Builders' merchant James Burrell says it continues to battle tough conditions in the construction market but is determined to bounce back, after closing two sites and shedding more than 35 jobs between 2024 and 2025.
Turnover rises but profits remain under pressure
The North East-based group, which also has branches in Yorkshire, saw turnover increase from £95.1m to £96.3m in the year to the end of October, according to newly published accounts. The company returned to an operating profit of more than £566,000, having posted an operating loss of more than £1.1m the year before. Pre-tax losses over the same period narrowed from £2.06m to £486,789.
Managing director Mark Richardson said: "The anticipated recovery across the construction sector following a sharp decline in 2023, has yet to materialise. The cost-of-living effects are still prevalent across society and UK businesses are still having to deal with elevated inflationary and interest rate effects."
Tough decisions for family-owned firm
Richardson added: "For a multi-generational family owned and managed business, who recognises its people as its biggest asset, this has meant tough decisions have been necessary to balance the conflicting priorities of maintaining an acceptable financial performance, whilst supporting the employee base who serve the business so faithfully."
The firm said the challenging trading conditions of the last three years showed no signs of abating in 2026, and that despite inflation having eased, interest rates remain high and economic growth was stagnant. Bosses expressed disappointment in the trading performance despite the small improvements reported, but said the firm remained resilient and "determined to bounce back" when demand recovers.
Sluggish housebuilding activity a key factor
One of the key factors contributing to those tough trading conditions has been sluggish housebuilding activity. Richardson said regular government pledges to encourage the building of new homes had failed to come good, pointing to problems associated with higher interest levels, delays in the planning system, a lack of help-to-buy type incentives and red tape facing developers.
He added: "Although we are not where we want to be, there is a feeling that we are moving back in the right direction again. We are faced with a higher cost threshold than we have previously been used to after recent material price inflation, tax rises and increases in the living wage. But we have made the necessary adjustment to right-size the business accordingly, stripping out nonessential costs and process inefficiencies, aided by the implementation of our new IT system."
Outlook: improvement ahead
Richardson concluded: "Despite our marketplace remaining subdued and uncertainty continuing to cloud the present position, we believe there will be improvement ahead. Our strong financial base and continued reinvestment in the business should ensure that James Burrell will continue to prosper and to take advantage of new opportunities as and when they arise."
