THE south Derry Specialist Joinery Group has disclosed how the rapid rise of materials, energy and labour has impacted the north’s construction sector.
A new set of annual accounts published by the Maghera-based business show its turnover increased by 46 per cent to £33.5 million in the year to April 30 2022.
But, costs shot up by 56 per cent over the same period. It hit the group’s profit before tax by around 72 per cent, falling from £1.3m to around £356,000.
A report from its directors said: “Given the rapid increase in the rate of inflation, the year ended April 30 2022 was a difficult year as we worked our way through various legacy contracts.”
Set up in 1988 by Ardboe native John B O’Hagan, the Maghera firm has grown into a major manufacturer of bespoke joinery and fitted furniture, operating from London and Dublin.
Last year it secured planning permission for a new 29,000 sq ft factory building in south Derry.
The 12 months to April 2022 also involved a £400,000 investment in the group’s logistics and manufacturing capabilities, which the directors said enhanced its manufacturing capacity and the company’s ability to meet tight deadlines.
But the Specialist Group’s directors said: “The rapid rise of materials, energy and labour had a significant impact on our business during the year ended April 30 2022.
“While turnover increased to £33.5m, our gross profit percentage decreased from 23 per cent to 18 per cent and our operating profit fell from £1.39m to £480,000.”
Just three additional staff were recorded on its books for 2022, but staff costs for the 164 employees in the year to April 2022 increased by 13.4 per cent to £6m, well above the rate of inflation for the period covered.
A report accompanying the latest set of annual accounts also reveals how the Specialist Group has tried to curb rising energy costs.
It uses a wood waste boiler and solar panels to generate 50 per cent of electricity it uses. It’s environmental efforts in the year also saw 3,000 trees planted.
The biggest growth in the business last year was within the UK, where its turnover rose by 58 per cent. In contrast, turnover generated south of the border dropped by 53 per cent to just £1.2m.
The report, signed off by the board earlier this month, indicated the group is on course to generate around £38m in turnover in the current year, of which £18m is already delivered.
It expects to generate £42m in 2024, with £10m already secured.
