Robertson Group yesterday said achieving “sustained higher profitability” was its immediate priority ahead of pursuing plans for a stock market flotation.
The Stirling headquartered infrastructure, support services and construction group revealed a 13% increase in turnover to £261.3 million and pre-tax profits of £34.6m for the year to March, a major turnaround from the £3.72m loss it posted a year earlier.
However, the result was lifted by proceeds from the sale of a portfolio of investments, and the group’s 14 operating companies actually produced a gross profit for the year of £18.6m.
“The profit before tax (figure) includes the gain on the sale of long-term maturing investments held in the business and producing a total profit of £44m, reflecting the gain from the release of profits created over the life of the investments and held within the business but not realised,” chairman Bill Robertson said.
“The net effect of profits released has seen the business increase the balance sheet to £63.3m.
“In the pre-recession market, where banks were of a different profile, our preference was to hold these investments, which generated profitable cash flow whilst the investments matured.
“Following the challenges being faced by the banking sector, these sales were implemented in order to release cash and profits to the balance sheet of the group, eliminate borrowings and to strengthen our trading picture in a difficult market, allowing our transitional plan to be maintained.”
Robertson employs a total of 1,300 staff and its construction arm which comprises four regional Scottish firms and a further two in England was the biggest single unit in the group during the last year, contributing revenues in the region of £190m and an 11% uplift in profitability.
The facilities management business generated £34m in turnover in the period while the homes operation, which pre-recession generated more than 50% of group pre-tax profits, generated a further £20m.
Mr Robertson said the group involved in a number of high-profile contracts in Tayside including the construction of Dundee’s new Harris and Baldragon secondary schools, and the creation of a £26.5m community campus replacement for Brechin High School had continued to progress in recent months.
However, he said the company would be targeting higher-margin work going forward, and the timing of a move to establish a stock market listing would depend on achieving sustained, higher profitability levels.
“Our profit before tax budget for the current year is £10m from trading activities and we are on track to achieve it,” Mr Robertson said.
“That will then see the business back on track and producing profits closer to pre-recession levels.
“This will have been a really challenging exercise but one worth doing,” he added.
“We are, however, of the firm opinion that once the UK funding market settles, funders will be attracted to our sector, albeit they would expect to see players in our market produce profit levels which balance with our risk profile.
“Our objective now is to select higher-value projects to improve the profitability of the business.”