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Construction group Northern Bear hails performance amid inflation and supply headwinds

Newcastle construction group Northern Bear has hailed a positive first half performance, in the face of strong headwinds from inflation and supply and staffing issues.

The AIM-listed group of companies, which provide specialist building and support services, updated shareholders on trading for the six months ended September 30, saying it expects to report operating profit which will be an increase on the pre-pandemic figure at the start of last year.

It also highlighted a strong order book to support its continuing performance.

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The update comes four months after the publication of its annual report and accounts, in which it noted industry-wide challenges in terms of both availability and price inflation of construction materials.

It said: “There have also been well-publicised challenges in relation to attracting and retaining employees in the construction industry.

“We have always sought to create long-term value via strong relationships with all of our group’s key stakeholders. Our companies have strong and well-established supplier relationships and have been able, on the whole, to work with our robust supply chain to ensure continuity of supply for contracts.

“We have also managed to retain the large majority of our loyal and high quality workforce, despite the ongoing industry staffing issues.”

Despite the impact of headwinds on the Prestwick Park-based business, it said operations traded well in H1 FY22 and it expects to report operating profit in the range of £1.4m to £1.5m, an increase on the pre-Covid comparative from H1 FY20 of £1.4m. As at September 30 2021, the Group had a net cash position of £600,000.

It said the strong forward order book should support its trading performance in the coming months, subject to the ongoing supply chain and staffing challenges, as well as a level of uncertainty over the long-term outlook for Covid-19.

Jeff Baryshnik, chairman of Northern Bear, said: “We are pleased to announce strong expected operating results for H1 FY22, despite ongoing industry-wide challenges.

“It is a testament to the executive team and subsidiary operating teams that H1 FY22 results are expected to exceed those from the comparable pre-pandemic period of H1 FY20.

“With a strong forward order book, we are well positioned to continue to generate a more normalised level of profitability.”



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