Contractor Northstone fights against recession
Published 01/10/2013 | 01:30
Northstone (NI), formerly known as Farrans, headquartered in Dunmurry, is one of Northern Ireland's largest building and civil engineering contractors.
It is a wholly owned subsidiary of CRH plc (Cement Roadstone Holdings), registered in Dublin.
In addition to building and civil engineering contracts, the firm also engages in the production of building materials and of access systems to the utility industry, trading as Cubis Industries.
The trading results show the initial impact of the emerging recession in the construction sector. Annual turnover peaked in 2009 after earlier increases but, in 2010, turnover fell sharply to the level of five years earlier. Then in 2011 and 2012 turnover has recovered and in 2012 reached a new high level.
The recent company report describes market conditions in 2012 as continuing to be very challenging. Tender prices have further tightened but the directors are satisfied that they have continued to outperform their peers.
In May 2013, Northstone (NI) in a further acquisition, acquired 100% of the ordinary shares of Cemex (NI).
During recent years there has been increasing pressure on tender prices and profit margins. Operating profit peaked in 2007 at over £15m. Since then, year by year, it has fallen to just over £8m in 2010 and after a further fall to £7m in 2012. Pre-tax profit also peaked in 2007 at over £20m. More recently, pre-tax profits are only 40% of the level five years ago.
Employment numbers at 1,074 peaked in 2009 and then fell to a lower average of 971 people in 2010. Since then there has been a small increase to average of 992.
No dividends have been paid since a payment of £2.9m in 2009.
When retained profits are added to the balance sheet value of shareholders' funds, the total value of shareholders' funds, which fell to £76m in December 2009, has recovered to just over £84m in December 2012.
In keeping with higher expectations about corporate performance the company report sets out its core corporate social responsibility principles, backed up by an outline of its environmental policies and its commitment to social and community issues.