THE GREAT thing about big infrastructure projects is that when you win a role on one it is liable to be both lucrative and long term.
The bad thing is that when they dry up the work is incredibly difficult to replace.
Perth-based family business I&H Brown, which in 2015/16 derived 97 per cent of its overall revenues from civil engineering work, is finding this out to its cost, with the Scottish Government’s decision to stop subsidising the onshore wind sector having a direct impact on its top line in 2016/17.
This is because many renewables companies, which I&H Brown provides construction services to, have decided that remaining in the market simply isn’t viable without an injection of public cash.
As a result the firm’s turnover fell by 25 per cent in the last financial year while its pre-tax profits, which were artificially inflated by a property revaluation in the previous year, fell by 65 per cent.
Yet having started out as a plant hire firm, I&H Brown has always had other interests, meaning it was insulated somewhat from the worst of the renewables downturn.
Expanding into England just over a decade ago, though difficult to justify at first, is also looking like an ever-sounder move.
We all know the saying about the downside of keeping every egg in just one basket. Though it is being forced to reduce its cost base – for which read headcount – as a result of its revenue slide, if I&H Brown hadn’t taken heed of that advice the outcome for the firm could have been a whole lot worse.
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