Masterson strikes gloomy note as profit plunges

Pre-tax profit at Masterson Holdings slumped last year amid reduced demand, material price increases and geopolitical conflicts.

The Hertfordshire-based construction group and parent company of concrete-frame specialist Getjar said that while its financials remained strong, its order book was down, and it was projecting lower turnover and profit for the current year.

Masterson’s latest annual report and consolidated financial statements for the year ending 31 August 2023 show that while turnover rose from £136.7m to £152.5m, pre-tax profit tumbled from £6.7m to just under £3m.

Profit margin was squeezed to 2.2 per cent, down from 4.4 per cent the year before.

The firm holds no bank loans and it had £24.6m of cash in the bank, down from the £26.9m it held the previous year.

Masterson said its fixed-price contracts had been impacted by inflationary pressures on the back of post-Covid increases in wages and material prices, as well as the supply chain effects of the outbreak of war in Ukraine.

However, it said its strong balance sheet, cash reserves and absence of borrowing, together with increased efficiency, had allowed it to maintain its focus on core activities.

“We live in uncertain times where profit margins remain challenging,” said chair Michael Masterson.

“There is also reduced demand in the industry and, despite that, we see continuing price increases in materials, labour, plant and support costs.

“Furthermore, we have the added challenges that the geopolitical climate, conflict in Ukraine, conflict in the Middle East, continuing high interest rates and slowdown in the UK economy all combine to keep investment confidence low, so caution remains the order of the day.”

Directors’ remuneration, including pensions, rose by a quarter to £5.76m, with the highest-paid director receiving £579,421.

Masterson employed a monthly average of 242 staff in 2022/23.

Interim dividends amounting to £2.4m were paid during the year, but the directors did not recommend the payment of a final dividend.

Masterson, which fell just outside last year’s CN100 list of the country’s biggest contractors, relies on concrete-frame work for over four-fifths of its turnover, with the remainder coming from carpentry fit-out contracts and plant hire.

As well as owning Construction News top 10 concrete specialist Getjar, which was founded more than 40 years ago, the group includes Atlantic Contracts and Glencoe Plant Services.

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