Utilities contractor’s profit held back by ‘onerous’ contract charges

Utilities and infrastructure contractor Network Plus Services has seen its turnover rise by 9 per cent to £584.8m in its latest annual accounts.

However, the firm’s pre-tax profit fell from £31.7m to £24.5m over the period, largely due to restructuring charges and costs relatied to exiting what it described as an “onerous” contract.

This resulted in a narrower profit margin of 4.2 per cent compared with 5.9 per cent the year before, when Network Plus turned over £536.3m.

Exceptional items cost the company £10.96m in the 12 months to 31 March 2025, including a £7.3m charge for exiting the unnamed contract, according to Network Plus’s accounts.

Meanwhile, the firm’s transformation programme and redundancies cost £1.1m and £611,000 respectively.

Nonetheless, Network Plus described the period as “another successful year”, adding that “both the water and energy sectors experienced year-on-year growth as capital investment programmes and repairs and maintenance activity increased across our client base”.

The group’s cash position improved to £35.7m from £25.3m in the previous accounting period, and its average number of employees increased from 2,392 to 2,423.

The company said it had won a number of new contracts, “expanding smart metering services and continuing our geographic expansion”.

In June last year, for instance, Network Plus was among 18 new firms joining United Utilities’ AMP8 programme in the North West.

Network Plus launched a district heating division and also acquired vegetation management business AC Landscapes, which enhanced its presence in the strategic highways market.

During the year, the firm also spent £17.8m to acquire Littlewood Group, which provides fencing services to the construction industry.

It paid out no dividends and held no bank loans or overdrafts.

Looking forward, chief financial officer Michael Porter said the group’s order book was “strong” and work volumes on existing contracts were increasing.

“We are well positioned to embark on the next phase of our development through organic growth, selective bidding of new opportunities and further acquisitions that will expand our range of services and our client base,” Porter said in his strategic report accompanying the accounts.

“Our focus will remain on those markets where non-discretionary spending programmes exist to maintain critical infrastructure.”

Kevin Fowlie became chief executive of Network Plus in November 2024, having previously served as chief operating officer (COO).

He was succeeded as COO by Dave Prescott this July, after the period covered by the latest accounts.