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Chief executive Jonathan Seddon stated: “House sales remained robust and, while this year will see a dip in unit numbers, Seddon’s land acquisitions in 2018 will boost the pipeline significantly over the coming years.”
This land will be used for both residential and commercial purposes, and will serve to help the construction group balance its portfolio between contracting and developing.
He stated that last year Seddon Group began to see positive results from diversifying the business. There was an “increased focus on the property services and maintenance sector, which helped to de-risk the portfolio workload”, Mr Seddon remarked.
Plans to continue the business strategy throughout this year and the future has seen the company acquire SP Smith Electrical Contractors.
Its focus on the property construction sector could be the reason why it saw pre-tax profits increase by four per cent to £5.3 million last year from £5.1 million in 2016. This is despite overall revenue remaining steady at £205 million in 2017, the Construction Enquirer reported.
It now intends to use its cash reserves of £18.6 million to pay for these land acquisitions, with the hope that they will benefit from continually increasing revenue from house sales.
Indeed, despite transaction levels dropping from 261 to 231 units in 2017, Seddon Group managed to increase its revenue within this division by £4 million, reaching a total of £49.1 million for the year. This resulted in a pre-tax profit boost from residential developments alone from £2.6 million to £3.4 million.
While delays in completions subdued the market, rising profits are thought to have been the result of changing the type of houses it constructs and growing house prices in the region.
As part of its business development plan, it has already bid and won contracts on the Procure North West public sector framework worth £2 billion, and Scrape’s Regional Construction £1.1 billion framework.
The former project will see Seddon help deliver public-sector projects, such as for NHS Primary Care Trusts, Higher Education Institutions, emergency services and local authorities across Greater Manchester, Cheshire, Merseyside, Lancashire and Cumbria until 2022.
Property services director at the company John Shannon stated that the group “look forward to supporting some of the region’s key infrastructure projects over the coming years and playing an important role in delivering high-quality projects within the communities we serve”.
It has also started working on a £7.5 million residential development in Wednesbury, Staffordshire, to build 50 new local authority homes, together with Sandwell Council.
If Seddon Group’s plans to invest more in large-scale house building and public sector projects go ahead, they will need reliable scaffolding contractors in Sheffield that are respected across the industry and can deliver on big jobs like re-developments.
