Construction, engineering and development group Henmead has more than doubled its pre-tax profit, largely driven by its construction activities and work in the water sector.
The firm, which includes the Eric Wright Group, posted a pre-tax profit of £11.2m for the year to the end of December 2024 compared with £3.9m for the previous 12 months, on a 25.6 per cent rise in turnover to £291.8m.
“Over the past year, the group has demonstrated a sizable improvement in its overall business performance, driven by a combination of strategic initiatives, operational efficiencies and market responsiveness. Improvements have been seen in the economic and political landscape, and ongoing challenges continue to be successfully navigated but undoubtedly impacted trading ability and investment decisions,” chairman Richard Wright said in the group’s accounts.
Henmead’s cash position rose from £16.2m to stand at £19.8m by the end of December 2024. Overall, the group added 91 staff to its books to reach a total of 939.
In its construction division, Henmead increased turnover from £69.9m to £77.6m over the course of 2024, “generating a convincing profit for the third consecutive year, evidencing that the business is now well positioned to generate sustainable profits going forward”, the company said.
Henmead noted that while construction gestation periods remained long and difficult to predict, it had secured a number of preconstruction agreements during 2024, which reflected the “value of early engagement and collaboration”.
As well as continuing its relationships with the likes of Torus, Muse Places, Lancashire County Council and Great Places, Henmead also engaged with new clients, including Lancashire Police Constabulary. “The company has also been appointed to the North West Construction Hub Low Value Framework (£1m-£4m) and the Innovation Chain North Framework, further enhancing its access to publicly funded opportunities alongside existing framework agreements,” it added.
In its civil engineering business, Henmead posted a slight drop in turnover – down from £26.4m in 2023 to £24.9m last year, but the division swung back into profit at the pre-tax level with £200,000, compared with a £700,000 loss the previous year.
The dip in the division’s turnover was put down to challenges related to budget constraints on the part of clients, which led to delays to the starts of certain programmes. But the company attributed the move back into the black to “many of the positive changes made by a strengthened management team”.
Henmead’s water operations saw a successful year, with turnover and pre-tax profit considerably higher. Turnover for the year to the end of December was £112.5m compared with £65.3m in 2023, while profit before tax for the water division rose from £500,000 in 2023 to £1.3m last year. The group said the turnover figure had beaten expectations, “primarily driven by an accelerated project pipeline as the AMP7 spending cycle neared its conclusion”.
While the business performed well generally, there were certain regional concerns, particularly with its operations at Severn Trent Water.
“These stemmed from a rapid increase in turnover and a shift in the nature of the works undertaken, which resulted in both procurement and delivery challenges leading in turn to certain contracts becoming loss-making,” Henmead said in its accounts.
Meanwhile, it was a case of mixed fortunes at Henmead’s other divisions. Turnover in the property development department fell £4.7m to £21.6m, but pre-tax profit was up 550 per cent at £1.3m.
Facilities management saw turnover rise by £2.2m to £23m, but pre-tax profit halved to £600,000.
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Matthew Davies