Northumberland sustainable construction company Merit has maintained its revenues and invested for growth in a trading year impacted by the pandemic.
The Cramlington business has posted accounts for the 15 months ending June 30 2020, showing a lift in turnover from £34m to £37.1m but a fall in pre-tax profit from £1.28m to £802,230 as contract delays caused by Covid-19 affected its financials.
Operating profit also fell, from £1.288m to £806,103, although the year saw the firm take up extra expense of a new head office next to its existing office in Cramlington.
It also signed a lease on extra manufacturing space, across the road from its current site, taking its manufacturing footprint total to 270,000sqft.
Despite the fall in profits, the firm’s directors hailed its continuing profitability, while also describing how it has been investing and working towards winning larger contracts.
The firm, which has been legally protecting its processes through patent applications and copyright protections, said it now has a suite of flexible pods that can be applied to most of its client situations, which is particularly important because many projects are time sensitive.
In a report accompanying the accounts, the directors said: “Merit also continue to be at the forefront of zero carbon facility designs and are already making huge inroads into improving energy efficient design and eliminating fossil fuels from all our projects.
“Our leadership in this new business methodology is already seeing us bid for a large number of contracts that are important to UK plc. We are doing this against global competition, who are less nimble and either unwilling, or unable, to change their own traditional approach to construction projects.
“We continue to believe this will see us winning large larger projects, particularly in new and emerging markets, such as cell gene therapy and new innovative battery technologies, where we already have the best references and credentials in the UK and perhaps even in Europe, on projects completed or currently nearing completion.“
Last week the firm revealed it is on the brink of significantly adding to its 160-strong workforce, on the back of the factory expansion, having ramped up its offsite construction techniques in lockdown.
Following publication of the accounts, Merit managing director Tony Wells said: “We maintained good profitability, with strong cash generation, ensuring our credit rating remains high. This was despite lower-than-expected turnover in the latter months of this financial period because of Covid-related contract award delays.
“One area where we expect our significant pipeline of opportunities to convert in 2021 is healthcare, pharma and biotech, which are now served through our recently-launched Merit Health subsidiary. The Government is only going to meet the combined challenges of an ambitious hospital building programme and the NHS’ net zero carbon commitment through the innovative thinking of companies such as Merit.
“Our financial strength, together with our faster, cheaper and more efficient manufacturing and construction methodology, makes our offer compelling to virtually any customer embarking on a new project.
“Whilst already operating one of Europe’s largest off-site manufacturing facilities, we have further expanded the space to 270,000sqft. This room to operate, combined with our approach to offsite manufacture, enabled us to continue working on client projects throughout the pandemic and positions us perfectly for growth in 2021.”