A Higgins project in the London Borough of Hillingdon
Profit and revenue have both dropped at Higgins Group amid a big increase in remediation costs and a redundancy programme.
Newly released accounts for the Essex-headquartered contractor, covering the year to 31 July 2023, show that revenue fell to £171.9m from £215.9m in the previous year, which it blamed partly on pauses in new scheme starts.
The firm again posted a pre-tax loss of £25.8m for the period, deepening its loss from £5.4m in 2022.
Higgins finance director Mark Francis said in the accounts that both revenue and profit were hit by built-cost inflation and increased “project viability issues” that created “volatile market conditions and uncertainty among partners, ultimately leading to project delays and deterioration of profit”.
Total provisions for the year stood at £19m, with £13.5m of that due to planned remediation work needed to meet post-Grenfell building regulations.
The accounts also detail a claim received by the residential-focused company, relating to facade materials on an unnamed completed job. The firm said that it hopes to either defend the claim or recover through the supply chain, so it had not estimated a figure for its potential costs.
In June last year, Higgins announced a restructure, job cuts, and the retirement of its chairman and director. Brothers Declan and Dominic Higgins became chief executive and chief operating officer respectively, while their cousin William Higgins became group executive director.
All three are grandsons of Derek Higgins, who founded the business in 1961.
Francis said in the new accounts that the restructure meant its partnerships business was segmented into regions, “resulting in a significant improvement in operational efficiency while providing a strong platform for growth”.
He added: “A provision has been made within the financial statements for the costs associated with the restructuring. The business will reap the benefit of the restructure in our current financial year.”
The accounts show that £1.2m was spent on redundancy payments in the period covered. The number of jobs lost is not detailed.
Higgins’ average monthly staff numbers throughout the year stood at 346, up from 318 the year before. The job cuts were announced in late June so would not have had a significant affect on the monthly average stated in the accounts.