Esh Group has said it is “confident” of boosting its margin this year despite grappling with wider industry challenges.
The Durham-based contractor delivered an upbeat assessment of its prospects after reporting a pre-tax profit of £5m for the 12 months to 31 December 2024, up from £3.1m the year before.
Esh’s group turnover – excluding joint-venture revenue – rose by 1.8 per cent to £265.2m. This resulted in a pre-tax profit margin of 1.9 per cent, up from 1.2 per cent.
In its full-year audited accounts, shared exclusively with Construction News, Esh said: “Whilst the broader industry continues to grapple with the challenges that have prevailed during 2024, the board has a high degree of confidence for both volume and margin expansion for our group during 2025.”
Esh said its confidence was based on what it called a “record order book” that included “visibility” on contracts worth “over £2bn”.
Cash at hand more than doubled from £16.9m to £35.7m, and the firm held no bank loans or overdrafts.
No dividends were paid out.
The firm said it had closed out the “vast majority” of its contracts in the first half of 2024 that had been impacted by “aggressive” cost inflation over the previous two years.
Esh works across civil engineering, housebuilding and general construction. Its clients include councils, utility and environmental companies, affordable housing providers and the private housing sector.
While the government is investing £39bn in affordable housing, Esh warned that development in this sector “remains in a state of flux”.
The firm’s accounts said: “Burgeoning demand for social housing is placing huge pressure on the system yet it remains a paradox, with funding constraints prevailing due to the ‘wait and see’ position at [the government’s housing agency] Homes England, compounded by higher build costs, limited availability of viable land, and the ongoing misery of the planning and regulatory system, all conspiring to make delivering new housing stock very challenging.”
Long term, however, Esh said the affordable housing market had “very strong fundamentals”.
Commenting on the private housing market, the firm said “planning constraints, land availability, regulatory challenges and mortgage lending criteria are likely to apply the necessary level of restraint on the market to ensure demand is matched appropriately with supply, leading to what ought to be reasonably comfortable medium- to long-term market dynamics”.
The government is pushing through planning reforms as part of its aim to help the development of 1.5 million new homes by the end of the decade.
In utilities and environmental services, Esh said the sector was “poised for significant growth” fuelled by a “climate change-oriented need for improved flood and water management systems […] and the burgeoning need to upgrade the country’s largely Victorian-era wastewater networks”.
Already this year, Esh has secured an eight-year repair and maintenance framework deal with Northumbrian Water worth up to £160m, which it bagged in June.
Esh said: “We have designed the business to target resilient segments of the market that demonstrate robust long-term demand characteristics, have preferential client profiles and operate under favourable contract conditions.”
The group reported it employed a monthly average of 765 staff at the end of 2024, up from 723 the year before.
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