HE Simm's Engineering Division Eyes Immediate Return To Profit

The Engineering Division of HE Simm (HE Simm & Son Ltd), is forecasting a strong end to 2024 after reporting a difficult financial performance for the period ending 31 December 2023.

Whilst the business recorded a loss before taxation of £10.3m (2022: profit £0.9m), a swiftly implemented and newly focused strategy, as well as a capital injection by the Simm family, has meant an immediate return to profitability.

Impacted by high inflationary pressures on fixed price contracts, the company also faced issues from a number of legacy projects in London which accounted for the majority of the total reported loss. A strategic restructuring of the business has since led to a streamlining of management structures and reporting processes together with a new selective approach to tendering.

Revenue for the period was £118.3m (2022: £54.2) and the orderbook remains strong at £150m with a healthy number of opportunities in the pipeline and several major projects due to be completed this year. The business remains free of bank debt.

Gareth Simm, Chief Executive Officer and one of the Grandsons of the founder, commented: “This has undoubtedly been one of the most difficult trading periods in our history. Rigorous management reviews have been undertaken to ensure any operational performance issues have been recognised."

“Our review has reaffirmed that our focus needs to be on key - trusted - client and supply chain relationships, risk management and profitability in sectors where we have a competitive advantage and a proven track-record."

“We have implemented a newly focused corporate strategy to ensure a strong foundation is in place that is aligned to a return to profitability and excellence in project delivery."

“The actions we have taken during the reporting period, which was extended to 17 months to accommodate the strategic restructuring, mean that we are already forecasting a return to profitability for the current financial year with operating margins that have recovered to an acceptable level.”