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Newcastle’s Northern Bear reveals acquisition ambitions

Newcastle-based construction group Northern Bear plc has revealed an interest in pursuing new acquisition opportunities, moving away from its strategy of reducing bank debt levels in recent years to setting its sights on commercial leads.

The stance comes as the firm reported a healthy set of financials this morning, with slight declines in some areas, releasing its unaudited interim results for the six months to 30 September 2015.

Pretax profit remained steady at £0.9m, no change on last year. The firm attributed a revenue decrease to £19.6m, down from £20.1m in 2014, to delays in commencing work on a major roofing contract due to factors outside of its control.

Steve Roberts, Executive Chairman, said: “We have continued to keep a careful control of costs across the Group and have made a number of savings in the period through operational efficiencies.”

Mr Roberts paid credit to the group’s roofing companies, its mainstream specialist building services and its materials handling business, A1 Industrial Trucks, for securing ‘high quality work’, performing well and exceeding expectations.

Acquisition opportunities

Steve explained: “Having used operating cash flow to reduce bank debt levels in recent years, the Group is now well placed to take advantage of both strategic and commercial opportunities as and when they arise.

“I am pleased to say that we are being presented with a number of acquisition opportunities at present and, whilst we will be cautious in our use of shareholders’ funds in this area, I believe that making a small number of bolt-on acquisitions of specialist building services businesses could enhance the Group’s service offering to customers and provide an attractive return on investment.

“We would seek to use existing cash resources to fund small acquisitions but, should an outstanding opportunity to purchase a larger business arise, we would seek to raise a mix of external debt and equity.

“The Group has a stronger order book than has previously been the case at this time of year and there are encouraging signs of tender activity for all Group companies. We are cautiously optimistic for a successful second half to the financial year.”

The Executive Chairman also paid tribute to Northern Bear staff, adding: “I am proud to say that the Group directly employs the large majority of its workforce and has continued to invest in training new operatives throughout difficult economic times.

“Having a loyal, dedicated and skilled workforce is increasingly paying dividends in a sector where labour shortages and cost pressures are impacting operators of all sizes.”

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