Higgins Group has bounced again to revenue after it “robustly” carried out within the face of upper inflation and rates of interest, and constructing security prices.
The Essex-based contractor additionally confirmed authorized provisions of £10m for constructing security, together with for an unspecified declare round water ingress and fireplace security laws.
It recorded a pre-tax revenue of £278,000 within the yr to 31 July 2024, a yr after it slumped to a pre-tax lack of £25.8m, which it blamed on “project viability issues”.
However Higgins mentioned it had “carried out effectively” in the newest yr, pointing to its “strong administration of working capital”.
Turnover was additionally up at £208.3m from £171.9m, as a result of agency reaching “strong gross sales” and in addition as a result of it had “sensibly managed” the impression of inflation and elevated rates of interest.
The contractor acknowledged that inflation and rates of interest “affected client demand leading to a slowed gross sales price and including additional strain to challenge viabilities”.
Over the course of the yr, it accomplished 530 properties throughout eight tasks.
However Higgins Group additionally confirmed spent £4m within the yr on building-safety-related rectification works – and in addition confirmed authorized provisions of £10.0m.
A few of that determine pertains to a single declare relating to one web site “with a variety of defects referring to water ingress and compliance with fireplace security laws”.
However Higgins mentioned it believed it has a “very robust defence” towards the declare.
“[There is also the] probability of having the ability to recuperate any settlements by means of counter claims towards the provision chain and thru insurance coverage,” it added.
Higgins expects to pay out the provisions inside two years.
In September, the Grenfell inquiry revealed its ultimate report.
The report mentioned: “[The findings] do not need a direct impression on Higgins Group as the corporate stays dedicated to its method of co-operation with shoppers to agree a remediation technique.”
The contractor mentioned that the necessities of the Constructing Security Regulator, and a “difficult planning system” have led to uncertainty and delayed challenge begins, notably in London.
Higgins additionally detailed a “contingent legal responsibility” confronted by one among its joint ventures – Myatts Discipline Growth – which its subsidiary Higgins Properties has a 50 per cent stake in.
The JV – established to regenerate an property within the Oval space of London – owed an extra fee to Lambeth Council, which it exchanged paperwork on after the tip of the monetary yr.
Wanting forward, Higgins detailed an order e-book and improvement pipeline in extra of £1bn, and mentioned it scooped spots on six frameworks through the yr, and 4 particular person tasks.
Its return to revenue follows a restructure, with job cuts, in June 2023, when its chairman and director retired.
Brothers Declan (pictured left) and Dominic Higgins (pictured centre) turned chief government and chief working officer respectively, whereas their cousin William Higgins (pictured proper) turned group government director.
All three are grandsons of Derek Higgins, who based the enterprise in 1961.
