North of England-based Esh Group has reported a record £300 million-plus forward order book and 14% increase in turnover, according to the latest annual report and financial statements for the year ended 31 December 2019 published by holding company Esh Investments Ltd.

During the period turnover over rose 13.9% to £212.6 million, compared to £186.5 million in 2018.

In the second half of 2018 the Group initiated a comprehensive reorganisation plan following a thorough review which concluded that it had reached a size and scale that was “becoming a challenge to manage in its existing form.”

“Processes and technology were creaking, our management structures were cumbersome and our customer proposition became confused and difficult to articulate”, the Group said at the time.

Commenting in its latest strategic report, Esh Investments Ltd said:

“In the 2018 report we announced the outcome of our comprehensive strategic review. 2019 was a year focussed on implementing the strategy, something that was not without cost as the results reflect. However, thanks to the commitment and hard work of our staff we left 2019 in a much stronger position and well-placed to face the challenges of COVID 19 and the subsequent economic fall-out.”

The reorganisation resulted in a 2019 operating loss of £2.9 million from discontinued operations, including the closure of all Esh’s operations in Scotland and North West England.

During 2019 the Group was restructured down to three businesses operating solely in the North East and Yorkshire regions as follows:

• Civil Engineering
• Living, Build, Facilities
• Private Housing

Civil Engineering includes large scale infrastructure works via the Esh Civils brand and Utility and Environmental Services, delivered primarily via the Esh-Stantec Joint Venture with Northumbrian Water, which was extended in October 2020 for AMP7.

The Group’s key strategic actions for the Civils Business going forward are to:

• maintain a healthy balance of turnover across cyclical and non-cyclical sectors
• increase average contract size through securing larger infrastructure projects
• grow its Yorkshire operation

Commenting on current market outlook, the strategic report says:

"Demand remains relatively strong in our main markets. Work in the utilities and environmental sector is largely recession proof. We continue to support Northumbrian Water with our services recently being expanded to cover a broader geography.”

Esh Group’s chief executive Andy Radcliffe commented:

“Following the reorganisation our business is in a position of considerable financial strength, our liquidity remains very strong with a 2019 balance sheet standing at £33m, of which £15m is cash. We now have a business that is leaner, more customer and market focussed, and which is aligned to resilient and robust sectors of the market.

“While undoubtedly the pandemic has had some impact on our operations during 2020, our strategy has served us well and enabled us to successfully mitigate the impact of Covid-19 on our business.

“We start 2021 in our strongest position in years, with a healthy pipeline of work made up of high-quality contracts for private and public sector clients, and importantly, the financial fire power to deliver our new growth strategy.

“Our £300m order book comprises sectors that appear to be resilient, and in some cases, stimulated, by the impact of the pandemic – as a result we expect to deliver a healthy level of profitability throughout 2021.”