before what would have been the end of the regular reporting period, the extension also gave directors time to assess the financial impact of Covid-19 on the business.

“This has proven to be a successful strategy as we made a strong recovery [in the current financial year] and are now operating close to our normal trading expectations,” he said.

“The group enjoyed a positive year, however profits generated in the 12 months to March 20 were all but eradicated in the quarter to June 2020 as we accounted for closed sites in Scotland and a significant reduction in productivity at our English-based operations in the period.”

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After taking £11.5 million of Covid-specific charges, pre-tax profits fell to £1.2m during the 15 months to June, compared to a profit of £21.5m in the previous 12 months. Turnover of £637.2m was also lower than the previous year’s £713.4m.

With operations across infrastructure, construction, support services and timber production, Robertson employs more than 2,700 people across its various subsidiaries and joint ventures. Examples of past projects include The Macallan Distillery and Visitor Experience, Spanish City in Whitley Bay, and the Balfour Hospital in Orkney.

The group did not take any government-backed Covid emergency loans, but it did make use of the Coronavirus Job Retention Scheme. During the period from April to mid-June, approximately one-third of its employees were on furlough, with a gradual return to work through June and July.

The majority of construction sites closed in March of last year, except for some key sites in Scotland and those in England. The timber engineering facility was also forced to close during the first lockdown, and while the facilities management business continued to operate from the majority of its 80 sites, this was on a reduced basis and in some cases adapted to provide a different service to clients.

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All sites are now operational, with productivity returning to pre-Covid levels as businesses adapt to health-related operating restrictions. Where possible, working from home continues to be the default position.

“Like so many other companies we have had to quickly adapt to more flexible ways of working,” directors said in their strategic review. “We continue to assess the positives from this period to ensure we find a working environment going forward which best fits the business and our staff.”

Gross margins for the 15-month period fell from 8.4% to 7.2%, with the previous operating profit margin of 2.4% reduced to a loss-making margin of 0.9%.

No dividends were paid during the period under review, though directors’ collective remuneration – including contributions to money purchase schemes – rose from £3.7m to £4.7m, in line with the extension to the financial year. Total emoluments of the highest-paid director were £1.48m, down from £1.57m.

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Following an extensive review of all operations during the lockdown period, the group has implemented changes to safe working practices across all areas of the business. These are reviewed regularly as circumstances and government guidance change over time.

Mr Robertson said the group, which began as a joinery firm in Elgin in 1966, is now well-placed to deal with the challenges presented by Covid-19.

“With the health, safety and wellbeing of our employees, customers, supply chain and the communities where we work our number one priority, we have worked to stringent Covid-safe operating procedures and are pleased to have weathered this period of uncertainty,” he added.

“We look ahead with confidence as we continue with our long-term strategy to deliver sustainable and quality profit growth.”

The Herald Scotland

The Herald Scotland

The Herald is a Scottish broadsheet newspaper founded in 1783. The Herald is the longest running national newspaper in the world and is the eighth oldest daily paper in the world. The title was simplified from The Glasgow Herald in 1992