Caddick Construction already has a profitable civil engineering division but it is working to widen its customer base.
“The division is currently looking to diversify and take on other civils work so as not to be totally reliant on the house-builders,” said chairman and owner Paul Caddick.
The plan is revealed in Caddick Group’s latest financial accounts, published this week.
These show that in the year to 31st August 2022, Caddick Group turnover was up 28% to £491.6m (2021: £383.7) and profit before tax soared to £58.0m (£17.1m).
“The profitability has stemmed from successful property development activities, although the construction and sports activities divisions have both incurred losses,” chairman Paul Caddick said.
Sports activities relates to Leeds Rhinos rugby league club, which Caddick owns.
Caddick’s property interests include Moda Living, which is a joint venture with Generate Land that develops build-to-rent (BTR) housing for the private rented sector.
“Schemes now completed comprise the 466 unit flagship Angel Gardens development in Manchester, the 325 unit Lexington development in Liverpool, the 337 unit McEwan development in Edinburgh, the 481 unit Mercia development in Birmingham and the 515 unit New York Square development in Leeds,” Paul Caddick said.
“The group currently has a number of other schemes on site, including a 433 unit scheme in Glasgow, a 564 unit scheme in Hove and a 398 unit scheme on a second site in Birmingham. Construction in progressing well, with the next completions being Glasgow in late 2023 and both Birmingham and Hove around mid 2024. The group and the investors have further BTR sites under their control across the country.”
Caddick Construction made a pre-tax loss of £3.9m on £84m turnover. The picture was mixed across the three divisions.
“The Yorkshire region has seen a reduction in turnover and profitability as a result of difficult trading conditions, principally arising form the war in Ukraine and the knock-on impact this has had on material, fuel, labour and subcontract prices, resulting in a loss-making position arising in the latter part of the financial year,” the chairman said.
“This has been mainly on the residential build contracts, where fixed-price contracts entered into earlier in the year have meant significant price increases have not been able to be passed on to customers, together with the cost of time delays due to materials supply issues and staff shortages.”
He added: “The company is confident that all losses arising have been provided for in the current year, with a forecast return to profitability for the 2023 year end.”
The northwest business and the civil engineering division, however, both made a profit.
“The North West region has continued to perform well, with turnover up 44% on last year but at a reduced margin, meaning profit before tax has increased just 10%. In light of the pricing volatility in the market this is considered a good result,” said Paul Caddick, who turns 73 this year.
“The civil engineering division, which derives much of its workload from the house-building companies, has seen a small drop in turnover (down 8%) but has continued to be profitable. The division is currently looking to diversify and take on other civils work so as not to be totally reliant on the house-builders.”
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