Revenue and profits are up at Nottinghamshire based North Midland Construction PLC, a UK provider of civil engineering, building, mechanical and electrical services to public and private organisations, despite the challenging economic climate and the severe weather conditions experienced at both the start and the end of the year.  

The news comes as the company announces its preliminary results for the year ended 31 December 2010. They reveal that revenue increased by 14.1% to £164.5 million and profit before exceptional items and tax by 17.9% to £3.71 million, both in excess of the forecast and that of the previous year.  

The civil engineering division, and particularly its sub-division NMC/Nomenca that was formed to service the AMP5 framework for Severn Trent Water, delivered an enhanced performance with revenue increasing by 1.2% to £51.2 million and profitability to £1.96 million. This was helped by the exceptional performance delivered on the joint venture project for Severn Trent Water at Minworth which was completed during the year and earned the company significant final bonus payments, as well as by cost reductions achieved by increased efficiency and innovation.

Outside of the water frameworks, other sectors such as power, waste and rail, remain extremely competitive and tender opportunities and repeat business remain scarce. 

The highways division successfully grew during the year on the back of increased expenditure with major local government frameworks such as Liverpool City Council and the development of new markets. Revenue increased by 32.3% to £13.5 million with profitability marginally increasing by 3.8% to £0.22 million. The division has developed a particular expertise and reputation in public realm contracts which do not seem to have been affected by public sector cutbacks. Projects of increasingly higher value are being secured and the division enters the new financial year with a healthy order book with revenue expected to exceed that of the previous year.

The high demand for broadband has meant that the telecommunications sector was particularly buoyant during the year and, as a result, NMC's utilities division has performed well. Revenue increased by 32.2% to £40.2 million and profitability by 4.1 % to £1.46 million. The major contributor to this increased revenue was the South Yorkshire Digital contract for Kcom plc. In addition in order to provide an improved customer service, an in-house cabling and jointing capability was formed and this has been particularly successful. With demand for new and improved networks likely to remain high and the division's wide ranging client base, it is well placed to capitalise upon this in the future.

North Midland Building (NMB), the company's building subsidiary, is most affected by the continuing economic downturn and, as a result, returned a loss in excess of that forecasted of £0.57 million on a revenue down by 37% to £22.0 million. Margins remain positive, but at an extremely low level, and this coupled with the low revenue has contributed to the loss. A thorough review of the business has been undertaken and further overhead reduction instigated along with a revised marketing strategy.  It now has an order book of £20 million and tender opportunities are now on the increase.  

Nomenca, NMC's mechanical and electrical subsidiary, has been particularly successful in the AMP5 tendering process for water companies across the country. However, the success did not translate into orders received during the year with the transition from the previous AMP being very slow. Revenue, therefore, declined by 12.8% to £37.6 million and profitability by 20% to £0.75 million. The problem was particularly acute in Scotland, where significant reductions in operating costs had to be introduced. Nomenca has entered the current financial year with a secured order intake of £44 million and this, coupled with the foundation of the frameworks secured, particularly in the water sector, will provide positive growth.

NMC has made huge advances in non-financial performance in recent years and the "Just Culture" initiative has driven improved health and safety and environmental performance. Overall, accidents were at an all-time low with no statutory reportable accidents since September 2009, which is a notable achievement. In recognition of this, the group has won six awards for Health & Safety and seven for Environmental Performance during the year.  

In addition the group takes its Corporate Social Responsibility (CSR) very seriously and several projects were undertaken either through Business in the Community or under its own initiative. The Investors in People accreditation was also reviewed during the year and uplifted to a silver standard.   

Brian Evans, chairman and co-founder of NMB, who was also a PLC Board member, retired at the end of the year.  

In the 2009 accounts an exceptional item was included for the potential OFT fine and associated costs of £1.594 million. An appeal was made against this and to date the result of that appeal has not been forthcoming however the first tranche of appeal decisions have just been announced and, whilst it would be presumptuous to assume that they will be replicated, they do display significant reductions in the overall fines.

"The secured order book for the current financial year is round £140 million and whilst business continues to be very challenging given the plans we have in place I am confident that we continue to make good progress," said Robert Moyle, chairman and chief executive of NMC.