Last updated 9 January 2023
Esh Holdings
Esh Holdings is a privately-owned construction group based in north east England with activities ranging from housebuilding to civil engineering and building maintenance. The group was founded in 1999 after civil engineering and building contractor Lumsden & Carroll merged with Deerness Fencing, which also owned housebuilder Dunelm, and now turns over £280 million a year and employs more than 700 employees.
Financials
Turnover at Esh Holdings fell in 2017 and 2018, when the group slumped into the red and pushed through the first of two restructures that brought a rebound, but the impact of the Covid-19 pandemic plunged the group into the red again.
In 2021, recovered again and reached £278.0 million (2020: £236.0 million) and the group returned to the black. At an operating level, Esh made a profit of just under £4.0 million (2020: £4.0 million loss). Before tax, the group recorded a profit of £3.0 million (2020: £5.9 million loss).
To view the financials for Esh Holdings Ltd, visit Companies House and use Company ID 03724890.
Operations
Esh works in North East England, the Tees Valley and Yorkshire and the Humber out of offices at Bowburn near Durham and Swillington in Leeds. Esh operates three divisions.
Civil Engineering
This division includes Esh Civils, Lumsden & Carroll and the Esh-Stantec joint venture and works for the Environment Agency, Northumbrian Water and local authorities such as Sunderland City Council. Esh works on major flagship projects such as a £41.4 million repair scheme on the Tyne Bridge (Project ID: 19206202) and is on long-term, agreements such as the £180 million YORCivil3 framework (Project ID: 21338394). The group consolidates all construction activities together and in 2021 turnover rose to £181.6 million (2020: £151.3 million).
Living, Build & Facilities Management
The group’s clients range from local authorities in Lincoln and Sunderland, to housebuilders and developers such as Persimmon and Union Property Services to housing associations such as Broadacres.
Esh subsidiaries have places on a number of long-term agreements, particularly in the social housing sector. These range from a £150 enhanced capital delivery programme for Thirteen Housing (Project ID: 21507363) to Places for People’s £500 million Whole House Contractors framework (Project ID: 16320746).
Esh Property Services focuses on the social housing sector and includes the former Dunelm Property Services operation. Other clients include West Yorkshire Police and the University of Leeds. Property services turnover at Esh virtually doubled in 2014 only to fall away again in the next two years before recovering. In 2021, turnover fell back once more to £55.7 million (2020: £60.8 million).
Private Housing
In 2017, Esh started winding down Trivselhus and the focus moved to building traditionally-built housing. Homes are no longer built by Esh Construction and work is procured independently with land sourced from the development business. In 2021, turnover from housing and rose for a second consecutive year to £17.1 million (2020: £10.5 million).
Glenigan Data
In 2022, the contracting subsidiaries at Esh won contracts totalling £234.1 million (2021: £118.7 million) and the group was returned to Glenigan’s ranking of the industry’s top 50 contractors in 42nd place (2021: 60thplace)
Glenigan’s research also showed that Esh did not submit any detailed planning applications to build new homes in 2022.
Conclusion: Ready for the rebound
Glenigan’s data shows the order book more than doubling in 2022, driven by an expansion in building work. This rise was achieved through taking on larger contracts, which increase the risk profile as larger projects are inherently riskier. In 2021, the average contract won by Esh more than doubled to £10.6 million (2021: £4.1 million).
In 2022, building work more than doubled to £186.2 million (2020: £84.9 million), while the civil engineering order book increased by 42% to £47.9 million (2021: £33.8 million). As a result, 79% of the order book by value was building and the balance in civil engineering (2021: 71% building/29% civil engineering).
The bulk of the group’s workload in in Esh’s native North East, where the group has gained market share. In 2022, Esh’s order book in the region totalled £223.9 million (2021: £93.1 million) and the group had amassed the largest order book in the region to top Glenigan’s Top 10 for the North East (2020: Fourth).
Although the group’s own planning programme has stopped, Esh has a strong track record in housing and in 2021 managed to pass on all the extra cost inflation onto sales prices. Increases in labour and material costs are likely to impact on the 2022 accounts but having taken remedial action previously the groupo is in a far better financial position.
By the management’s own admission, Esh grew too quickly. Growing pains began to emerge in 2017 and a painful restructure cut the number of operating divisions from 17 to just six and non-core operations were exited to simplify the business. Then in 2019 the number of divisions halved to just three, operations in North West England and Scotland were closed at a cost of £2.8 million and the MechPlant business was sold to its management.
After another year of transition in 2019, the group was in a stronger position before the unexpected onset of the Covid-19 pandemic as the cost base had been trimmed. In 2021, the workforce was reduced by another 9% to an average of 765 people (2020: 835 people). This cut the wage bill by another 7% to £33.0 million (2020: £35.5 million
The impact of Covid-19 cost the group £3 million in 2020, but the group remains debt free. Net cash from operating activities increased to £6.6 million (2020: £4.7 million deficit) and cash at hand strengthened to £20.8 million (2020: £15.3 million)
As the dominant contractor in the North east, a pared down Esh Group is in a better position as the industry copes with difficulties in the wider economy.
Winning Work With Esh Group
Esh has achieved accreditation to ISO 50001 Energy Management tariff in July 2013. The group’s subsidiaries are accredited to a number of industry bodies, including Achilles, CHAS, Constructionline, the Considerate Constructors scheme and the Royal Society for the Prevention of Accidents. Esh Group has also been a member of the Business in the Community scheme since 2004 and operates a ‘buy local’ strategy. Esh Construction strives to source materials sustainably.
Esh Group has 2,000 supply chain partners and aims to take a collaborative approach with suppliers and sub-contractors and works to an Added Value Wheel, which focuses on four key areas: workplace, environment, marketplace, and community. Esh uses Meet the Buyer events and has also taken advice on procurement-related issues from the Northern Procurement Group. Details on the group’s supply chain can be found here.
Key Esh Group procurement contacts include:
Senior estimator at Esh Group – Derek Stothard, tel: 0191-377-4570
Head of retrofit solutions – Lisa Stafford, tel: 0191-377-4570