Structural steelwork specialist Taziker Industrial Ltd has posted a pre-tax loss despite an 18 per cent increase in turnover, its latest annual accounts have shown.
Revenue for the year ending 31 March 2023 reached £87m compared with £73.5m the year before. Company directors attributed this increase partly to more work from Network Rail and UK highways clients.
However, pre-tax profit collapsed from £5.1m last year to a loss of £1.3m, delivering a negative margin of 1.5 per cent compared with 7 per cent in 2021/22.
Chorley-headquartered Taziker was the eighth-largest steel firm by revenue in Construction News’ Specialists Index last year.
In his strategic report accompanying the accounts, chief executive Neil Harrison said the loss was caused by labour and materials inflation, UK rail strikes, and supply-chain disruption related to the Russian full-scale invasion of Ukraine.
Harrison also blamed “a number of loss-making contracts” plus the effects of Taziker’s diversification strategy into the energy and industrial sectors, including overseas markets.
“This is something the board has addressed within FY24 [the current financial year] to refocus the business on its core work and drive margin improvement to the levels seen in previous years,” he added.
The company was restructured in October 2023. A cost-savings plan was introduced and changes were made at board level. Harrison said the new-look board anticipated “the full benefits” from this strategic review to flow into the firm’s 2025 fiscal year.
Savings from the cost-reduction plan “have predominantly been realised from December 2023 onwards”, Taziker noted in its accounts.
The contractor improved its cash position to £5.9m compared with £884,000 in 2021/22. There were no repayable short-term or long-term bank loans.
Taziker employed a monthly average of 473 staff in 2022/23, marking a 29 per cent increase on its headcount of 366 the year before.
No dividends were paid out.
Looking ahead, Taziker’s directors identified the limited availability of labour, industrial action and high interest rates, as well as the “high inflationary environment and its impact on material costs and availability”, as the principal risk factors for the business in the near term.
“These matters have posed challenges in the current financial year and are expected to continue for the foreseeable future,” Harrison said, adding that the order book was “encouraging”.
Taziker has secured about 70 per cent of its forecast orders for 2024/25 “with a number of government and blue-chip customers across different geographical areas and market segments, including framework contracts”, the accounts added.
The firm predicted that revenue will fall in 2023/24 and 2024/25 due to “cautious assumptions” from its directors. However, the directors also believe the business with return to profitability in 2024/25.
