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Profits grow for Howarth Timber

HOWARTH Timber has seen pre-tax profits grow despite the challenges facing the construction sector.

Four of the Leeds-based group's five divisions broke even or were profitable in the year to the end of March.

That record helped the company record pre-tax profits of £1.1m, up from £900,000 in the previous 12 months, as turnover grew from £107m to £120.5m.

Howarth Timber credited the increase on a "slight improvement" in economic conditions and the benefits of cost reductions it began to put in place in 2009.

Its directors' report says: "Trading conditions remain challenging during the new financial year due to continuing industry concerns surrounding the instability of timber prices, increasing energy costs and particularly the impact of the general economic situation on the new build housing sector as public sector cuts kick in and the recovery slows, all of which are expected to continue to impact on the results of the group in the next 12 months.

"However new product innovation and strategic marketing will ensure that Howarth Timber remain profitable and sucessful."

Over the course of the year the company generated £5.6m in cash, invested £2m in capital expenditure and cut net debt from £9.3m to £6.3m.

Chairman Andrew Howarth told "Like everyone else in the construction industry we have been going through challenging times. The sector has been contracting for three years and is expected to contract further in 2012. We have had to readjust our operations to take into account the market as it is today.

"Certainly given the uncertainty that appears on the horizon for the economy as a whole, particularly taking into account what's happening with the EU at the moment, confidence is not where we would like to see it. Clearly 2012 is going to be a very challenging year.

"We believe the company is set up the right way to meet the challenges in front of it."

Howarth's timber and building supplies business, which represents almost half group turnover, grew profits from £100,000 to £700,000.

However, its timber engineering business maintained a £3.4m loss as it suffered from its exposure to the house-building trade.

Source : James Reed – The Business Desk Yorkshire

03 January 2012
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