MAXI Caledonian, the construction and haulage group, has reported a fall in profits after facing rising costs in its most recent financial year.
The Irvine-registered company, which employs 350 staff, cited the rising cost of fuel, shipping, tyres and vehicles as it posted group profits of £1.59 million for the year ended September 30, down from £2.6m.
The fall in profits came as the firm, which also has a warehousing business, increased turnover to £74.2m from £65.2m.
Maxi Haulage, the group’s biggest division by profits and turnover, saw revenue climb to £62.3m from £56.2m. However, cost increases meant profits dipped to £1.35m from £2.3m.
The company invested £3.5m in its haulage fleet throughout the year, and now has around 650 trailers in the group.
Gerry Atkinson, chairman of Maxi Caledonian, said the haulage division has been able to recover costs in the current year, despite competitive conditions, and is enjoying strong trading in Ireland.
“The Irish market is particularly strong just at the minute,” he said. “Ireland is booming. For whatever reason, the Republic of Irish market is very busy, they are obviously doing very well over there. We supply that market quite heavily.”
Recent weeks have seen several Scottish construction companies fail as conditions remain weak across the sector.
Rutherglen-based MMPS (Scotland) went into administration on Wednesday, putting 36 jobs at risk. That came after 287 jobs were lost with the collapse of Crummock, which had worked on the Edinburgh Trams project.
Maxi said turnover at it construction division returned to its expected levels of £11.4m, rising from £8.6m, although its pre-tax profits dipped to £353,000 from £419,977.
Asked for his views on the difficulties playing out across the sector, Mr Atkinson suggested that some companies had suffered from pricing work too cheaply.
“The problems is, a lot of people do good prices and then go bust,” he said.
“My background is construction, and we have always followed a policy that we don’t take work if we can’t make a profit out of it. That has made our turnover go up and down quite a lot, but we have never had a year where haven’t made money.
“What is happening is a lot of companies take cut-price work on to get turnover, then after a few years they are in trouble, because they hope to get better turnover than they do get.”
Mr Atkinson said Maxi “never overvalues work in progress – that is usually the main reason they go [under]. There are other reasons, but it is usually that they are working at a loss.”
He added: “Maxi Construction has cash in the bank, it never takes work on if it does not believe it to be profitable. That way you stay in business.”
Maxi’s construction division is trading well in the current year, with Mr Atkinson noting that it has won bigger and higher-value jobs, which should see it increase turnover. However, he said conditions continue to be competitive.
“Construction is up and down,” he said. “Local authority work, government work comes in and then it [goes] but we have a lot of private sector work.
“This year there has been a good number of awards.”
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