Company vows to bounce back from “perfect storm”.
The Coleman Group says it expects to return to profit in this financial year following one of the most difficult trading periods in the 56 years of the company.
Chief Executive Mark Coleman said the closure of a loss-making recycling facility, a top-to-bottom restructuring that removed £600,000 in overheads, and the disposal of specialist assets had helped the company turn the corner.
“The trading losses have been stemmed and the business is on track to return to profitability for the year – a very credible performance given the perfect storm faced over the preceding 12 months,” Coleman says.
Published accounts show that the Group’s main trading subsidiary Coleman & Company made a loss after tax for the year ended 30 April 2018 of £1.37 million, compared to a profit of £0.95 million in the previous 12 months. Turnover was down from £26.7 million to £15.1 million. This was largely driven by the deferral of two major contracts worth £11 million to 2019. Exceptional one-off costs in respect of the Didcot contract were £349,000.
Incorrect valuation of work in progress and sales reserves in Coleman Remediation Services was reflected in a trading loss of £611,456 for the subsidiary. A problem with a single contract in the Cutting Services subsidiary also resulted in a £434,776 loss. Overall the parent company CNC Group Holdings Limited has filed a trading loss after tax of £2.44 million, compared to a profit of £1.25 million in 2017.
It is only the second loss recorded in the company’s 56-year history, the previous coming in 2008/9 after the global financial crash.
Coleman says the company had been through a “perfect storm” of Brexit uncertainty, the deferral of two major contracts, and on-going legacy issues following the tragic incident at Didcot three years.
“The cost-saving measures and restructuring will underpin the return to profits. The business is now better equipped to deal with both risk and opportunities as they arise and, with Net Assets of £7.2 million despite a poor year, the Group remains financially strong,” he concludes.