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Construction group MGL diversfies after racking up rise in sales and profits

COUNTY Durham construction group MGL is diversifying into new areas of business after chalking up a strong year with rising profits and sales.

MGL Group has been in operation for more than 40 years and acts as a holding company for several firms including Rainton Construction and Tynedale Roadstone.

Now the firm has diversified its portfolio with the creation of MGL Cable Services, which operates in the offshore wind market, as well as boosting its green credentials by working to re-use single-use plastics in asphalt materials.

The new areas of work come as the firm, which has its headquarters in Durham and sites in Newcastle and North Yorkshire, reported a 6.5% jump in turnover to £70.7m for the 12 months ended March 2019, and a 7.3% rise in operating profit to £3m.

Cash at bank also improved from £3.6m to £4.2m, with directors citing consistent performance across all companies and operating divisions for the rise.

Looking ahead, the group has been granted planning permission for the construction of a new £1.8m workshop and garage facility at its Newburn premises, with construction due to start in January. It has also continued to expand its plant and haulage fleet investing £3.2m in the past 18 months.

The directors also state in their strategic report that they are continuously looking at potential opportunities to expand and further diversify the business. As a result, when approached by an experienced offshore wind market specialist with a business plan, MGL Cable Services was formed.

MGL Cable Services focuses on cable related High Voltage Electrical Engineering activities to the offshore wind market and since February 2019, after securing the required accreditations, MGL Cable Services has been involved in seven different offshore wind farm projects located in the UK, Belgium, The Netherlands and Germany, totalling in excess of £2m.

At the beginning of the year, MGL Group began the process of making appointments in three key senior roles and successfully completed this process in July 2019.

Keeping a flow of young recruits into the business – which employed an average of 382 people in the financial year but now has more than 400 employees – continues to be a challenge, however.

In a report within the accounts, chief executive Gary Smith said: “Inability to recruit and retain the best management and staff in the correct disciplines to maintain our high standards is an ongoing challenge.

“In order to address retention issues the group continually monitor its remuneration arrangements to ensure it remains competitive in each market sector.

“The group has also recognised the need to encourage more youth into the industry and have operated apprenticeship schemes across numerous disciplines for a number of years and presently employ in excess of 30 people who have either completed or are on an apprenticeship scheme.

“We are a member of the Apprentices 5% Club Charter and are presently trying to recruit eight apprentices across six disciplines.”

The firm said Tynedale Roadstone, MGL Group’s coated roadstone production company, continues to invest in the research and development of single use plastics and other waste stream materials as a replacement for virgin aggregates in its asphalt materials.

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