ERH Group results offer hope for construction sector

South West and Wales based construction, communication technology and civil engineering contractor, ERH Group, has reported excellent financial results, with turnover rising to £42million, an increase of more than 50 per cent compared to the previous year.

The profit before tax (PBT) rose sharply to £1million, following a re-organisation of the Group’s activities in a drive for greater efficiency. This operating margin of 2.6 per cent, was an improvement of 1.1 percent against the previous year and although in line with expectations, represents an encouraging step towards the company’s 4 per cent target.

The performance reflects the decision in 2009 to focus on core sectors and align the business with key frameworks that help ERH Group contest tenders for many of the larger infrastructure projects across the South West. Recent successes include major contracts with Bristol Airport, South East Wales Highways Framework, Bristol City Council, Cardiff Councils, Bath and North East Somerset Council, MOD, Fluor, Gladman Properties and a wide range of highways projects for the Welsh Government.

Under Group Managing Director Dave Jones, the company has adopted a much more strategic approach to the bid and tender process, whilst getting a firm grip on its pre- and post-contract procedures. The business concentrates on enhancing every aspect of service delivery to its customers, whilst developing key sectors, including education, healthcare, care homes and highways infrastructure solutions.

Dave Jones commented on the results:

”This improved financial performance is the result of the hard work and commitment by everyone within the ERH Group. It’s been a tough few years for the sector and like many, we’ve suffered a little pain, but we recognised that to follow the pack and pursue contracts and turnover, at the expense of profitability, would only lead to failure – a fact borne out by a succession of failing contractors.

“Our processes across all divisions, Construction, Building and Communications are lean and efficient. We’re now in a good position to exploit the experience and resources within the group, to win tenders and deliver projects. The changes we have made to our business have realised significant efficiency savings and put us in good shape to achieve our growth targets – matching the 65% growth seen in 2012 however, will be a challenge.

“We are now reaping the rewards of the work undertaken overhauling all of our systems over the past few years from a cohesive group branding exercise to a new IT system and infrastructure. Sage Construction has helped streamline our contract processes and even the management team has undergone a thorough ‘skill set analysis’ programme to ensure we are future proofing our business – nothing is being left to chance in the pursuit of our ambitious growth plans.”

ERH are in the process of delivering the £12million+ Chippenham Care Village Scheme, and have recently completed multi-million pound care homes in Nailsea and Bath. These follow on from additional successful projects on the South East Wales Highways Framework, the High Occupancy Vehicle Lane and widening to the M5 junction 19 approach for North Somerset Council, Infrastructure works for Gladman Properties at Cullompton, and communications on the A55 for Conwy, Penmaenbach and Pen y Clip Tunnels. ERH have also successfully re-secured the Ancillary Framework for Roadside Communications, Road Tunnel Communications and Civil Engineering works for the Welsh Government.

The recent appointments to the Bristol Airport Civils Framework and the North and Mid Wales Trunk Road Agency Contractors Framework, for schemes up to £10m, perhaps highlight better than any balance sheet that ERH Group is now accepted as a well-established construction company able to deliver multi-million pound schemes.