Clegg Construction has posted a £3.1m pre-tax loss as “extraordinary” inflationary pressure hit its fixed-price contracts.
The firm slipped into the red despite turnover increasing by over a third to £72.8m, according to its annual report and financial statements for the year ending 31 December 2022.
The year before, it posted a pre-tax profit of more than £324,000.
The Nottingham-based contractor said trading throughout last year had been affected by external factors that had exerted unavoidable pressures on the cost of delivering contracts secured in earlier years.
“Factors included extraordinary levels of inflation on the cost of materials and labour, supply-chain failures on some contracts, and general limitations to the production capacity of the subcontract market due to high levels of trading,” it said.
However, it sounded a more positive note for the coming months, noting that more predictable trading conditions had returned from the last quarter of 2022, allowing new work to be secured and delivered profitably.
It said: “The general contracting market has remained buoyant for new enquiries and this is reflected by a strong order book of existing and secured work that has been targeted and acquired from a variety of sectors including defence, education, leisure, accommodation and healthcare trading through 2024 and into 2025.”
Clegg recorded cash at bank and in hand of just over £2m for 2022, compared with almost £4m the previous year.
Directors’ remuneration rose to £379,883, with the highest-paid director receiving £146,097, up from £129,075 the year before.
Across the Clegg Group as a whole, the construction arm’s performance was partially offset by record trading in its food-projects division, resulting in an overall pre-tax profit of £1.5m, down from £1.8m the year before.