Housebuilder Durkan Holdings posts fall in profits

A number of loss-making contracts left profits at Irish-linked British housebuilder Durkan Holdings trailing by almost 66 per cent at £962,000 last year, according to new figures.

Turnover at Durkan Holdings Ltd dipped to £98.5 million in the 12 months to January 31st from £99.7 million the previous year. Its operations generated a surplus of £1.36 million in 2014, more than 20 per cent less than the £1.87 million it recorded in 2013.

Retained profit for the 2014 financial year was £962,586, a little over one third of the £2.7 million it earned 12 months previously. Executive chairman Daniel Durkan blamed the fall on a "number of loss-making contracts which have now been completed".

The company plans to enter the Republic's housebuilding market and recently established a subsidiary here, Durkan Estates Clonskeagh Ltd.

Challenges

In his report, Mr Durkan notes that Durkan Holdings is facing challenges in Britain, with costs rising as a result of the resurgence in the office and residential markets in London and southeast England. He says its construction business is taking a selective approach when assessing tender opportunities.

“Operating margins remain at around 2 per cent with cash continuing to be managed closely,” he says. “The order book of secured or probable work stands at approximately £375 million, the turnover forecast for the current year is expected to be £170 million and 75 per cent of the forecast revenue for the year to January 31st, 2016 is secured to date.”

Cash flows

The group had strong cash flows and at January 31st this year had balances of £16.2 million, down from £19.2 million 12 months earlier. It had no bank loans, as it uses its own capital to fund its activities, although it has facilities available to it for forthcoming developments.

Durkan Holdings has no connection with Durkan New Homes, the residential builder which has had some of its assets placed in receivership.