Builder Henry Brothers takes hit on turnover after standing firm on prices
A major construction firm in Co Londonderry has said it will hold firm against an industry trend of submitting low bids for work - despite a negative impact on its turnover.
Tough conditions in the building sector, where output is yet to fully recover to pre-downturn levels, have meant that many firms have cut their prices in order to stay in business. However, Henry Brothers in Magherafelt said it had made a "strategic" decision not to submit tenders at a low cost, despite the pressure to do so from its competitors.
But in a strategic report filed with its accounts, the directors of Henry Brothers said they had been choosy about obtaining high quality work and would not be changing course. The firm's interests are split across the commercial, defence, healthcare, industrial and education sectors - and it recently started work on a £12m laboratory for Loughborough University in England.
The company said it was "selective in targeting tender opportunities where they are confident of a positive return and with a prospect of repeat business and partnering opportunities".
It added: "The directors have continued with the strategic decision not to pursue cut-price bids, despite the actions of many of the company's competitors, who have continued to bid at unsustainable levels, resulting in negative margins."
Turnover at the firm slumped by around 30% in the year to March 2015, according to its latest accounts, from £45.8m in 2014 to £33m.
The company explained that its strategy of not bidding at a low level had hit turnover - but added that its strategy not to build at low level was "to defend the company's balance sheet whilst providing sufficient activity within the business to retain key staff until such times as more becomes available".
Pre-tax profits showed only a slight fall, from £1.2m to £978,744.
And staff members fell from 173 to 158.
The company has carried out contracts on major church and office projects around Northern Ireland.
Its church work included the historic Union Road Church in Magherafelt, while office projects include Lanyon Place in Belfast.
It has also worked on the restoration of Antrim Castle Gardens.
But, in common with other construction firms which have been forced to look for work elsewhere due to the slump at home, many of its contracts have also been for projects in Great Britain.
Those deals have included work on schools such as West Acton Primary School in Ealing, London, a £3.3m project, and a firearms training centre for Her Majesty's Naval Base in Clyde - the headquarters of the Royal Navy in Scotland and the base of the government's Trident missiles.
Also in Scotland, it built Mayfield Primary School in Saltcoats in North Ayrshire in a £3.25m deal.
And in November the company started work on a new laboratory for science, technology, engineering and maths (STEM) at Loughborough University in England.
Henry Bros is the main contractor on the project, which is worth £12.3m. The lab will open in 2017 and is the main feature of a £25m investment in a 'student learning zone' on the Loughborough campus.