Hull Engineering Firm Navigates Challenging Year with Confidence
Hull-based Spencer Engineering Group has reported a significant pre-tax loss for its latest financial year, a result largely driven by a substantial impairment charge linked to a local green energy project. Despite this setback, the globally recognised firm is projecting strong future growth, pointing to a robust underlying performance and a notable increase in both turnover and its order book.
Financial Performance and the Energy Works Impact
Financial reports for the year ending March 2025 show that Spencer Group swung to a pre-tax loss of £4.3m. This was primarily due to a £5.1m impairment hit on loans extended to the parent company of the £200m Energy Works waste-to-energy facility on Cleveland Street in Hull.
The Energy Works plant has faced multiple operational difficulties, leading to underuse and a temporary closure. The site was sold earlier this year to construction materials firm Ashcourt Group, which has reportedly expressed intentions to restart operations in the coming year. This transaction drastically reduced the value of Spencer Group's minority stake in the venture.
However, management was quick to emphasise that this impairment is a one-off, non-cash accounting adjustment. Crucially, the company's operational health remains strong. Operating profits before exceptional items actually rose from £979,000 to £1.38m.
Strong Underlying Growth and Future Prospects
Beyond the one-off charge, the company's core business demonstrated impressive resilience. The firm, which employs over 300 people from its One Humber Quays base, saw its turnover increase by 15% to £70m.
This growth is attributed to success in securing and delivering high-value, multi-disciplinary engineering projects. Spencer Group has been involved in several high-profile infrastructure works, including the reconstruction of the historic Union Chain Bridge, the renovation of the Menai Suspension Bridge in Wales, and a role in the £1bn construction of the Pattullo Bridge in Canada.
Charlie Spencer OBE, founder and executive chairman of Spencer Group, stated: "These results highlight the continued strength and resilience of our business. While the impairment charge related to a historic investment has impacted our statutory profit, it is a non-recurring accounting adjustment with no cash consequence. Our operations remain robustly profitable, cash generative and well-positioned for sustained growth."
Looking ahead, the company is entering its 2025-26 financial year with significant momentum. It has already secured £83m worth of work and has a future pipeline of opportunities estimated at around £300m. This positive outlook, combined with its strengthened cash position and boosted order book, underpins the management's confidence for the years to come.
