Stepnell reports return to profit in 2021 after a challenging 2020
Stepnell says that despite a difficult 2019/20, the company has experienced a sustainable return to profit of £1 million, with a strong order book for this year and into 2022.
The 154-year-old family-owned firm, which operates across central and southern England, says it has a positive future ahead, despite experiencing an operating loss during the year to March 2020.
Stepnell has posted its 2019/20 accounts and an update to March 2021 – which shows a significant improvement in performance and profits with a turnover of just over £100 million.
Tom Wakeford, joint managing director of Stepnell Ltd, explained that the operational loss of £5 million had been offset with support of parent company Stepnell Holdings, resulting in a profit in the year.
Wakeford said: “It goes without saying that 2020 was a challenging year for the construction industry. Many in the industry struggled through the Covid pandemic and despite working continuously through the various shut-downs, Stepnell was not immune to the increased costs of working and the delays in delivering projects.
“In 2019, we were impacted by onerous ground conditions on our largest project, which has proved expensive to remedy. We have taken a prudent position in our accounts, allowing our team to focus on the financial recovery on the project. March 2020 saw a write down of legacy contracts due to Covid-19 which had a profound effect on our clients and our sector as a whole.
“Therefore, 2019 and 2020 were difficult years for different reasons. The 2019 losses are now more than two years old and Stepnell looks very different, in a very positive way, in 2021, with an anticipated rise in profit to around £1 million.”
Looking ahead, Stepnell has secured orders which will enable it to deliver sales in excess of £100 million during 2020/21 in line with its business plan. A good level of orders has also been secured for 2021/22 across all its regions which provides a solid stable business going forwards, he added.
“Our balance sheet is more than £15 million which is really strong. Our group has a property portfolio of more than £40 million, giving us a strong base. We are in a good position, having invested more than £10 million in the development of our new business park at Lawford Road, Rugby which has let well. We have a good workload secured for the new financial year to March 2022,” Wakeford said.
Stepnell has used the Construction Net Promoter Score to assess its performance by its clients. Its score to March 2021 shows an NPS of 41 – showing that the company is performing well above average, despite these losses on historic projects.
“This is a great achievement, particularly in the current construction environment,” added Mark Wakeford, joint managing director. “We are hugely proud of this client feedback in what has been very challenging times. Key to this success is our ability to be involved early on in projects where we can understand our clients’ objectives and then ensure we work as a team to achieve them.”
“We believe that in part, this assessment reflects how we adapted very quickly to the new way of working as a consequence of COVID19 where all our sites remained operational. Our staff adjusted well to new ways of working on site, in our offices and at home.
“We remain cautiously optimistic that our revised business model, with a focus on early engagement and client and supply chain partnership, on lower risk terms and conditions, will hold us in good stead. Stepnell has a more diversified range of projects than ever before and this positions us well to withstand market risks.”
“Strategically, Stepnell sees 2019/20 as a year of consolidation, carefully reviewing our customer base to be in line with our resources and the skills of our supply chain. We continue to refine project selectivity this year, being cautious and only signing up on the right commercial terms.”
Stepnell continues to manage successful framework projects for National Grid, Oxford Brookes University, Worcester University, Crown Construction, New Forest and Dorset County Council. It has also recently secured its spot on two new frameworks, the Public Sector Construction Works Framework, managed by NHS Shared Business Services and Procure Partnerships Framework.
Mark Wakeford added: “Because of the stability of Stepnell and the parent company, we know we have a robust future, despite the difficult climate. Our underlying performance is improving and our future is bright.”