By Scott Wright

PAISLEY-based Clark Contracts has turned over £100 million for first time in its near 45 year history as the construction company underlined its recovery from the disruption sparked by the pandemic, but warned it continues to wade through high raw material costs.

Accounts set to be audited will show the company reached the turnover landmark for the year to October 2022. Clark had originally been on track to reach the figure before Covid struck and a 13-week shutdown ensued in 2020. It ultimately turned over £65.5m for the year to October 2020 and then £82.6m a year later, with the new accounts poised to show turnover had topped £100m for the first time.

Managing director Gordon Cunningham said the recovery has come as the company has faced numerous unforeseen challenges that followed the easing of Covid restrictions, including labour shortages and a sharp rise in cost-price inflation amid disruption to global supply chains.

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The latter was caused in part by the “havoc” created by the blockage of the Suez Canal for six days in March 2021 after the giant Ever Given container ship ran aground, while in more recent months costs have risen in the wake of Russia’s full-scale war on Ukraine.

Mr Cunningham said: “It never felt easy before. It never felt predictable before. The thing about it is the industry has always had to be flexible and is used to coping with change. The general consensus is that for most of this year we will be in recession but we are [active] in most sectors.

“That has developed over the years. There is probably not a sector that we are not in. Both from a public or private [sector perspective] there is not a type of project we can’t do or haven’t done. That should help us in a challenging market.”

Clark Contracts, which was established in 1978, is the umbrella under which six discrete divisions operate. Activity ranges from construction and refurbishment to maintenance and manufactured joinery. The company, which has around 240 staff, runs its own academy to help it cultivate the personnel and skills its requires. Entrants to the academy are mentored and are often put through college or university.

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Mr Cunningham said Clark was currently busy in the university sector.

The company is currently on site with 10 different projects across the universities of Glasgow, Strathclyde, and Edinburgh through public sector procurement frameworks.

Mr Cunningham highlighted Clark’s activity in the industrial sector, which has slowed to some degree after a boom period during lockdown when demand for e-commerce fulfilment operations soared. And he predicted a rise in office refurbishment work, as property owners invest to upgrade their buildings, partly to reduce their environmental impact.

Mr Cunningham said refurbishment work has remained a cornerstone of Clark since it was established, and generates about £40m of its £100m turnover.

He also noted there had been a resurgence of student accommodation development since Covid eased. Clark has now delivered around 800 beds and there are further projects in the pipeline. But Mr Cunningham said several projects stalled because construction costs became too high.

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Asked if there was any sign of cost pressures easing, Mr Cunningham said: “It is definitely stabilising, but it does take a while to filter through. I read that over 65 per cent of materials in UK construction come from the UK, but the majority of the components or the raw materials for that come from abroad. So, you’ve got the Brexit [effect] and the energy crisis built into the base price of materials. But then you have still got the cost of labour which isn’t going down in manufacturing or anything.”

Mr Cunningham expressed hope that the company could make a significant breakthrough in the housing market, despite the current challenges in the sector. He said: “We want to be in it, so that when it comes around again, stabilises and grows again in a few years [we can take advantage]. That is another thing we are trying to develop.”

Clark is now well into its 2022/ 2023 financial year and forecasts that it will at least match last year’s showing.

Asked to comment on profits, Mr Cunningham noted that “they are recovering” after being affected in recent years by cost inflation. He said profits improved in the most recent financial year but it could be 2024 before they return to pre-Covid levels.

Mr Cunningham noted that the company is approached frequently by firms looking to sell, but to date has not made any acquisitions. He said the firm is “wary” of diverting its focus, though said it may be open to acquiring in the housing market as part of expansion hopes in this area.

Mr Cunningham said Clark is also open to building a presence in the north-west of England, which had been “on the cards” before the pandemic struck.