CLARK Contracts has recorded another significant leap in profits in a year which saw the firm successfully diversify into residential development.

And managing director Gordon Cunningham said the flow of work is showing no signs of being disrupted by Brexit uncertainty, with orders continuing to flow from all of the firm’s key sectors, including retail and hotels.

Paisley-based Clark made a pre-tax profit of £2.2 million for the year ended October 31, up from £1.9m, accounts due to be filed at Companies House later this month reveal.

The profit hike, which followed a near-40 per cent rise in earnings the year before, came as turnover surged to a record £78.2m, having climbed from £72m last time.

Mr Cunningham said Clark, which is now in its 41st year of trading, benefited from an increase in value of contracts it worked on over the period, while also flagging the importance of diversifying into new sectors to help “insulate” the company from major political shocks such as Brexit.

It stepped up its involvement in the residential sector, and recently began work on a 54-apartment project on Bell Street in Glasgow’s Merchant City, having initially met the client one year ago.

The £7m project for Grant Stafford Borthwick is scheduled to be ready in 14 months, and Mr Cunningham raised the prospect of Clark dipping its does in financing residential developments itself.

The company is now working on its 11th store for discount supermarket Lidl and, having first moved into the hotel two years ago, is developing further Moxy Hotels in Birmingham and Southampton after a successful build in Edinburgh. The average value of a Moxy contract is £12m to £15m.

Alongside its diversification in the retail and hotel sector, Clark highlighted its continuing work with long-standing public sector clients such as the University of Glasgow, University of Edinburgh, Edinburgh Airport and Renfrewshire Council, noting that 80 per cent of the work delivered by the firm in the last five years has been for repeat customers.

Meanwhile, Mr Cunningham said the well-documented difficulties of major infrastructure players Carillion, which collapsed last year, Interserve, Kier is recent years has had a positive spin-off for sizeable regional players like Clark.

“There’s maybe a bit more confidence going with a regional main contractor,” he said, noting that the firms four-decade trading history provides a degree of reassurance for clients. “It used to be the opposite – you had to really fight very hard. [But] it is difficult to make any generalisations – we will do 80 projects a year across all the sectors.”

Mr Cunningham noted that supplier payment practices within the construction industry were now being debated at the highest political level, following the controversial collapse of Carillion and the effect it had on smaller firms in its supply chain. He said the Clark accounts for last year has brought a welcome reduction in debtor and creditor days, while cash increased.

More than 96 per cent of invoices were paid suppliers and sub-contractors within 60 days, which the firm said exceeds the 95% target set by the Prompt Payment Code.

On Brexit, Mr Cunningham is aware of speculation that international investors are currently holding back from decisions as regards activity in the UK. But the uncertainty is not affecting Clark.

He said: “There’s nothing we are actually seeing in any of our own numbers, it’s just chat we are hearing. The level of enquiries is still high, the average value is still high, people are still building and refurbishing.”

Mr Cunningham, the firm’s majority shareholder, added: “Retail is interesting, because it is obviously got a challenge on. We’re in doing quite a lot with shopping centres as they have to keep changing their offering. That’s not new-build, that’s refurbishment or fit-out. [We are] also working on quite a few drive-thru ideas.”

Retail clients include The Gyle Shopping Centre and Livingston Designer outlet, he said. “Retailers are still active - it is just that they are having to be more selective in what they do.”

The period saw Clark continue to invest heavily in developing its own talent. It invested more than £500,000 in its Training Academy during the period covered by the accounts, which could rise to as much as £700,000 in the current year, “almost one per cent of turnover”.

There are currently more than 50 apprentices and trainees on the books at Clark, which runs a masters course in partnership with Glasgow Caledonian University and has also developed an in-house leadership and management programme. It has around 260 employees overall.

Mr Cunningham said the ensuring the industry has access to people with the right attitude and skills is a bigger challenge than Brexit. However, he said Brexit could lead to a spike in wages because tighter immigration control may exacerbate the skills shortage in London, where wages are already rising, and that could it turn lead to an exodus of workers from Scotland to the UK capital.