Firm fights to beat recession blues
Northstone (NI), formerly known as Farrans, is one of Northern Ireland's largest building and civil engineering contractors.
It trades as a wholly owned subsidiary of Cement Roadstone Holdings PLC (CRH), registered in Dublin.
In addition to contracts in building and civil engineering, 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 since 2007 reflect the impact of the emerging recession in the construction sector and this firm in particular. Annual turnover peaked in 2009 after earlier increases but in 2010, turnover fell to the level of five years ago. Employment numbers also peaked in 2009 and then fell to a lower average of 971 people in 2010. The company report on 2010 describes market conditions as very challenging, particularly in Northern Ireland.
Capacity was seen as far exceeding demand with the result that material prices were falling but input costs were increasing.
The company was working on several key infrastructure projects in Scotland. During recent years there was increasing pressure on 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. Pre-tax profit also peaked in 2007 at over £20m.
More recently, pre-tax profits are less than half the 2007 figure. When retained profits are added to the balance sheet value of shareholders funds, the total value of shareholders funds has remained at about £78m in the last three years.